how to price

[rich gubbin]

Hi all,
Like a lot of you folks on here, im selling some of my work on to fund a hobby, now im not a greedy person by any means, and dont like putting price tags on my work, how ever i dont want to undercharge and upset other pen turners.

How do you work out how much pens should be sold at?

i read somewhere ages ago that you work out the kit price+blank x 3 +45%. This works ok for slimlines as that seems to be the going rate. However sierra pens and others vary dramatically even if there the same quality kits and similar blanks.
rgrds
Rich

 

[azamiryou]

Wholesale = components + markup + labor + overhead + profit
Retail = wholesale + costs of selling + profit

components: how much do all your materials for the pen cost?
markup: you have money tied up in inventory, both materials and finished pens; the markup reimburses you for the loss of flexibility in your money.
labor: how much do you want to be paid? For a hobbyist this may be zero. If you're making a living at it, remember you might not get paid for every pen. Usually figured based on time, with a little extra to account for lost work (blown up blanks, pens that never sell).
overhead: rent, utilities, etc. A hobbyist might be fine with zero; a business needs to account for everything.
profit: without profit, the business isn't making any money, which isn't much of a business. Once again, a hobbyist might choose not to make a profit.
wholesale: this is the minimum you'll charge for a pen.
costs of selling: web site fees, listing fees, time spent taking photos and writing descriptions; show application fees, time at shows, travel expenses; store overhead and salespersons' salaries, etc.
profit: selling is a business, too, and should make a profit. This is obvious if the seller is a store or gallery, but applies even if the maker is doing the selling. (A hobbyist may still choose not to make a profit, of course.)

That's what goes into figuring out a reasonable pricing structure; exactly how all those are sorted out is personal and different for everyone. Don't worry about other people's prices, just set your prices where they work for you.

The only thing I'd say is important is to know the minimum you will take for a pen, and set retail above that. Retail should be high enough that a store can make a decent profit if they buy at wholesale. When you sell to the public, charge retail so that you don't undercut stores that are selling your work. (Even if you don't have stores now, you may someday.)

 

[sbell111]

how ever i dont want to undercharge and upset other pen turners.

It is not my job to worry about the feelings of other turners. It is my job to find the price that maximizes profits. The mere fact that others do not use the same pricing methodology as I do is not my concern.

It should also be noted that any pricing scheme that uses cost to calculate price is flawed, in my opinion. 'Cost+' should only be calculated to determine the floor below which you will not sell. Using costing to calculate actual sales price penalizes you for any efficiencies that you attain.

 

[gbpens]

When I first started years ago I tried the "cost" method. It worked on smaller pieces but not the larger pens. Customers did not care what the piece cost to make but rather appearance and nothing else. The price is what the customer will pay! Nothing else matters. I price by style not material. The exception is highly detailed pieces which make for a more distinctive pen. Customers usually understand a higher price for such a piece. Experiment with your prices and do what works for you. If the prices you can get do not yield a profit you will have to decide if you wish to continue your hobby. If so, then you will have to work on quality, presentation and venue. Do not get discouraged, keep trying. One more thing.... every piece you sell is your reputation. Quality has to be the top priority.