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Thread: Pricing... Again.

  1. #11
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    In consumer electronics terms, people will pay £500 for a base model Ipad whereas you could get a similar spec'd android variant for £3-350.

    Why do they pay more? Because of the percieved better quality ( and arguably apple products are superbly made ) but more importantly is the expert branding and marketeering behind Apple products.

    On an albeit micro level, thats what everyone who makes handmade jewellery needs to do if they're interested in selling for fair profits, and not simply content with scraping by.

    Just my humble opinion.

    Nick

  2. #12
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    If I had Apple's budget, I'd have expert branding and marketing too

  3. #13
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    On 2 occasions I've had women ask if the numbers which relate to the price list are the prices. On the first occasion the number was 2 for a collar! People are becoming used to jewellery party prices and some think that's what ours should be. I have made excuses twice this past week for the price of something and then I pull myself up as similar pieces have already sold at that price to other people so it's just finding the right owner.

  4. #14
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    Quote Originally Posted by ajda View Post
    It's a useful formula, Peter, and for an established professional probably not hard to apply. But for someone who's learning, it may have to be tweaked considerably. First, because a relative amateur with little track record may find it harder to win buyers' confidence, make sales and build that track record if they try to charge the same prices as the pro. Second, because items involving new techniques are likely to take longer and result in more wastage than tried and tested "production work".
    OK, so if you have as nominal £10/hr rate, then take twice as long as you think it ought to, you adjust either the time cost or the hourly rate accordingly. Still applies. You can't raise your prices easily if you've done your earlier pieces as loss-leaders (and loss-leaders have no place in luxury goods markets).

    BTW - James will tell you the x2 (keystoning) retail cost is low for some places.

    I use a similar kind of formula as a starting point, taking into account materials, time and investment/growth/development, as you suggest, but I often then adjust final prices as I think fit to suit my market. Occasionally, particularly with a new or experimental design, my hourly rate would add up to very small peanuts if calculated strictly according to the formula - on the other hand, if the customer is covering my basic costs and a little more, then I'm effectively getting a load of research and development for free.
    If you're not incorporating all your basic costs then you're not getting the R&D FOC, you're paying for it.

    Part and parcel of this kind of work is that there is a cost for experience too - the old joke about the guy with the hammer who sorts out a machine with one tap, then charges £500 for it. "But you only hit it once" "£1 for the tap, £499 for knowing *where* to tap it".

    Regarding devaluing work by underpricing, that's a thorny issue. Yes, undervaluing your own work can definitely backfire on you; and being sensitive and respectful to others with whom you are sharing a platform (in all aspects, including pricing) is important; but in an open and free market, if one person wants to value their time at £3 an hour, another at £30 and another at £300, who's to say they can't? Provided you can justify yourself to yourself, your customers and those around you who may be directly affected (not indirectly, simply as competitors in the wider market), then pricing is entirely your own affair.
    If you devalue the market as a whole by assisting in creating the impression that handmade work is cheap then you are doing everyone a disservice - and it is extremely short-sighted. You may get sales in the short term, but trying to work with more expensive materials, or more advanced techniques later on and you'll have trouble trying to charge properly then. It's a problem I've seen in the handmade knife market too - hobbyists who charge £50 for a knife because that covers materials costs, yet have spent 10-20 hours on the thing.

    Again, in this specific case with the exhibition - I *am* one of the people who is there to say they can't charge £3/hr. There are hobbyist, part-time and full-time jewellers exhibiting - there has to be some cohesion on pricing structures or it becomes a race to the bottom.

    PS - If money were the only object, we might all be flipping burgers or stacking shelves, or training to be lawyers/accountants/etc, but there are all kinds of other reasons why people choose to be self-employed and/or pursue creative work.
    Absolutely. I am a case in point on that. But the justification I was given yesterday about "needing cashflow" rather falls foul of that ideal.

  5. #15
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    Quote Originally Posted by Nick martin View Post
    In consumer electronics terms, people will pay £500 for a base model Ipad whereas you could get a similar spec'd android variant for £3-350.

    Why do they pay more? Because of the percieved better quality ( and arguably apple products are superbly made ) but more importantly is the expert branding and marketeering behind Apple products.
    Arguing They do some good work on UIs, but their hardware is horrifically underspec for the price. Apple's approach is anathema to my usual form-follows-function approach (and then there's the unrepairable built in obsolescence).
    It does show both the cost and value of well executed marketing though.

  6. #16
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    Quote Originally Posted by Nick martin View Post
    In consumer electronics terms, people will pay £500 for a base model Ipad whereas you could get a similar spec'd android variant for £3-350.

    Why do they pay more? Because of the percieved better quality ( and arguably apple products are superbly made ) but more importantly is the expert branding and marketeering behind Apple products.

