Let’s talk about an uncomfortable subject- money. No one ever wants to talk about it. Your parents probably told you it was rude. You don’t want to say you are barely keeping afloat because it may mean you are a failure, and you don’t want to share you made big bucks and be taken as a braggart. However, at some point you are going to have to decide how much you think your work is worth, and place a price tag on it if you plan to be a professional artist/craftsman. It’s a lot harder than it sounds.
|"Money 2" by Daniel Borman (CC-by-SA)|
Take this as an example: a vendor says to her customer “I don’t charge for my time, because I think everyone has the right to own something pretty.” At first, this may sound very noble. She is willing to give her time to her craft, and she enjoys seeing happy customers. However, I do not believe she is aware of how harmful her philosophy can be.
Artists and craftspeople need to eat. Some have a second income through another job or a spouse, but others do not. This is a job for them. Albeit they have a very rewarding job they love. I worked in the health insurance industry for close to fifteen years because it provided a paycheck; if they had stopped paying me, nothing in the world would have made me go back. I would scale back how much jewelry I made if it wasn’t my job, but I would still want to continue. My time in the office was valued, and I was paid accordingly. Why would my time have less value because I love my work? If a doctor has an interesting patient whom they enjoy, they don’t charge less.
|"cubibcle" by TheChanel (CC-by-SA)|
Perhaps the vendor in my example doesn’t need money. She needs a way to rid herself of all the product she is making and she has run out of friends to gift. Nonetheless, undervaluing your work hurts other people in your same or similar craft who do charge for their time. Customers grow to expect the lower prices. We aren’t discussing competitive pricing here, where one charges $40, and someone else finds a way to create the same product for $35 and still make a profit. The second person is charging $10 as they haven’t included the costs of labor and tools, etc., in their pricing.
Why should the vendor have to think about anyone but herself, you might ask. If she’s happy, and customers are enjoying her work, the other craftpeople should just find other ways to set themselves apart or “get a real job.” It’s not her problem. Except it is her problem also. The woman in my example has sent a dangerous message to her potential customers. She has told them through her words and her prices she doesn’t value her work or her time. If you don’t value what you do, why should anyone else? She has suggested her work is cheap, which will attract customers looking for a bargain, but not the customers who value the time and effort she has put into each piece. These aren’t repeat customers. Should you at some point want to raise your prices to better reflect the value you put into it, you will most likely lose your customer base.
|"Speed up time 3/366" by Craig Chew-Moulding (CC-by-SA)|
We have discussed why you should value your work, but how do you do it? You need to consider material costs first and foremost. If you paid $10 in supplies, it isn’t good business sense to charge $8 for your product. Factor in the cost of the wear and tear on your tools, and utilities such as water, electricity, and heat, even if you work from your home. If you work in precious metals, you need to consider the current value of your material, as it changes frequently. Small changes may not change your price, but a big spike or drop can have a big impact. In the last eight years, I’ve watched sterling silver bounce from approximately $5 an ounce to approximately $50, and dropped back to under $20. Customers are savvy, and they expect to pay close to the current value, and not what the artisan paid for it; therefore, if you paid $30, and the current value is $5, you can only charge the customer the lower value and you may lose money on the sale. (You know what they say, buy low, sell high!) Finally, you need to consider how long it took you to create the item, and choose an appropriate hourly wage.
When choosing your hourly wage, you need to consider the level of your experience and knowledge. You should pay yourself no less than minimum wage. Before you decide to give yourself no more than minimum wage, consider this: some cashiers at department stores make more than minimum wage. Are your skills more or less specialized than theirs? You may decide anyone can do what you do, and minimum wage is adequate.
You may say you are rather new at your craft and you make a number of errors needing correction, or you are slower and you do not believe the customer should have to pay. An acquaintance made an interesting recommendation to people who were less experienced at his craft. He stated he charges for all of his time when developing a new design, including the time dealing with errors. Then, when he repeats the design, he picks up speed as he becomes more proficient. When he masters the design, he doesn’t lower his price to reflect less time. Now he is charging for his expertise, and he receives a raise. When I worked in an office setting I received raises as I got better at my job too.
|2012 Boston Handmade Somerville Marketplace by Jessica Burko|
Finally, you may say you are interrupted a good deal by situations outside of your work. Perhaps you like to watch television at the same time, and you are aware it slows you down. Maybe you, like me, have a small child who has needs, drawing you away. How can you factor out this time? Set aside some time with no interruptions. Turn off the television and get a babysitter. Time yourself as you do your craft in a timely manner.
Now you have a price. If it seems excessive, and you truly don’t believe someone would pay that much, you can alter it. Keep in mind, you can always lower a price on an item, but you can’t raise it. If it isn’t selling at the price marked or too many customers suffer “sticker shock” you can lower your price or have a sale without losing money. If you only charge material costs like in our original example, you will lose money with any and every discount.