I need some advice... How do I price my products?

[Louise Brack (Loula Designs)]

After my final show, someone rang me wanting to buy some of my work, to put into a new shop opening in London soon! :) However, I really don't know how much to sell them for.
I don't know a lot about the shop, but I think it's unique and slightly expensive?

So I really don't want to under sell myself! but again, I dont actually think my work is worth a lot! =/

Any advice would be very helpful :)
Thanks x

[Jessica Noonan]

Hi Louise,

When I price my work to sell to galleries I add the cost of materials to my labour cost per hour and add on a small percentage for profit.

For example if something took me an hour to make and the materials were £5.

£7 labour (Some people would say this is too cheap, others too expensive. You have to work out what hourly rate you would be happy with) + £5 materials + 10% profit (I sometimes put a bit more on if I think I can) = £13.20 (Wholesale price).

Most galleries and shops double your price which would mean that the piece in my example would retail for £26.40.

I don't know if you are planning on doing any sale or return but if you are it might be worth thinking about how you would price your work. Galleries can have different rates of commission. In my experience most of them work on about 40%.

Taking the example above if you were to let them have your piece at £13.20 then it would retail for £22 (£13.20 divided by 0.6). You might not mind that your work retails at different prices in different places, but I prefer to keep the retail price the same. It also means that you will earn more for any sales you make on SOR (Eg: £26.40 - 40% = £15.84). I think that is fair as with SOR you are not getting any money up front but you might have £100 worth of stock tied up in one place.

Hope that helps,

Jess. x

PS: Look in galleries and shops that sell handmade items similar to yours and see what sort of price they are selling for. You might not think your work is worth a lot but you might be surprised at what others think!

[Louise Brack (Loula Designs)]

Thanks for the advice, it's helped me a lot! :)

[Larissa]

Hi Louise,
The next issue of UKHandmade will have something in it you will find very interesting and hopefully useful re your question.
Do not undersell yourself! After all .. you are a designer. You just graduated from college as a designer too so don't forget it (not that people who have not gone to college cannot be designers too!).

(PS - Up until very recently I lived in Newcastle and did my some of my teacher training hours with the Illustration course a few years ago at Newcastle college!)

[Claire Fairall]

Really usefull advice, I struggle to decide on prices, i've tried looking at others work to get an idea, but no-one I've found does anything quite like my bags. which is a good thing, I know that means I have my "unique selling point" but it doesn't help in priceing!!
The other point is as I make so much I would'nt dream of paying/be able to pay designer shop prices, makes it hard to put those kind of numbers on my price lables....

[Catherine Marche]

when pricing, you also need to take care of your overheads.
You need to add all expenses, say for a year (rent, tools, insurance, show fees, etc...) and divide them by the number of hours you will be working
for example
studio rent £200/month = 2400
insurane £200 / yr
tools £300/yr
shows fees £100/yr
total = 2400 + 200 + 300 + 100 = 3000
if you take 4 weeks holiday ==> work 48 weeks

==> 3000/48 = 62.50/ week

and then if you work 18 hours / week
62.50 / 18 = 3.50

Therefore, you will need to add £3.50 per hour to yourlabour costs (in previous example £7) = you would use £10.50 per hour with this example to include both labour and overheads

I hope this helps

xx
Catherine
http://kalicat.etsy.com

[Victoria Peat]

For me I have always worked my pricing from recommended retail price backwards, which I realise can be difficult if you don't have anything to compare your product to or are prone to underselling yourself.

I start with a product and decide that it's worth £20 when bought in a shop. I then take off the 15% VAT that a shop will include in the retail price which leaves £17.39. I then assume that the shop will want to make about 50% margin on their buy/trade/wholesale price - a nice round figure of £8.50 will give the retailer a 52% margin.

I then work out whether the £8.50 trade price less costs (materials/labour/overheads/P&P etc etc) gives me a suitable profit.....

If not I increase the retail price or slightly lower the retailer margin (although I tend to work on 50%-60% margin)

In this way I sell on my own site at RRP and make a very good margin, but can also sell at trade price (making less of a margin, but still make it worthwhile) without there being price disparity in the market - shops don't really like it if customers can find your product substantially cheaper from the designer's web site.

If anyone is interested I have a spreadsheet that works out the margin for you, all you need to do is put in a few of your own numbers.....

[Christine Toomey]

This is a great thread for all of us new sellers- Thank you all for the useful replies-they are valued and appreciated.

Many Thanks

Chrisx

[Sakura]

Hi Louise

Check out p62-65 of the Summer Issue of UK Handmade Magazine there is an article all about this :D You can see the mag here

Sakura x