    Nick
    You make a really good point Nick and I 100% agree with you that this should be the case - in theory........

    My problem is that at the moment I have 8 gold fingerprint necklaces, all weighing about 10g of 9ct / 18ct gold sitting on my bench. All hand engraved, stone set, etc and all have taken me HOURS to make.

    Yet I still get people phoning up saying they can buy "the same thing" (yeah right) in silver clay for under £100.

    I've been working full time at this for 10 years and I 'm lucky to have a good reputation, but I've just had to accept that there is a ceiling price on my type of product.

  7. #17
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    Yes its all those extras that are difficult to factor in ( time spent marketing/website/posting etc).
    Heck I find it difficult enough to figure out how long something takes to make even when Ive made it before as I generally have quite a few items on the go at once !
    Last edited by enigma; 15-12-2015 at 12:58 PM.

  8. #18
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    Lucie,

    I can totally understand your point of view, and I agree it must be very frustrating and disheartening and Im sure I've got lots of it coming my way too!

    But.. for your own sanity, not to mention profit margins, wouldnt it then be advisable to not accept defeat on your pricepoint and instead put your designs into a marketplace somewhere where perhaps the buyers are people with more disposable income and who also appreciate the differences between your items of jewellery against cheaper mass produced variations?

    Nick

  9. #19
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    Peter you and I see eye to eye on the issue. I had started to copy quotes to respond to a number of things only to see you already set out the same sentiment in your last two posts!

    Its a complicated matter which has been exacerbated by the internet enabling people who do jewelry (and other aritsan work) as a hobby to become part of the general Market - [which isn't to say it should go back to the way it "was before", lest people get up in arms about that statement].
    I understand the argument of "but I just do it for fun" but it does indeed become a race to the bottom when we all have to ( or feel we have to) compete with those under-pricers.

    In a sense, I think one of the better ways to compete with low price hobbyists is in educating the public and explicitly telling customers WHY jewelry is so "highly" priced. One does't want to continously feel like they're defending their work and their prices, but the public generally honestly does not know what goes into a hand made item. This is why some of the biggest purchasers of handmade items are those who are in the artisan industry themselves.

    We also cannot forget basic marketing advice that we are selling not just an object, but a memory, a feeling, an expression, and identity etc. We (humans) do not see objects as they are, but as we are. So you need to sell objects with that in mind.

    But for someone who's learning, it may have to be tweaked considerably. First, because a relative amateur with little track record may find it harder to win buyers' confidence, make sales and build that track record if they try to charge the same prices as the pro. Second, because items involving new techniques are likely to take longer and result in more wastage than tried and tested "production work".
    I see what you mean, but also keep in mind if you're building a customer base (out side of friends and family) as you go, you're painting yourself into a bit of a corner as you're teaching those who buy from you that THIS is the value of your work. Its a long uphill climb to secure new customers as you raise your prices. I struggle with this myself as I'm a perfectionist, but too new at the trade to attain perfection, so I do understand where you're coming from.
    Last edited by emsterv; 15-12-2015 at 08:27 PM.
    - Emily

  10. #20
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    Quote Originally Posted by ps_bond View Post
    Again, in this specific case with the exhibition - I *am* one of the people who is there to say they can't charge £3/hr. There are hobbyist, part-time and full-time jewellers exhibiting - there has to be some cohesion on pricing structures or it becomes a race to the bottom.
    I don't think you've actually explained the specific case so I'm slightly in the dark... As I said, when sharing a platform (exhibition, retail space, etc) it would be right, at least morally, to be sensitive to people around you who may be directly affected by your pricing (among other things), but not everyone is. You say people "can't" undercharge in such a case, but clearly they can and they do.

    So who's to blame? Perhaps the organisers, for not selecting compatible exhibitors or not imposing pricing controls. Perhaps you, if you are unable to justify your higher prices to customers or you choose unsuitable venues for your work. Perhaps those who "undercharge" - arguably if they first check out your prices and then mark their own down in order to undercut you, but if they independently price their work as they see fit, keeping within the law and the rules of the marketplace, they're not to blame if it doesn't suit you.

    A discrete, defined marketplace like a show or exhibition or even a large trading bloc, can impose rules through its organisers or its members, but most of us now are in a worldwide market where open, unregulated competition is the only rule. How you distinguish yourself from your competitors is the key and there are lots of ways to do that. You can build a brand - a Hermes handbag may be no better than an artisan handmade one, but you can be sure it'll command a higher price - so you're selling an idea or a dream rather than the object itself. You can build a word-or-mouth reputation for quality and design, or educate potential customers about the value of your skill, time and materials. You can let your work speak for itself and simply allow the customer take or leave it.

    If your only criterion is price, only then do you join that race to the bottom - but, again, who's to blame?

    Alan

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