Saturday, January 01, 2005

The hornet's nest: pricing fine crafts

Lately, I've been perusing the site. For those of you who aren't familiar with it - Etsy provides (for a very reasonable fee) a lovely storefront for handmade items. Each craft artist has their own virtual "shop" and a link to show each item in detail, along with the option to pay, mark it as a favorite etc. The quality of work varies a little but is largely very good. It's tasteful, easy to navigate and the Etsy folks charge such reasonable prices per listing and sale that it's almost irresistible.


Until you see the prices. Now, in fairness, there are some knock-you-dead designers who sell at what their work is actually worth. But it seems to me that the majority of sellers are underpricing to the point where you have to wonder if they cover costs. And a further perusal of forum discussion reveals that many people are only recovering their material costs and don't (and I'm quoting here) "charge for my time."

I'm familiar with this point of view. I've been there myself. Back when craft was a hobby, I was thrilled just to fund my addiction and recover enough to buy new materials. I understand the viewpoint.

But here's the thing: It's a similar mindset, I think, to someone not being willing to join a union because, really, they're just working because they like to be busy or they're just working to have a little extra money. They don't actually need the job. This leaves their coworkers (who may love their jobs) a person shy of the power to make the employer understand that their labor is worth anything at all. That they deserve to earn, say, at least minimum wage. Why should the employer (who is the buyer in this story) pay fair remuneration if he/she can get people to work for spare change?

Me? I'm not working for spare change. I can't afford to do that anymore than I can afford to volunteer 25-30 hours a week. I pay to register my business name. I pay to have my taxes done. I pay income tax on what I earn and extra rent to have a studio space. I deal with wholesalers whose minimum order ranges from $150 - $500 U.S. I pay for shipping, supplies,
an Internet domain, business cards, and the extra expense of a business bank account. Just for starters.

But just as important, I spend hours thinking, sketching, trying different ideas. A cuff can take anywhere from 15-40 hours to produce. My designs are original. Imagine, just imagine what we would pay for a pair of handmade shoes that were one-of-a-kind.

What do we pay for shoes, come to think of it? Not the kick arounds we get in the bargain basement - but the juicy ones we fall in love with and just have to have - in spite of the price?
What do we pay to have highlights put in our hair - a job that takes the hairdresser maybe one hour of actual working time? I don't know about you, but I go to a mid range salon and it costs $100. One of my cuffs might be priced at that - and I've labored a day and a half. The hair color will fade in a couple months, the cuff is so well made that it could be passed on to the purchaser's great grandchild.

There's nothing wrong with being a hobbyist and covering your costs. But I wish there was a site similar whose clients were all professional artisans. A juried site. If anyone knows of such a mecca, please tell me!

And! I would love to hear the opinions of other beaders and glass makers. Thanks!


Jodie said...

I agree with you, although I may be one of the people you're talking about! Living in the midwest does put somewhat of a "ceiling" on what I can charge for one of my pieces, or even a set of my beads. But I have been trying to get my prices up to a level where I feel that I have made a small profit and it's still somewhat affordable. It's a fine line, as I'm sure you know.

beadbabe49 said...

I've been on both sides of that line. When I first started doing beadwork, I had a "day job" as a graphic designer and I was thrilled just to sell a piece, nevermind actually charging for my time, which I considered my "spare" time anyway. And, frankly, although my work was nice it was not anywhere in the league of what I can make now.
Now I am a professional artist/craftswoman and I have all the expenses you mentioned, and I charge what my time is worth. I'm not nearly as expensive as someone with a "name", but I charge reasonable prices for my work. Now I happen to be lucky enough to not have to make a "whole" living with my work....I just supplement my husband's pension and the money we make for our parttime jobs (since the pension alone wouldn't support us) but if I charged a lot less for my work I'd be undercutting all the artists who do have to make their living at art and that would be unfair to them.
When I switched to making art fulltime I went to a friend who was making her living at it and we had a long discussion about what to charge for my work. She convinced me that even though I was inclined to price my work lower than I should have, that it would be a real disservice to the other artists who cannot afford to do that.
So that's the line I walk now. I certainly don't sell as much as I would if I underpriced my work, but I'm not cutting my friends' throats either.

Jewels said...

Very well put Linda, you've echoed all of my thoughts and opinions with this editorial. Too many of my friends 'give' their work away. My dearest beading buddy is notorious for losing money on her pieces. (she once sold a necklace that had cost her at least $150 to make PLUS her time, for $100, for fear that anything higher would have been unfair to the buyer...)

I don't know about anyone else, but my time is worth a LOT. I am not about to spend 20 hours on an original, high-quality piece, and then just sell it for the price of the beads. I agree with you about the hobbyists, who's work (or choice of materials)might not equal those of a professional. However, I personally have 26 years of experience behind my work, and am fully confident that it is worth what I charge.

That said, in all fairness, I have seen too many OVER charge for something that looked like my 5 year old could have made it, and I find THAT terribly unfair to the true artists who put so much time and effort into their work.

