Time-intensive pricing

[Former_Member]

I recently read an older thread about pricing time-intensive items. It provided a nice, easy formula for figuring prices, but the results seem a little unrealistic for my products. I do a lot of embroidery and it takes awhile. I made an embroidered felt book this summer that took approx. 36 hours, which drives the price of a simple felt kid's book to almost $400!

I'm starting a pretty new shop and I'm currently working on making and pricing my new products and I wanted to see if anyone else struggles with time-intensive pricing. I'm just about finished with the embroidery on a pillow that will probably have about 12-15 hours of work in it. So I guess my debate with myself is this: do I price things a little higher and risk losing customers or pay myself a little less and charge less?

I hope that rather rambling question made some kind of sense. I'm really excited to be a part of this group of awesome creators!

~Alie

[SylphsDesign]

I'll be very interested in hearing what kind of answers people have, as I struggle with the same issue.
All my bags have designs that are drawn, and then cut out completely by hand, and then free motion embroidered. not the 15-20 hours that you have but depending on the design up to 8 hours on just the design alone.

[Former_Member]

I would try to find an in-between. Your time is valuable, and you deserve to get paid for it. On the other hand, you won't get paid if the items don't sell. It seems like a middle-of-the-road price might be a good idea.

[Former_Member]

I'm not sure if mine was th article you read before or not, but here is the link just in case: http://honeysquilling.wordpress.com/2011/07/22/pricing-for-time-intensive-handcrafted-items/

I'd suggest that you start with the basic wholesale price formula :

[(time x $per hour) + 2(cost of materials)] x 1.1 = wholesale price

And see what that price is for you. Make sure you are happy enough with the $per hour you are paying yourself. Then from this price if you think you can raise it a bit, do so. If you think it is still too much you can fiddle a bit more, maybe reduce your $per hour, or only charge 1.5 times the supply coat instead of 2 times, etc. But make sure you are not cheating yourself! It's definitely hard to do pricing!

[Former_Member]

Yah i struggle with that everytime.

[Former_Member]

That is the article I saw. It seems like a useful system for some items, but if I use it it gets a simple embroidered pillow to the $150 range. I know I wouldn't be able to spend that much on a pillow! I like the middle of the road advice. I suppose I can raise prices a bit if I start to lose money or something... Oh, money. So troublesome! Thanks guys!

[PrairiePrimitives]

HoneysHive wrote:
I'd suggest that you start with the basic wholesale price formula :
[(time x $per hour) + 2(cost of materials)] x 1.1 = wholesale price

I haven't heard that particular wholesale formula but, at any rate, that's *wholesale* ...

Retail price is traditionally wholesale price x 2.

I don't know what you're willing to take for an hourly wage. Sure, we'd all LOVE to make $20/hour (or more!) for our artistic skills, but oftentimes that's not very realistic when it comes to pricing.

Back in the 80s when I was weaving baskets, I was able to get an hourly wage of about $20/hour. Most of my baskets took about 45 minutes to an hour to weave and were priced around $18 to $22. I had a few popular baskets that took just a bit longer (1.5 hours or so), but they sold quickly at $35! Those were the days! (and yes, I still think about going back to basketry now and then ... LOL!)

[Former_Member]

I think one aspect to consider is whether or not you're attempting to make a living off your shop. If you are, you absolutely must price for your time. Another thing to consider is if there are areas in your shop where you could make up the difference. I think this is what PrairiePrimitives is getting at. There are some items in my shop where my hourly "wage" is high, based on what the market will hold. There are others that take me way longer than the price reflects. So you'll want to be sure you include items that don't require a huge investment of time and money, but that you will give you a high return. That will help balance out the really time-intensive (and often more fun!) pieces.

[Former_Member]

I have the same problem. when I use the formula I should be charging $300 for an outfit! when other shoppes are only charging $60 for a similar thing. The formula does not work for me and I don't give myself much of an hourly wage to get that $$$ price tag. I hate the pricing side of things, Lol.

[Former_Member]

at some point i just need to charge for my time and let customers know in the listing just how much time it takes and thats why the price is the way it is.

http://www.etsy.com/listing/76555552/large-blanket-crochet-contrast-border

this item takes about 75 hours give or take 5 hours, and then materials are in the low 3 figures. so thats the final price. BUT i made one for myself and it is simply amazing and well worth price.

i try to explain the time and materials in the descriptions so that customers understand the value. i have had anyone buy one, but i also havent had anyone tell me its overpriced or a rip off either so i *THINK* that means that i did a good job explaining the price and value.

[Former_Member]

Hi psychobabblecrafts!!

This is a very very interesting question that you have raised. I myself wonder how should I price myself for my artwork... Cos it is only you yourself who knows that time and effort you have put in.

I would rather prefer not to under-value the art by reducing the prices and paying yourself less. I am sure there are people out there interested in your work.. Its just a matter of reaching the right market! :)

But again the way you say, $400 for a kid's book is a bit too pricy... Maybe you would want to review the designing of the book.. And come up with an idea that needs less effort for just a kid's book! That way you will be able to reduce your prices and at the same time not feel under-priced!

Hope this helps! :)

[Former_Member]

Hi HoneysHive!

Found your suggestion indeed helpful!

Am gonna try pricing my paintings using that formula!

Thanks!

