More Pricing Advice Please

[donwatson]

I have followed Adam's post with interest and with a show coming up in August I thought I would try and put a price on my work.
I have also followed the other posts about presentation and labelling and keeping records of what I make.
I am surprised at what I have found.
I have made up a Spreadsheet for all these different things needed, labels, boxes, etc.
A Slimline Pen & Pencil Set will cost me £14.76 to put on the table for sale.
An Omega Fountain Pen & Rollerball Pen Set will cost £23 to put on the table for sale.
The Slimline is in a cheap looking clear plastic box and I was thinking of asking £25.
The Omega is a closed end set and presented in a Black Velvet box and was going to ask £40.
Are these reasonable expectations ?

 

[donwatson]

An update to the above post, the Omega set is a bit more expensive because I have it in a Maple Double Pen Box, not the Black Velvet Box from Turners Retreat.

 

[Grump]

Seems cheap enuff to me Don. Good to see you talking about and on the table price as opposed to a manufacture price.
So you have worked out the difference?
When I was running my business I bashed my head together with my accountant to arrive a reasonable prices in order to make a healthy profit and survive in business.
He came up with a formula which totally shot me out of the water, I thought it would be far to expensive and price me out of the market but it proved to work every time for the business I was in.
And everytime we suffered a price increase we had no choice but to pass that down the line to the consumer, 17 years later we were still using the same proven formula.
Material cost x 2 + 40% of total per metre X 1.5π diameter.
Walter I think is a retired accountant so may be able to shed some light on how to work a formula for yourself

 

[Penpal]

Provan charges from others have been discussed recently by pen dependant people for a living like the idea of a formula. The number of experts I have spoken to in retirement about how to survive financially all seem to have an iron in the fire, independant advice together with real facts that you have determined should place you ahead of going down the mine.

Good fortune to you mate.

Peter.

 

[donwatson]

Thanks Brian, I will see who turns up with advice.
It was just a thought as I made up a Spreadsheet.
I am in the process of putting my pens etc. on the sheet and will have to include refills, to this end I will need to see what Phil charges and price appropriately.

 

[Grump]

Once again Don, you could visit his site and do your research based upon the retail price after all that is the price your customer will have to pay when you direct them there, so they can't argue that you get them cheaper.

 

[chas_41_uk]

The cheapest I sell a slimline for is £15, so I would sell pen and pencil set for £30
I can get £30 for an Omega so a pair in a box should be at least £60 IMO
But I guess it all depends on what you think they are worth

 

[Walter]

The basic formula I use is materials cost plus labour plus overheads plus profit = wholesale price x 2 = retail

materials = kit and blank and box

labour = how much you value your time at x time taken

overheads = workshop costs + consumables (abrasives, finishes etc.) + marketing (labels etc.)

Profit = up to you, I work on 5%

So if the slimline set costs include labour and profit that would make your retail price £29.56 based on my system which is about what I would charge if selling privately, through the gallery I would add on another 20% for their fees making it £35.47.

 

[Neil]

Don,

I think that you are about spot on in terms of costs. But I would do things slightly differently. Omega Prices, £45 each. The need for a Fountain and Rollerball set is so infrequent that you are tying up your stock and restricting your buyers choice. I have sold sets twice in six years. If you do have pens that are, or could be pairs, then you may wish to add an incentive such as £80 for the pair. However, I think you will be surprised how few, if any pairs you sell. You may sell more pen and pencil sets and I think the sale price is a little undestated, the minimum should be £30.

On the issue of the commercially produced maple boxes, I would happily get the entire worlds stock and crush them, they are ghastly and expensive for what they are.

By way of explanation I'll relate a story of a craft fair I attended several years ago. There was one lady artist there exhibiting some acrylic paintings. Each was beautifully framed , but all hung unsold after three days and the lady was distraught, nobody was buying her goods. I offered her, when she asked, a bit of advice. Take the pictures out of the frames, which she did and next day sold over £400 worth. The frames were putting people off for two reasons, firstly they didnt want to be constrained with the choice of style and colour, it wouldnt have gone with 95% of the decor of the purchasers room, and secondly and more simply, it divided the purchasing decision into two parts, picture and frame. Despite the fact that the frame could be changed, it was an equally emotive decision, somewhat out of balance to the value of the goods but nevertheless another decision that could come in the way of a successful sale. Remove reasons for people not to buy.

Bin the box and get something utilitarian which looks respectable but is quite clearly cheap and not designed to be part of the product offering but part of the packaging, if you want to, offer the box as a separate add on, but dont display the pens in the boxes!

Hope that helps and best of luck.

 

[donwatson]

@ Neil,
Some excellent thinking and just what I need I will need to study this for a while and revise my thinking

@Walter,
Thanks Walter, I vaguely remember a discussion like this, I think on WWI. The only problem I see is my hourly rate. Do I set that @ minimum wage, around £8/hr or say £15/hr.
I have noted both of your replies and will now amend the sheet ( and my thinking ) and will come back when I think I am sorted.

I can see where someone can make 100 pens a week, he will be looking for a good return on his work as I would consider that a full time job. But that would only indicate, roughly, a pen every 30 minutes or so. If I take an hour to make a Slimline Pen it doesn't matter that I may have spent most of that hour sitting in the garden with a cuppa and a choccy biscuit.
I am doing what I like and only selling because everyone I know has a pen or a Pot Pourri that I made. I am looking at a balance here, I don't want to undercut the professional, and I doubt if I could ask for more than £15 for a Slimline Pen, equally I doubt very much if I could get £45 for an Omega (especially as we don't have joined up writing here )

 

[Grump]

Don't put yourself down so much, you can ask what you like for your work, whether you will get it or not is another thing but you won't know until you try.
I live in an area of thugs and thieves here in Chavenage, the only place I would see my pens for sale is in Cash Converters after it has been stolen from my stall.
If I put my pens on a stall at £12.00 it would get bypassed cos they are too cheap they ain't worth the bother and why should anyone pay that sort of money for 1 pen when they can go to Tesco and get 10 for knicker.
If on the other hand I put them out at £120.00 I would have so much interest in my stall I wouldn't be able to control the mob, when to smog clears I would have an empty stall, not sold 1 of em and not seen the going of any.
I don't do people they are arseholes init?