My husband was very instrumental in my pricing decisions, as I used to undercharge. He got me a digital kitchen timer, and made me keep track of the actual time I put into each piece. Once I realized just how much time was invested in them, it clicked.

I've found many pricing formulas online, but the best one I've come up with for myself was this:
(Hourly wage + cost of mat.)= Wholesale
(H.W. + C.O.M.) + %50 (my overhead) = Retail

I pay myself anywhere between $15-$20 per hour, depending on the level of difficulty to produce the piece. (If it causes a lot of French swear words, then it's definitely $20! LOL!)

The most exorbitant formula I EVER came across was this one:
(H.W. + C.O.M.)x2= Wholesale
(H.W. + C.O.M.)x3= Retail

LOL! This means that my $50 "Lentil Twist" bracelets would be priced at $150!!! For goodness sakes! I mean, I'd love to garner that much money for my pieces, but without the name "Tiffany", or "Chanel" behind it, and the piece is sitting in a gallery in New York City, I doubt someone would be ready to pay that much, regardless of the quality and originality of the design.

That said, me and my $60 have some beading to do ;)
Great writing, great article, and great food for thought...

LJ said...

Thanks for your comments so far, everyone. I'm not responding with much because I have spoken my thoughts and want to leave the topic up for grabs. I've asked Beadweaver to link to this piece and I'm hoping for more responses.

Anonymous said...

The most exorbitant formula I EVER came across was this one:
(H.W. + C.O.M.)x2= Wholesale
(H.W. + C.O.M.)x3= Retail

This does not seem exorbitant to me. If you consider yourself a professional, the wholesale price should cover overhead which is not included in the hourly wage or cost of materials. This would include rent, utilities, equipment, banking and credit card fees, taxes, booth fees (if you do juried craft shows), travel expense (hotel, food, gas or airplane tickets, tips ... ) and so on.

The retail formula above seems low. In the “real“ craft world it is usually double the wholesale as most wholesale buyers want a 50% discount, although many artists do set lower discounts. If you don't wholesale, your price should be minimally, the wholesale price.

So much of selling fine craft involves marketing and education. Marketing involves reaching the people who can afford to buy your work be it through craft shows, galleries, or the internet. The best marketer is YOU. The next best is an enthusiastic and knowledgeable representative to whom you consign or wholesale your work. I don't have any experience with internet selling but all the artists I know who have websites say that their sites do not generate much income. The sites are a way to introduce people to their work and a place to post their show schedules.

Regarding education, this involves explaining the process that went into the making of the artwork, thereby justifying your price. Of course, you don't have to give trade secrets away or answer directly, the oft-asked question “how much time does it take you to make this?” Many an artist has seen a sale slip away as they watched a potential client mentally calculating his/her hourly wage, the client little realizing that the number is not an accurate reflection of what the artist will net on the piece after all expenses are paid.

Equally important to the success of selling your product at the price it is worth is having a product that is unique and it doesn't hurt if it requires a higher degree of technical skill than most people possess. In other words, develop a product that most people do not have the skill to duplicate.

LJ said...

Thank you, anonymous. Folks - I believe we have the opinion of a real pro, here.

Robin said...

Oh, so incredibly well said!!!!! We need to hear and think about this over and over and over again! I especially LOVE the comparison of cuff value vs. highlight value. You're right on! Thank you!

LJ said...

A friend who designs and sells hand knitting patterns likes to use "How much do you pay for a case of beer?"
It's amazing, isn't it - that we'll pay through the nose for something mass produced but hesitate about the worth of something handmade and completely original. Thanks for the comment, Robin.

Rachel said...

Well said. My sisters and I sell our stuff on Etsy at prices that reflect the work that we put in to them. We take our time and do beautiful beadwork and we expect to get paid for it if someone wants it. If I don't sell my jewelry on Etsy I will sell it elsewhere, but I refuse to sell it for less than what it is worth.

I agree that alot of the items on Etsy are priced alot lower than I would price them and the people that price so low are only hurting themselves in the long run. Sometimes when I see prices that seem to low it makes me wonder what is wrong with the piece that I am looking at. Is there a flaw in it or something? You put the time into making the item and you should make sure that getting your moneys worth.

It's like buying a car or an appliance. If it's something that you want to last and work well then you buy the best and you pay for it. On the other hand if you're just looking for the cheapest then that is what you get. Cheap and unreliable.

LJ said...

Absolutely, Rachel. Part of the reason I learned beadwork in the first place was because I kept buying beautiful pieces that broke fairly soon after I purchased them. Good materials are key - but workmanship is paramount.
As to "only hurting themselves" - that's right. It's not hard to make beautiful things and sell them for the material costs and have lots of sales. But after awhile, people who do this (experience speaking)start to feel a little used - as well as spending a lot of precious free time and making no money. I think it's fine, when you're learning, to sell to friends and cover your costs - it helps you fund the learning process. But I think it's a different ballpark when you're selling to the public.
Thanks for commenting.