Pricing stuff. Always a touchy subject, and one I shy away from if there's any way to do so. But if I'm going to offer beads or anything else for sale, one I and every other seller out there needs to address. Many factors need to be accounted for, plus several I haven't yet discovered. The cost of materials and tools is obvious. Labor is too, but less tangible. Overhead is even less easy to nail down if you work out of your home, and then there's the category I've labeled "other" in my mental ledger.
This is my "studio" taken many months ago. Since then, things have grown by about 500%. Even looking at the amount of glass, mandrels, and tools visible here, there's a fairly high cost for materials and tools. Perhaps I could have picked a less costly medium.
It should be easy to see by this photo that my overhead is pretty low. I don't have to maintain a separate studio and the only utility that rises with my lampworking is the electric bill.
As far as the cost of my labor, I make beads because I love it and have been reluctant to put a price on that. I seldom work for more than 45 minutes at a time because, frankly, I run out of steam quickly and that's about what I can do without getting tired and burning something, like me. When I'm not working I'm photographing, listing, and promoting. These are parts of my labor that I hadn't taken into account. Nor is it fair to discount my time on behalf of others. If I choose to sell myself cheap that's my business, but it affects everyone out there selling similar products. I recently realized that I am not even giving myself minimum wage.
And then there's the "other" category. In my "mental ledger." Maybe if I had a real ledger and sat down and thought about what should really be in it, I'd actually have a chance. What should be in it? Listing fees, office expenses, postage, packaging, and advertising, if I ever decide I'm flush enough to invest in it. Where do batteries for my camera fit in? It's a stupid little expense but one that will bring the whole thing to a screeching halt if I can't supply it. Bead release: I'll be needing more soon and where is that in the budget? I'd want a computer with high-speed internet anyway but if my computer dies I'll need another one, and I can't list items on dial-up. I should get a better camera and take a lesson or two. And, as far as that goes, I would benefit enormously for a few lessons in lampwork.
Take the picture above and do the math. Figuring $7.50/hour minimum wage and $0.50 toward overhead and "other", the cost to produce the earrings above is $6.25. I am asking for $12 in my Etsy shop
for these earrings. So, I am asking less than wholesale if the standard formula is cost of production x 2. Buy my stuff, it's a great bargain!
I need to do a lot of thinking about where I want to go with this.
Carol as far pricing, i have always read that its 2 1/2 times material cost, as far as cost of running a bsiness at home measure your work area and then the square foot of total living space take the percentage of what is used as business and that is the perentage you take from rent and utilities and apply as cost of doing business on taxes etc.. I have some books that might be helpful if you wish to borrow them... focusing of crafts as a business...
ReplyDeleteThanks! I am certain I had some of it wrong. I would be interested in reading up on crafts as a business, and if you could email me some titles and authors you find helpful I can see if the library has any. I've had bad luck in the past with people not returning books I've lent and would rather not accept your kind offer so I don't become one of them. You are the best!
ReplyDeleteNo you can borrow them no problem, In fact I still have one of yours, upholstery....
ReplyDeleteHi, Carol! That one you can hang onto. Reupholstering my old sofa would be like gift wrapping a flat tire. I'll talk to you during the week. Thanks for reading my blog!
ReplyDeleteYou should absolutely be paying yourself more than minimum wage. Let's think about how much more skill lampworking takes and how much more productive it is than, say, making coffee for people at a Starbucks.
ReplyDeleteMy formula isn't fancy, and I don't think I charge enough either, but I stare at the beads and imagine what I'd be willing to pay for them, then because I'm cheap, I pad that a little and then go think about something more pleasant :)
If those were my earrings, I would have priced them at around $19-$21.
Thanks, Melanie! To price these, I looked at what others on etsy were charging for similar products. It's a tough market and we're all selling ourselves short to sell. Of course, it could just as easily not sell for $20 as $12...I have no idea how people who make jewelry with other people's beads make a profit.
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