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pricing (kinda long)

updated tue 31 dec 96


Fred Hayward on sun 15 dec 96

After 18 years marketing our crafts mostly retail through craft shows,
but also on consignment, wholesale and through a sales rep. we have
approached the pricing dilama in the following ways.

First we realize that there is two components to the potters "business."
First is the "manufacturing" and second is the "marketing." From this
basis we split our prices and our cost analysis. We have decided that
we would work on a 60/40 split.

The 60% is for "manufacturing" which must include our materials (clay
glaze chemicals etc.); studio overhead (heat, light, rent, taxes,
insurance etc.); consumables (cones,sponges,sandpaper etc); equipment
(klin,wheel,fixtures); and most importantly your remuneration. DON'T IN

The 40% goes to selling the pots. This must include selling expense such
as booth fees, commission fees, shipping, hotels if you are travelling,
and again your remuneration for sitting at the show 10 to 12 hours
straight! (This 40% figure is what our retailers get for carrying our
work. Our consignment rate usually 35%, leaves 5% for the cost of
delivering the pots to the shop.)

Now this may seem fairly cut and dried and if applied totally would
result in some ridiculous prices. True, but now if you apply this as a
guide and you check your "profitable" price to the "market" (your fellow
crafters) you should be able to come up with some reasonable prices that
both "sell the product" and repay you for your creativity and labour.

A final note on your remuneration. Look at the hourly wage for "skilled
trades" such as auto mechanic, plumber or carpenter in your area or if
you are starting out then use a figure of an apprentice. (Don't use the
shop_time_charge as that includes much of what I call the overhead

Fred (in the Whonnock rain forest, where it has just stopped raining and
is forecast to start again in a few hours.)

Maple Ridge, B.C.

Jeremy M. Hellman on mon 16 dec 96

Hello all--here are other thoughts on pricing (mine)--

Another of the tenets of pricing one's goods or services is related to
the market (along the lines of "What the market will bear." You will have
more sales if your prices are in line with the expectations of the
market. If your mugs and bowls are the same more or less as similar ones
on the market where they will be sold, you ought to be familiar with
those market prices. (Yes I know they are really different from everyone
else's but I am refering to the perceptions of your buying audience.) If
expectations are that mugs of a certain quality and size sell for $ X
then I will find it easier to sell my mugs of a certain quality and size
for that same price range. If I have a following or if I (or my
representative) can convince the buyer that my mugs are distinguishable
or better in some way than the average mug, I would hope to sell it for a
higher price.

Also, several shop owners have told me that there are several thresholds
of prices. One is the impulse price threshold--approximately $20. This is
the price where people are more likely to buy a piece of ceramics (and
probably many other things) without a whole lot of thought. Once the
price is considerably over $20, people want to think about it.

The other threshold is the $50 gift price. One shop owner said that
people will come into her shop (where mostly functional ceramics are
sold) and say they need a wedding gift. She'll ask them about what sort
of piece they have in mind, and what price. The price answer is most
frequently "about $50".

Now if my ceramic work is labor intensive or material intensive, and the
market where I hope to sell this work will not support the price that I
feel I should get for my work, I have a problem. I may need to find
another market or decide that I am willing to earn 5 cents an hour for my
labor (not really) or redesign my product or find another way to earn a
living. There are probably other choices, but if I cannot sell my goods
at a price I consider fair to me, then I have a problem. There are many
books and articles about creating speciality markets and this is another

However, we as ceramic artists also have another option which is to
create work that is sold as "Art". I'm not saying that our functional
ceramics are not art. I'm referring to selling our work as a work of art
in terms of pricing. We've all seen ceramics in galleries which looks to
us to be priced out of sight. I certainly wonder who would pay that kind
of price for that piece. Sometimes to my amazement, I've been told that
so-and-so's work sells very well, when I wouldn't give it space in my
house at any price. What I am saying is that the pricing on works of art
starts out much higher than the price of a piece of functional anything.
(And before anyone gets out the flame thrower, I like functional
ceramics, and that's what I make myself.) (Although I'd love to get into
the pricing scheme for works of art!)

If someone told me that I was pricing my work too low for the market, I'd
certainly follow their advice and raise my prices. In some circles, value
is determined by the price you pay. If you pay me $100 an hour for my
advice as a CPA you'd probably think you were getting "better" advice
than if you paid me $10 an hour for my advice. The irony is that if I
priced my CPA/tax advice at $10 an hour, I'd probably have a hard time
finding clients--the price is just too low for me to be credible.

There's a lot more to say on the subject of pricing, but I've gotta turn
up the heat on my kiln.

Bonnie (CPA in Pittsburgh, gearing up for tax season)

"Outside a dog, a book is a man's best friend. Inside a dog, it's too
dark to read" Groucho Marx

" " Harpo Marx

"Time flies like an arrow. Fruit flies like an avocado" Att. to GM