So a dear friend of mine Jess, and the amazing talent behind RosyRevolver urged us all over at the Handmade Division Team to blog about the importance of properly pricing one's work. Since I feel this is one of the most essential things any business owner needs to learn, I thought I would blog my thoughts on it.
These thoughts are from the metalsmith or jewellers perspective, but could really be interpreted into many different arts.
Underpricing and how it hurts us all :
When you sell in a community environment such as etsy.com you become a single player in a game of chess. Underpricing your work is a move that effects all the other players on the board. Undervaluing the materials you use or the time and labour involved can do detriment to not only your sales but to your perceived caliber as an artist. While some customers may see your prices and think "what a steal! I am going to buy that!" others may attribute cheap price = cheap quality.
Now you say, but what about those who thought the price was great and bought from me ?
Well this is where disrupting the whole Chess board comes in. By undervaluing you can end up making other artisans who properly price their work look like they are over charging. Not only could this lose respect for you amongst your peers ( yes these are your peers if you are selling in a community environment!) but you also confuse buyers as to what metalsmithed (especially one of a kind) jewellery is worth.
Working it out :
Each and every piece I create is priced with a formula that I have worked on and tweaked over the years which I feel yields me a fair price both for what I put into the piece and for the buyer as well. I don't just price items a certain price because I can. Many many things are factored into the final price that I honestly believe most buyers have no idea about, and it seems many small business owners haven't thought through either. I honestly do not post this to justify what I charge, rather to educate those who maybe haven't ever really learned about pricing their work.
material cost ( sterling silver and stone - stones that are cut from stone cutters and little bits of art on their own)
consumables used in creating each piece ( think solder, flux, cleaning and polishing compounds, darkening agents, fuel for the torch etc)
my hourly labour ( a one woman business means I do it ALL. The design and creation, the finishing, the packaging and photographing. The marketing and listing descriptions)
overhead ( think rent, water,electricity, internet etc - the things essential to running your own business)
tools and their maintenance
applicable fees -(many buyers may not know it costs money to list each item on etsy.com, plus a % fee they take from us when we do sell the item. Then there is paypal, which takes a % fee as well as if you have a business bank account - don't forget they take fees too! )
Packaging and Shipping - ( think cotton lined boxes, bubble wrap, ribbons and bows, business cards, stickers, bubble mailers, labels and computer ink.
These are the tools I need to create. Every step of these processes allows me to bring forth the best final product I can. I know when I talk to my friends about what goes into my work, they are amazed by all this. Generally, they had no idea how much time, thought, and hidden expense goes into every piece. If I did not work out these costs, and didn't pay myself a proper hourly wage, not only would I not make any profit off my designs, but I might actually end up losing money each time something sold!
Final Investment :
Most importantly, I want buyers to know what they are investing in when they buy a piece of jewellery from me.
They are paying for a piece that has been thought out from beginning to end.
Something I have dreamt up and then executed step by step to get to a final product.
A piece that has been created with meaning and a story behind it and built to last.
Jewellery with heart & soul,
built by me,
with you in mind.
Of course, these are my opinions, and my thoughts on the process. I don't claim to know all, nor am I an expert. I run a small business that is five years old and these are the lessons I have learned. I am thankful to have a mom who used to run her own small clothing line, and I have learned plenty about the costs of running a business from her. thanks mom :-)