How does one go about pricing their products?

I’m just going to quote @jbv quoting me to make this totally meta. :smile:
But really, hard lesson for me, never sell yourself short.

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I was going to ask the same pricing question so this is perfect timing for me. I’ve had folks wanting to purchase one of my police plaques and I’m struggling on the price. I think I’m like an awful lot of folks who tend to under value their time and skills and I’m really trying to break away from it. What’s hard for me to factor is all my design time :-/

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I think about it this way: I’ve put not only money, but time into learning and knowing a tool that I can use to make something for someone they cannot make for themselves. That experience has a premium. Not to forget about all the material waste I had to incur in this learning.

On top of that is material costs. I try to consider what one would pay at hobby lobby for a material of this type, plus shipping, and wastage. That comes out to roughly 4x the cost I actually pay for lost materials. It’s a great starting point.

If I have to do any complicated assembly using multiple materials and build jigs to align things I also charge for my time.

I keep shipping cheap. $3-5 usps makes everyone happy. No one likes double digit shipping.

People understand custom work costs a bit more. This isn’t a factory with efficiencies built in. But you can also add cool little things on the fly. I always try to give people who buy things something extra with their order.

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I thought the 499 price came from when they planned to have it shipped both ways for installation, but then decided to sell tubes with an option for installation instead. Or have they come forward with an actual tube price since then?

Would be great to know given the, hopefully, soon shipping.

Perceived value is huge with handmade items or artistic things. I think maybe people don’t trust their ability to judge skill or talent, so they rely quite heavily on price to determine if something is “good” or not.

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correct, and i’d be surprised if they come out with a discrete tube price for a few months. i’d also be surprised if the tube price ends up being much less than the ‘shipping-both-ways’ model.

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IDK and in the context of the question an exact price doesn’t matter. It answers the question do I need to consider this as a factor in my pricing model or is it rounding error to be lumped into overhead?

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Think about automotive repairs. If you don’t know how much the garage will charge you a great estimate is parts cost + parts cost + parts cost again. And that’s about the minimum they’ll charge you.

And then there are these:

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My pricing also factored in what I think the price would be if I saw that piece at a local shop or gallery, and what is the highest I think someone would buy a piece for. I’ll gut check my ideal price until it is something that I think will work.

The other thing that I keep in mind is that the people who can and will buy often have more disposable income than I normally do and a lot less time to learn a new skill. In their eyes, the price is worth not having to figure it out and learn how to do it with no guarantee that their end product will be as nice. I could never afford to market and sell to people from my thrifty mindset, as my first thought is that I can make that for much cheaper!

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I think you’ve put your finger on the source of the problem for most makers.
They’ve often had a history of living at the bottom of the market, and it’s difficult to get out of that mindset.
John
:upside_down_face:

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This is why I do my own car brakes, oil, and other things and my inlaws go straight to, not just any garage but, the dealer instead.

$120 and an hour of time or $350 and an hour plus travel time both ways(if you don’t drop it off and have someone picking you up and other things).

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Exactly! I’ve done mechanic work on every car I’ve owned when I have access to the necessary tools, and partnered with my husband for just about every large car job except changing out a fuel tank.

Money left in the bank and new skills learned every time! Granted, smashed and cut fingers suck, but pride in ability goes a long way to soothing that pain :stuck_out_tongue_winking_eye:

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Just an idea, my approach is always to earn customers, so I try to make and price my products in the hopes of gaining customers and not just making sales. That’s just my own 2 cents (maybe 1 cent)

It can really depend on your market. Perception is a big thing to those looking to price cheap to gain customers you have to ask what type of customer you want.

Cheap goods gain you cheap customers, these are often the ones that will complain the most and extort the most time from you. And dump all over your business for anything they feel you should have done for free.

Valuing what you do will get others to as well. Perceived quality is seen as higher and they complain far less and recommend you more. Also making 1 thing for 100 dollars is better than 100 things for 1 dollar since its way less labor and material.

Think about Apple. They market a wildly mediocre product line that nearly always has a better cheaper alternative, however, they make it look really nice and expensive, and sell it as such. Nothing against those that like their products, if they work for you that is what matters. But they are a wonderful business example of pricing for the customer you want, ie easily pleased with something decent and wanting to be trendy while willing to pay premium for it. They did this and found a loyal and forgiving market like no other which is fairly brilliant as a strategy.

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And another thing, remember that you are asking people to pay not only for the product itself, which frankly is often worth darn near nothing in material costs, but you are also asking people to pay for years, decades, lifetimes of experience. Almost anything you make by hand someone else could also make on their own, but instead they will pay YOU because you have put in the years to learn how to make that thing better, more perfectly.

I’d rather have one highly dedicated return customer that pays $100 for something, than 10 people begrudgingly willing to pay $10 and then never think of me again.

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If artists charged based on the cost of paint and canvas, there would not be as many great works of art in the world. Experience, skill, creativity, inspiration and time all must be factored in.

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After reading the advice here I decided not to sell myself short . I’ve had several folks inquire about purchasing my police auction plaque. I was almost embarrassed to tell them it would start at $100 and go up with customization. No one batted an eye. :relieved: Serveral folks said they didn’t need to know the cost up front, just let them know how much they owed me. Felt kinda nice.

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That’s great! And I suspect you still won’t be breaking even on your design time, let alone materials, until you’ve sold several.

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That is so true :slight_smile:

I spent 5 hours last night designing and cutting a clipboard for my wife to give to the handyman at school. Part of the issue was the silliness with the UI that would only let me do one operation (load, cut, engrave, etc) at a time before needing to log out and back in for the first couple of hours. Since I wasn’t using a PG Clipboard I did trials on Baltic Birch and then finally the one I got from Staples.

In the end I’m not happy with the results and I’m going to make my own clipboard out of PG ply or Draftboard. I found the clamps on Amazon (being delivered Friday). The hardboard/MDFish stuff that clipboards are made of doesn’t engrave with the definition I get on other materials. So although I finally got a nice result on the birch, the result on the production one wasn’t up to snuff.

By the time I’m done it’ll be 8 hours to make a simple clipboard. No way I’d be selling any ever for a price that would pay back the time :slight_smile:

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