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View Full Version : Working out what to charge?!?



staceyjlew
01-12-2008, 11:00 PM
The most common method of working out what to charge for an item to sell is double cost of materials plus labour, is what I gather from other threads.

My question is, is the cost of materials, just the cost of materials, or do I factor in what it cost me in P & P to buy, e.g a pram motif costs 0.65 but if I add in the P & P I paid, it comes to 0.70 - which figure do I use in working out cost of materials??

Thank You - such a minefield!!

Stacey

silvermaid
01-12-2008, 11:17 PM
You should add in all the costs including P&P and even petrol if you had to make a special trip to get something. Depending on what you are making and whether there is a limit on what you could charge, a lot of people would consider 2x materials + labour would be the wholesale price, ie; If you were selling in bulk or to a shop. The retail price would be double that figure.

Melanie

staceyjlew
02-12-2008, 09:39 AM
Thanks very much :) - think I'll be spending the day looking at my figures!!

Stacey

samigail
02-12-2008, 12:06 PM
I never know what to charge either, it's quite puzzling

KitsKreations
12-12-2008, 01:12 PM
I am always having this dilemma.
I never know how much to charge and I worry that I am either short changing myself or charging too much.

I do try to see what other crafters charge for their wares and then price mine accordingly, but it is vey difficult...I think that I will be usint the method described above from now on because that works out about right for me.

I do find that being a card maker it is a lot harder to price your items as people dont want to spend too much for a card...3.00 is as high as i can go before people start to ummm and arghh and at times I am losing money because of the time it makes to create or the items I have used.

I use rubber stamps and with these I use my peewee glitters and I still to this day have no idea how to price one of those depending on the things I have used.

debsjeans
12-12-2008, 02:51 PM
I think you are suppose to add around 30% to products after adding time and material X 2 cost for overheads such as reusable tools.

So say you used 2 gbp in material that would 4 in material and it took you 1hr to do you would give yourself an hourly wage maybe 7.50 that would be 11.50 X 1.30 = 14.95 you would have to add vat to that wala or am I wrong?

auntynet
12-12-2008, 03:21 PM
You only add VAT if your company is VAT registered.

I'd imagine its so much easier for us jewellery makers to work out costs than it is for card makers. When I get new supplies I count the beads and then divide the total cost (inc postage costs) between the number of beads.

eg: I buy a pack or string of 40 beads costing 3.00 and then I add on the 1.00 postage costs so that means they cost me 4.00 divide that 4 by the number of beads which is 40 so each bead has cost me 10p each. I then make sure that the cost per bead is marked on my packs.

It gets a bit complicated when you order several packs of beads and you have one P&P costs but its not too bad to work out.

If you buy 3 packs of beads costing 1, 2 and 3, and the postage cost was 1, then you divide the postage cost between the packs of beads and add that onto the cost so in this case, you would add 34p onto the cost of each pack of beads and then divide it by the number of beads in each pack.

If your buying a real bargain and each bead (or jumpring or crimp etc) has cost you less than 1p, just count it as 1p.

sounds complicated but once you start doing it you soon get your head around it and it becomes second nature and its so much easier to work out the selling price of your goods.

When it comes to a pricing formula, you should add up the cost of every single component and then double it. Then you add on your hourly rate which will give you your selling price. Most people on the forum use a formula something like this one.

Hope this helps.

goldy1
12-12-2008, 03:27 PM
My 14year old has just put all this kind of info on to a data base for me. I can now add in which pieces I've used and it will work out the price of my made item. He is so clever it even works out my stock control :mf:

staceyjlew
12-12-2008, 09:52 PM
Hmmmm, think I have a slight problem in that case.

Just priced up one of my cards and double materials and labour alone, cost me 6.50 to make!! Can't charge that, or anymore - might have to rethink a few things :(

Ahhhhhhh!!

Stacey

debsjeans
12-12-2008, 09:54 PM
oh no :( I'm sorry.

auntynet
13-12-2008, 01:23 AM
Hmmmm, think I have a slight problem in that case.

Just priced up one of my cards and double materials and labour alone, cost me 6.50 to make!! Can't charge that, or anymore - might have to rethink a few things :(

Ahhhhhhh!!

Stacey

I'm sure you're not the only card maker thats in this position - I've always said there must be very little, if any profit in card making. Like I said earlier, its a lot easier for jewellery makers.

Maybe if you post your question on the Card Making forum then other card makers may be able to help.

RhinosoRoss
13-12-2008, 11:30 AM
It's worth mentioning that something can be too cheap: if people perceive something is being sold for too low a price, they won't buy it!

Ask people what they think things should be sold for: while chatting with other stall holders at a craft-fair ask them what they think the most expensive thing on display ought to be, and how much they think it should be sold for. Chatting with browsing customers and asking them, would get them more involved too. Once you can get a pattern of what people's eyes are most drawn to, you can evolve what you sell to be more like the most popular item and the item with the greatest perceived value.

AnnieAnna
13-12-2008, 03:05 PM
Don't give up Stacey.
I've been there (and still keep making the same mistake:frusty:) but you are right. There is a price above which people won't buy. You have to decide whether you want to sell a few (or none!) expensive things or lots of cheaper ones.
So look at the formula as something to aim for but stay happy if you make any profit at all.
Then, with new things, try to be a bit more cany. Try to cut down on the cost of materials or speed up the making time.
A cheer you up trick is to make stuff from the left overs. The materials are already accounted for so didn't cost you anything. ;)

Someone did once say to me if you want to make any money don't be a maker (I didn't listen to them). I'm not a millionaire but my creative urges are fulfilled and I'm a happy bunny.

Mrs T Riddiough
16-12-2008, 01:32 PM
If I took into account the time when pricing items I'd be selling tatted bookmarks with a three figure price tag. :o

I generally double the material costs and if it doesn't seem like a lot I'll double it again. I generally make the items I want to make though so the time element isn't really an issue but I still want to charge a reasonable price. It's always a difficult one to judge especially where I come from, an area of heathens who'd split ha'penny in two.

RhinosoRoss
17-12-2008, 10:27 PM
Interesting bit at the end of this lecture on cost and value:
http://www.ted.com/index.php/talks/benjamin_wallace_on_the_price_of_happiness.html

staceyjlew
17-12-2008, 10:43 PM
Thanks everyone for advice. Think I'm going to have to be happy with making any kind of profit this time round!

I'll have to look at that lecture when I'm not so tired - tomorrow morning :)

Stacey