Do Your Prices Include Your Hourly Wage?

by Pat Barden
(Chatham, NY)

long on materials and time

Okay - does anyone price their pieces with the hourly wage in mind?

I used to make a piece, take the materials cost, then add a dollar amount which I thought fair that I should get having made it - add them together, that's the piece price.

But then I started thinking, now I need to photo it, describe it, and post it online - that takes me about another hour, with the time it takes to promote at twitter, blog, and facebook.

So I tacked on an additional $10.

But now I have four online venues I use, Etsy not being one anymore, so I cannot just easily upload to the other venues - though of course I copy and paste.

Then I spend hours each day promoting the already made pieces.

Sometimes, man, rather than putting a piece that hasn't sold on sale, based on all the time I've spent trying to sell that piece - sometimes I just want to jack the price up.

Would anyone like to tell me how they determine a piece's price?

This piece pictured (above) is really the only one I have withe hefty price tag on it - based on the materials and time it took to make it. It's almost twice as long as my usual lariats, though it doesn't have a doubled price.

Pat Barden
Pat Barden Jewelry blog
Pat Barden Jewelry on artfire

Comments for
Do Your Prices Include Your Hourly Wage?

Click here to add your own comments

good question
by: Anonymous

I'd like to see how others do it. I think a lot of people aren't paying themselves enough, but then they are competing against other crafters who price cheaply. Ideally, it's not just the cost of supplies, it's the cost of your time buying the supplies, mileage or postage on how you got them. Then it's not just how long it took you to make it from having all the supplies out on your worktable, it was gathering and sorting the supplies too. Then it is your time designing, which would include putting it together, changing your mind, taking it apart, until you got it just right. Then it is your time with the camera, logging the piece into your inventory, doing all your accounting work to be ready for your accountant, etc. etc. If you use a clay oven, a soldering iron, etc., you would need to figure out the electricity that goes into your piece. I think the time it takes to make the piece once you have the design ready, all the supply pieces on your desk, is the quickest/easiest part of things. All the rest of the tasks are mind boggling. I think about that when I see someone sell an item for $5. How can they be fairly pricing their work, including overhead? The overhead price has got to be at least as much as your actual labor price I think.

the designing and changing of the mind
by: pat barden

that--the designing of it, putting it together, and changing your mind--great point. you are right--its isnt just the supplies and having them and having them out--its what to do withem.

Pay yourself as if you worked for someone else
by: Lisa W.

I am soooo tired of seeing disproportionately low prices for work that is time consuming! Assume that at some point in your future, you are going to have to pay someone to help you with your work. You have, happily, a big order to fill and you can't do it alone. How much will you pay them? that is your hourly wage, and you must pay it to yourself. In the future, if you need to hire someone to work for you, your wage to them is the same, and already built into your pricing scheme. This is part of the base cost of your materials.

When I used to do primarily bead jewelry, I would calculate materials cost carefully, multiply by 3 for a low end retail price, and by 6 for a high end price. I would decide the selling price within these parameters.

Now that I solder most of my work, I have a large amount of consumables in each piece that can[t really be calculated (sandpaper - lots!, sanding burs, cutting burs, polishing materials, acetylene, flux, pickle, patinas, cleaning solutions....). I handle that by making sure overhead is covered in my pricing scheme. I add cost of materials (silver, stones, etc), pay myself an hourly wage ($15/hr, I work cheap!) and then multiply by 2 for wholesale and by 4 for retail. This gives me a ball park figure which I adjust for what I believe the market will bear. My wholesale price is the minimum i can charge and have cost of materials and time covered, plus all of the consumables mentioned, plus some profit to grow my business (buying kilns, rolling mills, hydraulic press, etc, has to be paid for by the business). I would not make a huge profit, but would hope to make that up in the quantity that goes with wholesale sales. If I was selling retail, the extra charge added to each piece covers whatever I have to do to present my work in a retail venue: show fees (often $300-600/weekend!), photography for the web, flyers or other print materials, marketing, etc. That's why you can't sell something at just above cost and make a living at it. There are too many hidden costs not accounted for. That also explains why one-of-a-kind pieces are so much more expensive than production work. You are not selling in quantity, not taking photos of one piece to represent 100 or 1000. You have to do it for every piece, and yes, you have to try to get compensation.

