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Pricing advice for time consuming projects


#1

I could really use some advice regarding pricing. My problem is that
I work a lot with chainmaille (particularly micromaille) which is
not only material intensive, but very, very time consuming. It’s not
uncommon for me to take 15-25 hours on a project (about 1/2 to 2/3
of that time is just coiling and cutting rings). I have one piece,
(fortunately I made this one just for the fun and the challenge)
that took me at least 100 ft of copper wire and easily 100 hours or
more.

Sometimes, my family thinks that, since I don’t yet have a business,
that I shouldn’t charge much for my time because they see this as
currently being more of a hobby. But if I don’t start charging for
my time now then it’s going to be really difficult to charge for it
later, and since I am wanting to do this as a business charging only
for materials isn’t going to be enough to get me out of the hobby
level.

I’ve seen the normal pricing formulas regarding wholesaling and
retailing, but sometimes with highly time intensive pieces I’m just
not sure about the numbers they give me. On top of this, I’m in
Michigan and our economy here is really bad so selling anything, at
just about any price, is difficult (at least it has been for me) let
alone trying to sell a high priced piece.

Any advice you can give me regarding pricing and pricing time
intensive pieces would be really appreciated. Thank you!

Laura Hepworth


#2

Hi Laura,

If you can’t put an item on the market at a fair price then you have
no business attempting to manufacture that item.

You need to be at least be able to make a profit on minimum wage
labor plus materials.

Since you’re working for yourself, let’s assume you’re filing form
SE. The average minimum wage in this country is $7 per hour. You made
all of this wonderful copper chainmaille, and it took you 100 hours
to do. So the item is $700 if you were to charge labor alone for that
item, and the price of the copper is insignificant in comparison. You
then need to double the total for federal and state taxes, plus
social security and medicare. So your item’s fair price is $1400.

Reality check: NOBODY will buy even a full suit of COPPER chainmaille
at $1400.

You then have three choices:

  1. Eliminate your inefficiencies that are causing you to spend as
    much time as you are on your product.

Suggestion: Invest in a jump ringer machine. It costs about $200.
With it, you could cut your manufacture time in half to 50 hours,
reducing the fair price to $700.

That still might be too much, given that your competition is probably
making the stuff from a third world country.

  1. Consider a more upscale version of the item which justifies the
    amount of labor put into it.

An obvious choice would be sterling silver. You could reasonably
expect to sell an entire mail shirt of sterling rings for $700, using
above jump ringer to help you stay efficient in hours.

A unique choice would be 10K gold: hard enough to be durable,
certainly valuable to make the cost of labor less significant
compared to the materials. A 10K mail glove would certainly sell for
the cost of materials plus labor, then doubled to pay the taxes with.
Add gem donuts in place of some links and you’ll certainly have a
unique item.

  1. Abandon your product in favor of manufacturing something else
    which will be worth your tiime.

Andrew Jonathan Fine


#3
Sometimes, my family thinks that, since I don't yet have a
business, that I shouldn't charge much for my time because they see
this as currently being more of a hobby. 

You are right. Your family is wrong. And when you underprice, it
hurts others in the trade as well.

Elaine
http://www.CreativeTextureTools.com


#4

Hi Laura

Your paragraph says it all

Sometimes, my family thinks that, since I don't yet have a
business, that I shouldn't charge much for my time because they see
this as currently being more of a hobby. But if I don't start
charging for my time now then it's going to be really difficult to
charge for it later, and since I am wanting to do this as a
business charging only for materials isn't going to be enough to
get me out of the hobby level.

You are right. Tell your family to support you in the style of which
you’d like, or…

tell them you’ll pay them HALF of what you charge for labor for
working for you. That’ll get’m.

First off. too darn long, You’re too slow or you need to make this a
better assembly line.

How to price your work:

Figure you hired someone and you pay them $10 an hour. this
important. Not YOU, them.

As an employee there are TWO costs to add to the 410

  1. The matching fica/medcare and vacation you’ll pay in addition to
    their wage. Add an extra 10%

  2. So they cost you $11.

  3. No one works a straight 8 hour say. Talking on phone, going to
    bathroom, talking to you, scratching their behind. They only work 5.5
    hours. So you have to add 25% to whatever time they worked for the
    day.

So here ya go

Cost per hour $11 Time to do it (you said) 100 hours. Add 25% because
you are PAYING them to work 125 hours.

125 hours x $11 hours, your cost to have someone make it = $1375.00.

YOUR COST baby!

Minimum markup (minimum!!!) is 50%.

Labor sells for $2062.

I have no clue on copper but if copper cost $50, you should double
or triple it. Triple = $150

Selling price $2062 +$150

total selling price = $2212.00

if you can’t sell it for that, go find another job. if you say "I
can’t sell it for that, it can only sell for $700.

That’s still a lot of money, to your family, but…

Lets do this, subtract just the cost of copper from $700

$700 -$50

= $650 for labor.

You can’t discount the hours, your mouth to God’s ear was 100 hours

$610 divided by 100 = $6.50 an hour

You’d be doing this for $6.50 an hour.

Minimum wage is $7.25.

Sheesh

New subject, same line.