 

[Neil]

@ Neil,
I am looking at a balance here, I don't want to undercut the professional, and I doubt if I could ask for more than £15 for a Slimline Pen, equally I doubt very much if I could get £45 for an Omega (especially as we don't have joined up writing here )

Don,

Sod the professionals, why should you take less money for equally good product? I agree with you on the £15 top end for a slimline unless there are extenuating circumstances such as segmented (if its nicely done as opposed to done for the sake of it!) but on the issue of £45 for an Omega, you can and I do! I exhibit at the SECC in Glasgow, and other venues in Scotland. The reality is that if any of our work appeared in a shop it would command much much higher prices than we charge. So what's the difference? A shop front and an enormous overhead? No - its simply one of modesty, we have to sell the benefits of our products and effectively boasting about our products isn't in our British nature.

With all these pricing modules and the value of time, its a huge Red Herring. Do your cost module, great, you've now got your MUST NOT GO BELOW price. Then go and find five reasonable people and ask them "How much would you expect this to be in a shop?", and see what the answer is. If you've made some good quality stuff and is well packaged the answer will always be more than YOU and your calculator expect!!!!

Its worth what people will pay for it, not what the calculator says they should pay for it, and you should charge them just less than they expect to pay, then everyone is happy.

I know this saying from memory and used to use it frequently when I was challenged by Architects and Designers in London (and Scotland, America, the middle East, Australia etc).

Value,

It's unwise to pay too much, but it's worse to pay too little. When you pay too much, you lose a little money - that's all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot - it can't be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.

People expect to pay for quality.

By charging cheaply what message are you sending out?

Sorry but a hobby horse of mine!

 

[paulm]

I find that the more you charge the more desirable the pens are Don. You've got some good advice from Brian, Neil and Walter. I sell my pens at top end prices and have people collecting them because they're deemed as desirable items. I doubt it would be the case if I sold them cheaply, they would be thrown in the back of the drawer.

 

[Phil Dart]

Neil's point is well made Don, and puts better exactly what I was trying to explain to you on the phone earlier today. Don't lose sight of the fact too that there is plenty of money in Perth, which is where your show is.

 

[Walter]

The only problem I see is my hourly rate. Do I set that @ minimum wage, around £8/hr or say £15/hr.

Don don't worry about it. Your hourly rate is what your time is worth to you. that is all that matters.

If you were doing it for a living then it is important that you set a rate that earns you what you need to make a decent living. As you are not then it doesn't really matter what you set it at.

And don't worry about the professionals, it is up to them to look after themselves. If they can't make a living selling pens because amateurs are undercutting them then that can do what all turners do and diversify into the much more profitable fields of writing books and magazine articles, demonstrating and selling things to other woodturners. Very few woodturners make a living from only turning these days.

Edit: And I also agree with Neil's comments.

 

[Moondoggy]

Listen to the excellent advice here Don and do not undervalue your work. I recently sold my first Omega for £45.
I have a friend who has a business doing block paved drives. A few years ago orders were a bit slow, so he decided to reduce his prices to try and generate more business. It had the reverse effect, business dropped off even more. He put his prices back up and work picked up again. He is not the cheapest around either, people actually like to pay a good price for a quality product.
Don't forget that you have invested a lot of money in equipment to make pens, bowls etc., when that equipment breaks down or wears out because you have been making things for other people, it is you that has to put your hand in your pocket to replace that equipment. You need to charge each of your customers for a little piece of that equipment, as well as the power to run it.

 

[Phil Dart]

Don don't worry about it. Your hourly rate is what your time is worth to you. that is all that matters.

If you were doing it for a living then it is important that you set a rate that earns you what you need to make a decent living. As you are not then it doesn't really matter what you set it at.

And don't worry about the professionals, it is up to them to look after themselves. If they can't make a living selling pens because amateurs are undercutting them then that can do what all turners do and diversify into the much more profitable fields of writing books and magazine articles, demonstrating and selling things to other woodturners. Very few woodturners make a living from only turning these days.

Edit: And I also agree with Neil's comments.

Nooooooo!!! I would suggest an hourly rate of at least £100 Don

 

[Walter]

Nooooooo!!! I would suggest an hourly rate of at least £100 Don

 

[Woody]

I had a so called friend some years ago who made and sold wooden garden ornaments and he ask me to teach him to turn pens which I gladly did anyway I had a show coming up and offered him a spot on my table but in the end he got his own table and ask me if I minded him selling a few pens fine says I so we both turn up on the day and it turns out his stall was directly opposite minee and he swamped his stall with pens in all manner of boxes I set my stall up with my pens on my home made stands with an assortment of other turned items and my pens were a more expensive than his were with a box so at the start he is standing there with a big smile on his ugly mug I sold just short of £800 worth of turnings which included most of my pens he sold about £40 worth of pens in boxes and his smile disappeared its quality that will sell not a bloody box LOL by the way I told him to go away afterwards well words to that effect good init egg in yer face or wot

 

[Dalboy]

Sell for the price of the pen kit plus £1

Cat among the pigeons