How should work be priced?

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How should work be priced?

Postby ToneWood » Mon Jul 23, 2012 7:23 pm

[Wasn't sure which area to post this in - feel free to move it if appropriate]

How should one price one's work?

I was going to title this "How do you price your work?" but that seemed a bit too personal/business-sensitive - so, more generally, how should it be done?
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Re: How should work be priced?

Postby mstibs » Mon Jul 23, 2012 8:07 pm

I count:
Material price
+Wearout of tools
+Other costs (rent, ...)
+Work time price
=Target price

Then I compare
Target price <> what would I pay myself for such an item <> other market factors (exclusiveness, target audience and their income, ...)

Then I have a target price #2 which I again compare
Target price #2 <> How do I feel about the price? (Can I live in peace with the fact I demand this money from the client?)

Then I have a final price.

Aaaah, the "edit" button is back ... Thanx board admins! makes my non-native life easier ;-)
Saxons. Were good wood-turners, they had to be because they were poor potters...from "A Short History of Woodturning with the Pole-lathe" by Brian G. Howarth; My bilingual (de/en) Blog: http://mstibs.wordpress.com
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Re: How should work be priced?

Postby gavin » Mon Jul 23, 2012 10:17 pm

I charge on the basis of
    1. What will people pay?
    2. Is that price less than the cost that pleases you to make it?
If so, don't make it.
Often you'll find that people will pay a lot for gimmicks e.g. pencils, whistles, helicopters. My hourly rate for these items is far better than for chairs or more expensive items.

I do not bother at all asking myself "What would I be happy to pay for this item?" I cannot be both buyer and seller. The prospective customers will give me far more accurate price-sensitivity information.

I know you could consider depreciation, rent, materials cost etc to make sure you are not losing money. But that level of cost accounting is not worth bothering with in my opinion. If you are not making at least ten times your cost of raw materials, I submit you are doing something very wrong as a greenwood working business man or woman.
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Re: How should work be priced?

Postby Darren » Tue Jul 24, 2012 8:29 am

I usually go by a hourly rate plus costs. Some things i can get away with charging more for, some less.
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Re: How should work be priced?

Postby woodness sake » Thu Oct 18, 2012 7:15 pm

I usually make something and do a time study (tuition piece). Then, I estimate what it would take if I get good at making it. If I can efficiently produce the item, then I apply an hourly rate that covers my expences directly involved in production, nothing for setting up "shop" when I go to demonstrate/sell at events.
The hourly rate for one object may be higher or lower as it should reflect the amount of skill necessary to the task at hand, as though I were paying my self or an apprentice to do the work.
All this takes into consideration the folks who are my customers. While most people who appreciate the work I do, most cannot afford what I make if I charge a premium price. I'm not interested in going broke, but I would like as many as are interested in owning one of my pieces to be able to take something home with them. Toward this, I offer a wide range of things pricewise.
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Re: How should work be priced?

Postby ToneWood » Sat Oct 20, 2012 7:05 pm

woodness sake wrote:...All this takes into consideration the folks who are my customers. While most people who appreciate the work I do, most cannot afford what I make if I charge a premium price. I'm not interested in going broke, but I would like as many as are interested in owning one of my pieces to be able to take something home with them. Toward this, I offer a wide range of things pricewise.
Well put. I am having some difficulty assessing how to pitch things. In this area, like many others, there are a complete spectrum of incomes. A few of the wealthiest people in the world own property in the area (although you rarely see them around) but there are far more people just getting by, or worse. And there are those at various points in between. While it would be nice to think the wealthiest would see, like & purchase my bowls, it doesn't seem v. likely. So I'm wondering if offering a range of sizes and prices might be a way to include as many regular folk as possible while allowing the deeper pocketed to "express their wealth".
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