I am helping a moth/daughter team with QuickBooks. They started
making fun costume jewelry like many of you do. cheap beads, cheap
wire. They make necklaces and earrings, bracelets.

They know nothing of jewelry, but it sells, they go to shows.
SOMEBODY told them a while back

  1. Sell your contract labor people’s hourly rate who assemble this
    stuff at $100 an hour (they pay the help $12 an hour.

  2. if the daughter makes it, charge $150 an hour.

  3. Markup all material, no matter what 9 times!

They do

I met them and told them they are so novice, they are few and far
between that markup like that. I wasn’t telling them to change, just
telling them most people markup 2, 3 5 times and would triple their
labor costs.

they don’t know any different.

this past weekend at a fare in Fla in just 3 hours they sold $19,000
of this fake jewelry at these prices.

No one told them what the jewelry industry sues so they just did
what they were told.

if they were told year ago to mark up stuff at 3 times rather than 9
times and labor would be $50 an hour, the $19,000 weekend would have
been a $7000 weekend.

:slight_smile:

David Geller


#5

Laura - I’m afraid this is a bit harsh, but you asked.

IMHO, you can’t make even minimum wage working copper maile,
especially micromaile.

If you want to even think of making a business, buy your rings
already cut, saw cut that is. That eliminates the time cutting and
cleaning up the rings. To do it yourself, you need a jump ring
cutter and multiple tumblers. That gets rid of the burr and polishes
them before assembly. If you can afford tumblers - about $250 to 350,
and you want to do chain maile, cut your own.

If you want to make a business of making jewelry, that is a different
question. Below is the link for an article I wrote for Orchid Feb 12,
2006 on pricing jewelry. Having reviewed it, it gives you a place to
start for pricing. You have to figure out what the market will bear.
If it won’t support what you would have to charge, either make
something different or change how you make chain maile. Silver maile
might be feasible… but that is your deal to figure out. Do update
the precious metal pricing to todays prices.

Tutorial on Pricing Jewelry for wholesale
https://orchid.ganoksin.com/t/tutorial-on-pricing-jewelry-for-wholesale

Judy Hoch


#6
You are right. Your family is wrong. And when you underprice, it
hurts others in the trade as well. 

Totally correct. Your time and expenses. Everything gets an honest
pricing. If I give a discount to friends or even an outright gift
they get full disclosure. Can’t quite have them telling the
neighbours about the deal they got from their jeweller and expecting
the same.

If I chose to gift something it is out of my pocket period.

Selling and claiming to not run a business, even with no formal
license papers will sooner than later attract the unwanted attention
of the nasty tax folks. They will find you without question. Plus you
can write off more expenses than imagined even with minimal books.
Christmas in april in the US :slight_smile:

jeffD
Demand Designs
Analog/Digital Modelling & Goldsmithing
http://www.gmavt.net/~jdemand


#7
If you want to make a business of making jewelry, that is a
different question. 

I read Judy’s little thing about pricing work. It’s good enough of a
strategy for most, I’d say.

Just a couple of thoughts, from me. Chain mail is a niche market,
and not a large one at that. I personally don’t care for it,
speaking as a consumer, not a jeweler. It’s a niche market…

It’s also what I, as a jeweler, call “knitting”. Hundreds if not
thousands of repetitious actions, usually not very skilled. Pretty
much anybody can knit with a little practice, not that I do it. The
point being that the public knows this, too.

That brings up two things, really. Since the basic process is simple
and easy - stringing jump rings together - you need to concentrate on
WHAT you are “knitting”. You can make chain bracelets and sell them
all day long for a decent price, anyway. Just like sweaters, there
are bad ones, good ones and great ones, but the process of making
them is unchanged -they are all knit.

Sorry, but IMO you’d have to be nuts to put 100 hours into anything
made out of copper, unless it’s the Eiffel Tower. Why not spend 3
hours making a bracelet you can sell for $50? It’s a common mistake
to rush out and want to conquer the world in a day, when really you
do it successfully step by painful step. Just some thoughts,
anyway…


#8

Thank you all for your responses.

I don’t work just in copper. I also work a great deal with sterling
silver with the occasional piece in 14kt gold-filled. However, the
vast majority of the pieces I have sold have been in copper.

Elaine, I know that underpricing can hurt others. That is why I’m
trying to be careful not to do so, but I’m also trying to be careful
of overpricing as well.

David, thank you for your comment. Not all of my pieces take as long
as the the ones mentioned in my original post. There are a number
that only take a half hour to an hour to make. However, the more
complex the weave and design used, the longer it takes and there are
just some weaves that are infamous for taking a long time
(Dragonscale being one of them) and these are the pieces I’m having
difficulty pricing. Also, I said “sometimes” my family thinks that
perhaps I shouldn’t charge much (I didn’t say not at all) for my
time. They do support me in my work, they’re just wondering if
charging less for my time might result in more frequent sales.
However, I think the main problem (and they agree) is that I need to
choose better shows.

Jeff, in the state I live in we are allowed up to $4,000 in hobby
income before we have to pay income tax on it. Right now, I’m not
even making 1/4 of that.