That said, my formula needs a lot of adjustment. I never really use the actual time I take to me=ake a new piece in the price. I use the time I think it would take if I were making a lot of them and knew how to do it. One formula I have heard is materials x7. that helps me adjust my prices as well.

how much is my time worth?
by: Barbara

Hah, the eternal question. I've been reading article after article about this for three years. I have things priced from $3 to $300+.

I figure a base $20 an hour for assembly line work. Once I've spent the time fiddling and designing, I'll make 20 or more pairs of earrings, for example, all variations on a theme. After I've made the 20 pairs in one hour or whatever, that's $1 to add to the materials cost of a pair of earrings. While I'm making things, I'll be thinking how I can tweak the earring design and see if I can come up with a bracelet/necklace.

That $20 includes things like $10 per hour for my time, photography, writing price tags and blurbies (I have a blurby file with boilerplate paragraphs I can copy and paste to Etsy), prorated studio costs, gas/postage/fees to buy materials. THEN, after adding up all the fixed costs, I double or triple the price, whatever seems fair, to cover sales tax and sitting on my market table for however long.

I've developed a standard labelling format for my pix, and they are all immediately put into folders in clearly labelled files (set on thumbnail, making them so much easier to find), ruthlessly edited, cropped and resized; out-of-focus pix are deleted immediately.

But it still takes upwards of an hour to post just one or two things on Etsy.

The $20 per hour includes a prorated percentage for the actual design of something, which is the hardest part for me. I'm also developing a sense for what will sell fast at the market, I ask questions about what people are looking for, and I study passersby to see what they're already wearing -- not to make what they already buy, but to make what they will want next (idea from Mario Testino, btw).

In the interests of time, I use store-bought silver plated earwires on my less expensive market line of earrings, which then go on their own carrousel appropriately priced.

If you're just starting out, yes, you will eat a lot of time learning and perfecting skills, but you have to think longer term: if you stick with it, you will find that most things you are making will go together so magically easily, and the time you save there will be covering your prorated design time. For myself, once I can sell only in stores or gallery shops, then I will absolutely raise that $20 fee, plus I won't have the learning curves I have now that are sucking up a lot of that time.

Barbara
www.barbaramacdougall.com
www.etsy.com/shop/artefaccio
www.artefaccio.deviantart.com
www.artefaccio.blogspot.com

My Time is Valuable
by: Patricia C Vener

Absolutely I include my time! In fact I devised a constant which is hourly based and includes my time and my supplies overhead though not supplies that can be added individually. I'm not sure my non-creative business time is included but I'm not selling enough that I can cover that yet.

If I do not value myself and my work who else will?

Pricing
by: JoAnne Green

I triple the cost of materials to cover the costs of shopping, storing, etc. I average the cost of packaging, boxes, bags, tags, etc and charge one set price. I pay myself a low wage of $15/hr.
Add all of it together and then add a markup. I do 20% for direct sales, 30% for online sales.
I then re-evaluate the price with my customer base and adjust as needed to make each piece affordable. In a different market area I would probably raise the markup percentage. But here, in the blackbelt area of Alabama,I sell 2 to 3 pieces at my price where I might have sold only 1.

thankye
by: pat barden

thankye all for responding--ireally appreciated it

pricing
by: Chris @ Natural Reflections

Personally most of my sales are with friends or at local craft fairs. My pricing method is take the price of my materials (less stringing material) - beads, stones, head pins, clasps and double it, then I pay myself $15 per hour which I usually only add one hour. This pricing seems to work for me, I probably am short changing myself a little but in this economy this pricing works for my area of Colorado. GOOD LUCK!

My excel spreadsheet
by: Lisa at Wild Gift Designs

websites hosting mthly cost +
Materials cost +
Packaging cost +
Labour cost /
10% overhead +
Etsy fees (3.5% of sales price + .20c listing)
= Subtotal price
+ Paypal fee (2.9% of sale price + .30c)
= Price Tag

Just an easy calculation I use and let Excel add it all up. I also have a silver calculator to change my actual ounces to troy ounce and determine the silver content if .925 or .999. This gets added into the Materials cost in the calculations above. Replace Etsy with your shop fees or remove them if you have none (your own website for instance). Replace Paypal if you use another form of payment.

Definitely charge for your time. If it was your full time job you'd need to get paid!