Friday, October 19, 2012

You're not charging enough!

After browsing Facebook pages and seeing statements like, "Bracelets starting at just $5," I lost it.  I posted a minor rant on my Facebook page letting people know that this type of underpricing damages the livelihoods of other artists and the craft.

I've been making jewelry full-time for over two years.  Making things is the only thing I want to do.  When I see people undercut their prices, I get a bit furious.  I tend to be a live and let live sort of person, except with things that affect other people.  Undercharging hurts everyone.

If you make chainmaille for fun and think that's a great way of getting extra money for rings to play with, I get that.  But as soon as you start charging sweatshop-made prices on your pieces, you are telling everyone that a) your time and handiwork is not valuable and b) the particular medium you're working is not valuable.

I see this with chainmaille ALL THE TIME.  Chainmaille is the red-headed step-child of the metals world in a lot of ways, and this type of underpricing just perpetuates the idea that chainmaille doesn't deserve the respect of traditional metalsmithing.

As someone who has poured hundreds of hours into making couture chainmaille clothing pieces, I can tell you that this is a load of garbage.  The two require a different type of monomania, but they are both labor-intensive and often tedious.  And not everyone can do it right.

For a time I had a wholesale rep and on three separate occasions she told me to raise my prices.  I'm thankful I did.  If I didn't charge the prices I charge I would be working 60+ hours a week just to have an income under the poverty level after all my business expenses.  Think about that.

If you think the race to the bottom is a good business model, let's look at the current Walmart controversy.  According to recent reports, Walmart employees comprise the largest recipient of food stamps.  So guess what?  You're subsidizing all that cheap crap with your tax dollars; even if you don't shop there, you're paying.

Now that I've gotten that rant off my chest, let me pass along some advice.  I offer up a simple formula for figuring out how much you should charge.  Mind you, there are lots of formulas, this should be seen as a starting point.

(Supplies * 2) + (Hourly wage * (minutes to make piece/60) = wholesale price

Firstly, you need to figure out your hourly wage.  This must be the hardest thing for artisans to do because I see so many pieces with only material costs in mind.  I will save the feminist rant mostly for now, but I see women crafters devaluing their work more often than I see men do it.  Women already only make 77 cents to every dollar a man makes.  Let's try to make things equitable in the craft world, okay?

When determining your hourly wage, keep a few things in mind.  You have to be mindful of how long it takes to make the piece, yes, but there are other incidental things that you also have to be mindful of.  From adding price tags to pieces, to ordering supplies--anything related to creating your piece is something that you should build into the price.  If you don't, all those unpaid minutes add up to A LOT OF UNPAID MONEY.  These are costs you're taking on.  Amateur crafters might not care.  Again, if you do, you're screwing over those whose ability to pay for food is dependent on consumers taking on these costs.  And believe me, you are paying for these costs and more with anything you purchase in a retail store.

You might ask,  "Why is the supply cost doubled?"  Well, this allows for fluctuations in the price of your components (especially for people working in silver or gold right now, yikes) and more importantly, it allows you to reinvest in your business.  If you only add the supply cost once, you've only covered the materials used in the piece.  What if you want to expand your business?  That little bit of extra money will help you make that investment to purchase more supplies.  It's also probably wise to add another 15% on top of this to make sure you've taken care of any incidental costs (like shipping costs of getting supplies from your suppliers).

And yes, all of this is only the wholesale price.  There are lots of artists who only charge wholesale prices in their Etsy and Artfire shops.  Pricing things at wholesale rates will only hurt you.  Say you make really cool things and are approached by a store.  This store will expect to purchase items at at least half of your retail prices.  Stores typically do a markup of 2.2-2.5 on their wholesale prices so that they can make money.  Divide your price by 2.2  Are you comfortable earning only that much on your work?

I see wholesale prices on work at art fairs and that makes no sense considering the overhead.  I charge full retail at shows.  Say I sell $4,000 of jewelry at a show.  Sounds nice, right?  Well, at $2,000 I've covered the cost of making all of the jewelry that sold--time and materials.  From the remaining $2,000 I have to deduct expenses such as booth fee (typically $300-$700), hotel fees ($200-$500), food costs, and my time for setting up the booth and standing around all weekend (at least 20 hours of work to upwards of 40).  In terms of pure profit, I'm only seeing a couple hundred dollars.  And most of that money goes to additional supplies anyway.

I'm running out of steam, so I'll leave you with this final thought.  Lots of artists are scared to charge more because they think that people won't spend the higher price.  I sell more now than I ever did at my cheap prices.  Why?  I've found the people who value handcrafted jewelry.  I don't compete with Lia Sophia or any other mass produced jewelry.  That's not who I am and not what I want to do.