[KriyaDesign]

When I first opened the store in March, I priced the items according to the time, hourly labor, material... to wholesale then multiplied by 2 to get to retail. Needless to say nothing move in my stores for 3 months. Then I phased out all the time consuming items and went with the simple ones I am offering in the store right now.

However, I am planning to sell the more time-intensive items too. Those that need more wrapping and gluing. Which means I have to go higher than $20 (about the highest price point in my store now). And I love sterling silver jewelry and would love to offer it into my store. The initial investments will be higher for precious metals and the prices, of course, have to reflect the higher costs. I feel excited thinking about it and curious all the same. Could I move it as fast as the lower cost, plated metal jewelry! I also plan to do my own patina/oxidization, so I could control the hues and what goes. Patina seems quite a time consuming venture. I am just getting a hang of selling on Etsy, so I'll wait a bit more. My life and business partner said, the more one waits the more you lose sight of the (brilliant :-)) ideas. *sighing*

So I am quite curious to know how others are pricing their works that are more time- labor- cost- intensives. I remember my mom taught me to crochet and it took more quite forever (in a 10-year old mind) to finish a little hat. It makes me giggle when I imagine every time you sit down to work your crafts, you set the clock to time yourself. I do that when I make jewelry lol... seriously. I am just curious!

Thanks all for the great tips!

[Former_Member]

Kriya:
Crochet's actually pretty fast, at least compared to knitting. It just uses more materials, so that's a tradeoff.

I just listed a scarf last night for $55. It's a lot for a scarf, but the yarn was nearly $20 (it's hand-dyed, and I do mention that in the listing) and since it was worsted weight (not super bulky :P) the actual knitting time was about a foot an hour. That's about $8/hr, which is still above minimum wage, but just barely. We'll see if it sells!

I price yarncraft at about materials + hours*10. Calligraphy comes out much closer to $20/hr.

[Former_Member]

I'm so glad you created a thread on this. I face the same problem with my mini albums.

Right now my items are priced at 2x the materials and nothing for labor. Like you said, if I take into account all the time to purchase materials, plan out the project, complete the project, take pictures, list and ship it - well then one of my albums would be 3-4x what I have them priced for. All would be overpriced. A few things I'm working on to solve this problem are:

#1 Obtain more materials at wholesale prices
#2 Create 4 or 5 at the same time, so I can combine steps and maybe move though them a little more quickly
#3 Try to find a standard for each one so that the planning part is shorter or no longer needed

Other than that - I'm a little lost on how I can still create a perfect product and actually pay myself a salary.

[Former_Member]

Thanks so much everyone! I read your responses right before bed last night and then had one of those nights where you keep having to turn the light on and write down a bunch of ideas. I have a lot more non-embroidery designs planned today. Thank you, thank you! I love the Etsy community!

[Former_Member]

I hope you can find a formula that works for you! Feel free to fiddle with my basic formula as well, change numbers until you get something that you are happy to work with, I'm sure it'll change for me again someday as well! Currently I pay myself $10 an hour, but hoping that someday when business picks up I can increase that.

Someone mentioned wholesale vs. retail. My thought is that if you want to market your items to try and get wholesale accounts, then yes, you have to charge retail prices. But if you are just making some pocket money and having fun, I see no harm in charging wholesale prices on etsy. But if you do so, remember to add a little bit extra in the price to account for etsy and PayPal fees.

[Former_Member]

I have the same issue. I make greeting cards which are probably way less time intensive than a knit scarf. But still, I can spend 2 hours on a quilled card and $1-$2 on materials (cardstock, envelope, quilling paper, rhinestones). If I paid myself $2(2 hours) + $2materials that's $6 just for my wholesale price! If I double that as suggested by some formulas that would be $12 for a stinkin' birthday card!

I agree with the notion that we should price fairly for both buyers and ourselves, but sometimes it's so difficult to do that. I'm sure a lot of us are perfectionists who spend forever on our crafts, but it'll be pretty hard to get someone to dish out $10 for a birthday card that will most likely get lost in a pile of torn wrapping paper and spent candles.

[ArtEllen]

I really like Kouture Crochet's idea of explaining the time, effort, and cost of materials in the item description. I think that would make me feel more comfortable buying a higher priced, but better quality item.

[Former_Member]

{[(time x $per hour) + 2(cost of materials)] x 1.1 = wholesale price

OK, so lets say i charge $8/hr and most of my stuff takes 1 1/2 hours. that's $12 in labor plus $3 in materials.... thats $15 at a minimum per item. Hmmm... I am charging half that for barrettes and a few dollars less for headbands. However my charms are a third that price. :)
For me it was looking at other shops to get a feel for what the market can bear right now. I also spent time window shopping at craft fairs for items sim to mine. I am a tad pricier than fairs but typical equal or a bit less than sim items on Etsy.
Getting the right price is a tricky thing. :( I haven't sold a ton online but have had some sales in person. No complaints so far on price and my friends aren't screaming at me that I am too cheap either.

So, guess i am saying, check your market and do what you feel works for you. :)

[amusebeads]

Thank you for posting this question, and thank you to everyone who gave advice. My work has recently been tending towards more complex, time intensive pieces. At 25+ hours for some pieces, I don't feel like I can price them and have them sell. At this point, I think they will be more "attention-getters" for my shop, and I might enter them into contests or galleries. But I do wonder if the average consumer knows/ understands the difference in time invested in different types of arts/ crafts.