Laura


#9

Laura,

in the state I live in we are allowed up to $4,000 in hobby income
before we have to pay income tax on it. Right now, I'm not even
making 1/4 of that. 

When I had a real job too even ‘hobby’ expenses were written off
against that paycheque. Very handy although I did pay my accountant
an indecent amount of money for his craft. When I couldn’t afford him
I did it by myself. Over the decades the tax man has only nailed me a
couple of times. Cut them a cheque and they go away, no jail time nor
penalties, maybe just a little interest.

A very small fish in a big ocean as long you are not perceived as
attempting fraud.

jeffD
Demand Designs
Analog/Digital Modelling & Goldsmithing
http://www.gmavt.net/~jdemand


#10

Yes, as a business, you need to charge a fair price for your time
and that means if one piece takes 10 times more time than the other,
then the labor charge should be 10 times larger. There are a few
ways of dealing with this fact:

  • Design with the labor cost in mind. In other words, you might find
    that moving to a business from a hobby will mean moving away from
    chainmaille because it is so labor intensive.

  • Change your manufacturing process. Find a way to make chainmaille
    quicker.

  • Make your chainmaille in gold. You may find that selling gold
    chain maille is easier even though the price may be 5 or 10 times as
    high. Then your high cost of labor is covered in the higher
    perceived value of the gold.


#11

Laura,

NEVER underprice your time and overhead- it is a static cost.If your
work is of a high quality and you offer it to the right market it
will sell. Do not overlook ways to reach all your potential markets
(barring ebay which I believe is a dying market as far as
niche/handmade 'jewelry sales go- what you are creating does not
sound like jewelry to me, but chainmaille which appeals to an
entirely different market).

You must ask yourself “What experience does [your] family have in
jewelry, its sales or costs and pricing items that are subjugated by
a volatile metals market? ( save for copper).Though supportive their
advice is essentially not in your best interest in fact unless they
do have experience in some aspect of the industry or a marketing
background. If you have advertised on say reenactment sites, or at
fairs and have taken reasonably good photographs of all of your
original work and offer pieces by commission and have considered a
website/e-commerce to reach your widest audiences both domestic and
foreign and price your work according to profitability first and
competitive to others offering the same things within the context of
a volatile metals market ( price according to the highest potential
materials cost you have paid and do not ever lower a price unless it
is a specific and event associated promotion limited in time) and
still sales are not where you expect them to be given your targets or
projected sales in accordance to your business plan, you should
perhaps consider alternative sales venues and a primer in sales on
the web. Some good sources of are “internet retailer” and
"website” magazines.You may qualify for free business related
subscriptions depending on your business structure and organization.

If you are serious about continuing this as a livelihood you may want
to consider a micro-enterprise course.They usually result in creating
a business plan and some type of financial support options and/or
offers upon completion. If this is a hobby and will remain so there
are other more appropriate non-business related forums you may want
to visit like about.com which is more geared to hobbyists that have
no intention to make a lifetime career out of their craft rather
individuals just want to make a return on something they like to do
as a sideline to their day job!.If you have any questions I will be
happy to answer them off list…rer


#12

Laura,

I to make chainmaille but I’ve found that at shows, it doesn’t sell
nearly as well as my other beaded works or fabricated pieces. So, I
now do only small chainmaille items. Earrings, mostly and
occasionally bracelets and micromaille rings. However, if making
your piece, even in Dragonscale weave, is taking you 100 hours, then
you shouldn’t even consider making it in anything other than a
precious metal. Now one is going to pay $700 for copper. No matter
how many hours you put into it, but… if you used argentium silver,
in 26 gauge, 1 or 2 mm jump rings (I’m lousy when it comes to aspect
ratio), you might be able to get away with charging that much…
if you also solder your ends closed.

Sorry, but Chainmaille just don’t pay unless you can do it fast. I
make more money teaching it than selling.

Michele


#13

Michelle, thank you for your response.

The piece that took 100 hours was a piece I made as an entry for a
contest on one of the chainmaille communities I frequent and was not
made as an item to sell, but as a personal challenge.

The pieces that I make and sell do not typically take that long,
however there are many that take 20-35 hours to make, Dragonscale
being one of them.

I do make a point to try and have a balance between the time
consuming pieces and pieces that take very little time. However, I
don’t want to be stuck only making small pieces that don’t take much
time and are boring to make (there are only so many Byzantine
bracelets a person can stand making no matter how much they may like
that weave); also, simple chainmailleis common/normal chainmaille
and common/normal doesn’t sell well for me.

I enjoy making the more complex and unusual weaves (and these are
what get the most notice), but they do take longer and I’m trying to
be careful not to under price them. However, I don’t want to over
price them either.

Laura Hepworth


#14

Hi Laura,

It depends on who wants the finished product and how much they want
your product. Not many customers vant a chain mail vest, but many
customers want a chain mail bracelet or necklace.

The vest is made in steel for body armour. Body armour is not for
decoration unless it’s displayed for what it is…an example of pure
function.

A chain mail bracelet or necklace is best made in silver or gold as
a jewellery item. It’s function is to please the eye while being
comfortable for the wearer.

Regards, Alastair