Rant over.  Thanks for reading.

Vanessa Walilko
Handcrafted jewelry
Aluminum chainmaille jewelry



15 comments:

  1. Great blog post!! I'm so glad to read it and I do agree so whole-heartedly!

    Thank you for sharing!!

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  2. A friend who owned a retail boutique schooled me on pricing. I didn't believe her at first, but she insisted that raising my prices would create more of a sense of value to the customer.

    She was right. Once I raised my prices by 50%, sales increased. This doesn't include those customers who are only looking for sale or clearance prices, but it did seem to be a positive thing to do. Who knew?

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  3. (Standing clapping) Bravo!!! I put a sign in my tent this year that says "Life is too short for department store jewelry". Almost instantly the requests for me to discount or offer a "deal" stopped. That sign helped set the stage in my tent that what I do is a skilled craft and people treated me likewise. When I treat myself and my pricing like an artist, I'm also obliged to give the service and presentation that meets that expectation. I think the people who pollute the field with substandard pricing don't "get" that their jewelry is only part of what they contribute to the art.

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  4. Thank you! It ain't rantin' if it's true!

    The thing is, many of the low-priced maille people *are* charging the right price for their pieces. Because if their customers had paid any more, they'd be even angrier when the poorly-closed rings scratched them or snagged their favorite sweater, or just outright fell apart.

    The worst ones for the mid-market accessories business are those who have good craft skills but undercut themselves, to the point of probably losing money on every sale, (sometimes even net of labor!). This is because craft skills and business skills are two different things. You do not automagically get a business if you have an Etsy shop. You just have an Etsy shop.

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  5. This honestly brings a tear to my eye. Pricing is the thing I have the most trouble with above everything else. I try to price myself fairly, without being way above or what below other sellers that make similar things to what I do. I'm planning a whole revamp of my inventory after this craft show season. Out with the old, in with the new, and in with a pricing scale that makes sense. Some of my prices, when compared to other items I have, are much higher or lower than they should be.
    Thank you so much for posting this article, it's definitely an eye opener.

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    Replies
    1. Price your items by the formula-- not by what you think is fair or similar to others in your craft.

      You'll see that you will be doing yourself a huge favor! : >

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  6. Vanessa, this post is awesome and so well-timed! I'm going to add it to my list of Rainy Day Links for today -- it fits in perfectly with two other posts on pricing and will really drive the point home.

    Thanks! <3

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  7. You go gurl! Love this post!! I hear what you're saying, and I totally agree. People don't know how to price their work using a professional formula which totally undercuts the artists who do it for a living. I'm going to link your post to my FB page. Awesome!

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  8. I'd like to add one of my pet peeves -- In terms of competing in the same show with other vendors selling similar items -- If you are selling jewelery or even supplies at a show and you notice someone doing the same -- PLEASE be respectful and try to work WITH them... Don't check out their prices just to drop yours and undercut the other guy -- It's rude and it devalues YOUR OWN work as well as everyone else in the whole show. I have had this happen to me at craft shows and its so frustrating. Wholesale pricing DOES NOT belong in a retail style show... If you ask MORE for your work -- you will be surprised that people will generally respect you more :) end rant :) AND THANK YOUR FOR POSTING THAT!! YOU ROCK!

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  9. So well put.. There's been so many times I had to explain my pricing to people and it drives me mental to see others with such low prices.

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  10. Thank you, thank you, thank you! I really needed to hear this. I would like to add, that there is an extreme difference when selling at a Church Bazaar to selling at an Artisan Show. At a Bazaar, you have a lot of people browsing and show up with pocket change. At an Artisan Show, people are prepared to spend lots of money!

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  11. Thank you so much for this post! I often see other "like" shops with much lower prices and am tempted to lower mine but in all honesty, I work very hard at what I do and am not will to work for free. I will share this post, well done!

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  12. I couldn't agree more! Pricing and the undervaluing of work is something I fight against all the time! I also see other shops with similar products with much lower prices - barely enough to cover materials, let alone time! I create felted knit pieces, and it takes a lot of fiber and time to make one piece! I learned a long time ago that my time was worth something. I think it is a point that most trying to make a living with their art come to eventually. I'm not looking for the walmart customer, and shouldn't price like I am! THANK YOU FOR SHARING SUCH AN EVER TIMELY POST!

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  13. Oh, my goodness! Fabulous information and very timely for me! Thank you, so very much :)

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  14. Wonderful! I see this constantly happening on etsy where people are trying to compete. The thing is much of what is on etsy is poorly made and not worth much, but the quality work suffers because of the low-priced dreck!

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