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How do you price up goods ?

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  • How do you price up goods ?

    whiskeyglass.jpg
    This might sound an odd question but one i find myself asking myself frequently... lol

    i just started etching glasses for friends and family and like but whenever they as me how much i kinda squirm around for a while before deciding on a price.

    lets just say the item costs me £1 to purchase as a blank ... with etching i have to design and cut the vinyl i use to make the masks with ..then thoroughly clean the glass with a decent grease proof detergent etc etc ... then to the etching which the equipment wasnt free to begin with ... only real cost here now is the powder to etch with..which isnt cheap.
    How do u put a price on your time and effort?
    Last edited by funkster; 21-03-2011, 01:17 AM. Reason: add picture

  • #2
    Give yourself an hourly rate that you are happy with, add cost of materials, don't forget things like electricity, wear and tear on tools and equipment, you will have to replace it eventually, etc. then at least double it. If it is for friends or family I will usually quote thta price the give a discount on it ensuring that they are paying less and I am still not out of pocket.

    Others may have different formulae but that is basically mine.

    Pete
    "Where the spirit does not work with the hand, there is no art" ... Leonardo Da Vinci
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    • #3
      I do materials
      plus my hourly rate
      plus something to cover heat, light, advertising, transport to fairs and pitch fees etc. (If it helps this is coming out as a quarter of my costs, but it might not be the same for you.)
      I ought to add something to cover my time taken up in selling but tend to either have fun or make as I sell so don't bother.

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      • #4
        I learned a valuable lesson a while back as well, to think about how long it would take someone else to do. When I'm doing new stuff that I need practise with I take this into account ie if I was doing this all the time and had the right equipment how long would it take me. New stuff may take me much longer than someone else could, so it's always on the back of my mind x obviously doesn't apply to everyone, but thought it worth a mention x
        Nici

        Website: http://www.goblindreams.co.uk
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        • #5
          I use the same as Pete's method. You need to take EVERYTHING into account, if you make it too cheap you're selling yourself short, people are paying for your skill and talent and that's generally worth a lot more than people give themselves credit for. With respect to the hourly rate think about it in terms of if you were doing it full time. How much would you need to earn per day/week/month to cover your day to day living costs? It would be awful if you did want to take it full time but hadn't allowed yourself enough of an hourly rate and had to increase all your prices.

          Good luck x
          Rach
          x

          www.rachellawdesigns.co.uk
          www.rachelsboutique.co.uk
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          • #6
            This is always an interesting question, and I think it depends on what you are trying to achieve. Are you doing this as a hobby, lifestyle business, or scalable business? These are three very different things.

            If a hobby then the delight of doing the work is reward in itself, and people usually just want to make enough to buy they next batch of materials. If it's a lifestyle business, you will want to make sure you are rewarded for your time and effort, as well as all those 'hidden' overhead costs, you may well have another day job that pays the bills. It's a very different thing if you're wanting to run a scalable business (ie one where you can take on employees as the business grows, and you need to rely on the income to pay your bills). There are many hidden costs here, and if you plan to rent premises, take on staff etc you will need to price your items to enable you to comply with Govt. regulations (eg paying maternity leave, sick leave, costs of contracting out payroll etc), which you won't realise until you start to forecast the costs associated with this.

            So, the first thing you need to do is be clear with yourself what you are trying to do. If you want to run a scalable business, I would suggest going along on some Business Link courses where they will go through the sorts of things you need to think about. In my location location, these courses are finishing in September/October this year, so you might want to find out what's available near you.

            If you're doing it as a hobby or lifestyle business, then it's slightly easier to be sure you're covering all necessary costs, so you can charge a bit less.
            Annie

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