I have an MBA. I tried to create a spreadsheet that included all this information, design time, design originality, cost, print time, etc. Something I could use as a formula for the future. I didn’t find it that useful.
Ultimately, you have to find the value (retail price v. need/'want/desire) that works for both you and your customer. Do you want to make 100 with a little profit or 10 with more profit? Are your products shippable - reasonable packaging and fees? Are you making something unique, rare, etc? How do your customers spend money (prefer not to at all, only if something is broken and they cannot fix it, or if it elegantly solves the problem they are willing to spend some money…or something else.
You can BET that gf wasn’t just priced on cost. They calculated their costs and knew them (as well as they could at the time) but there was an upcharge. GF determined the retail price for reasons other than simply hard costs and labor.
I AM NOT ON AND HAVE NEVER BEEN ON THE GF TEAM AND HAVE NO INSIDE INFORMATION REGARDING THEIR PRICING STRATEGY.
Most people know about, or were taught, pricing methods that were developed at the beginning of the 20th century for factories. I can’t think of any business that is central to a glowforge using that sort of pricing model. You should probably be looking at how small scale artisans price things - in other words your time.
If you’re finding that time in the glowforge is your bottleneck, than buy another laser cutter. If your margins are so thin you can’t afford another laser cutter, find another business. The glowforge isn’t a $300k 3D printer, it shouldn’t be much of a factor in your pricing model.
You mention personalizing things. What are you going to personalize? Is a laser cutter the best tool for doing the engraving? How much personalization will you be offering? If you say here are your fonts, and here are your sizes and it has to fit here, well that can be done. If you let the customer get involved, like supplying a photo that needs to be touched up, or “Can you do this?” you’ll find your time is being sucked up like a black hole eating a star. And then you’ll get a one star review. And remember, it is one thing to personalize a wedding gift aunt Wendy will be giving her niece and a totally different experience personalizing things for the wedding itself.
Back to pricing: there are a lot of companies a quick Google search away that create personalized objects. The question isn’t how do I set my prices, the question is can I meet my competition’s prices. If you cannot, then you have to find a niche, something totally unique, or convince a group of people your premium is somehow worth it - I believe they call them designer items.
I always tell them that’s great and if they find my stuff there would they be so good as to let me know so I can make sure they stop selling knock-offs of my work. All with a pleasant smile
If they get it, great. If they don’t, they’re puzzled why I am encouraging them to shop at Walmart. Then I feel bad for the future of humanity
It was a few years ago, so the information could be totally outdated and not at all relevant any longer, but Etsy used to say sellers spent about half their time crafting/making items and half their time managing their shop, photographing items, writing product descriptions, advertising/promoting, responding to customer inquiries, packaging, etc.
So be sure to factor all of that time into the “paying yourself for your time” category. It’s definitely not an insignificant amount of time.
If someone came to me for a custom shirt, then told me they could get a t-shirt at Target or Old Navy for a few dollars, I’d respond with, “Then why are you coming to me?” I suspect this would help a few people understand the difference, but most would probably feel like I was being a jerk. Maybe I’m not so good at dealing with customers.
There is a lot about general respect for what you are doing that differs year to year and place to place. In the sixties you could sell anything, ten dollars worth of wax poured into a hole in a bucket of sand with a wick and a few sticks and you could have four $50 candles that would sell quickly and better than the nice ones that were perfect for $5. All because your funky candle was not “commercial”.
Eventually because it cost almost nothing to start, and you could make them in the kitchen, there were far more candles available than people to buy them and you could not give them away.
Initially I could buy the gold for a ring for ten dollars and sell it for a hundred very easily but as the price of gold shot up the price rings would sell for did not change a lot and soon the expected price was below the,price of the gold, and at the same time generally it seemed that the artisan value in a piece of work reached into negative values.
My low point was as part of a collective of potters working in porcelain and stoneware that was selling very nice pieces for ten to thirty dollars while quite literally across the street a similar sized piece mass produced out of weak and fragile talc clay was selling for over a hundred dollars because they were “Pottery Barn” and we were just artists.
Now the pendulum is swinging back the mother way a little bit in part because you can do more precise and complex work much faster than a person with a dremel, and coping saw. But the price of entry is very much higher than the coping saw.
It is said that eventually everyone’s job will be replaced by a robot, but it is human creativity that will not be matched, and the way of the future is to own the robot and provide better ideas.
Well all the folk here own a robot or soon will, and it is our creativity leveraged by that robot that provides real value that at least some of what we are doing will hopefully be around a hundred years from now still bringing joy when we are long gone.
This too should be a consideration in pricing. Even if everyone of us sat down to make a coaster or a carousel there would still be no two of either alike.
True, however their credit card processing fee does apply to shipping as well. Not such a big deal for domestic orders, but it can be a bit of a hit when it comes to international shipping.
Just as a funny note… an old friend who is self employed stated that he made most of his money off of jobs he didn’t want. (He said if a potential customer gave him the feeling they were going to be a “real pain” he would multiply his usual quote by 4… and usually they saw a high price as higher value.) So in his words…win, win. Or at least get paid for his aggravation! Ha!
Yep. My prices escalate in direct proportion to my dislike for either the job or the customer ️
Somebody pays me $4K for a day’s consulting and I dislike them even more It just shows they’re not bright enough to be entrusted with money and they’re likely wasting someone else’s.
Yup, I learned that trick about 35 years ago fixing VCRs, repair was going to be a pita jack the price up and most of the time the customers will say never mind, when they don’t, you have made it worth my time.
i’ve talked to many young freelancers about how to elevate the kind of work they get and the kind of clients they get. 90% of the advice is to raise their fees/prices. once you’ve established that you do good work, there’s no value in doing annoying work for cheap people. they’ll nitpick you for every cent you charge, complain that something isn’t perfect, even though they’ve haggled you down to a rock bottom price, and constantly try to make changes to what they want.
so take a customer who pays you $25/hr and work 100 hours and be miserable doing crappy jobs. or charge $50/hr, dump the bozos, keep the good clients and work 50 hours. same money at the end of the day.
that leaves you more time for yourself or more time to go find more of those $50/hr clients. or maybe to find some $75/hr clients.
obviously it’s not quite that simple, but it’s also not as far from reality as people like to think. they’re just scared to dump the high volume, low profit customers because it’s income.
Very well said. I see this in wood working forums all the time. “I sell these at the flee market for $25” leave the flee market, work on polish and charge $125 for them! Sell half as many and still make more money.
LOL - my dad used to tell a story about how he and my uncle Chester both bought a bunch of drums to sell at the Pow Wows. Couple months after they bought them, they bumped into each other and compared notes, neither of them had sold any. So dad decided to knock the price down. That didn’t help much, so he marked them down again. Still no action.
A few months later, he and Chester see each other at another Pow Wow. My dad is still lugging around a bunch of drums, while Chester is sold out. His secret? Instead of lowering the price, he doubled it.
Sorry for the little storytelling tangent. Just a funny way to illustrate the point of perceived value
That is the the real issue that has plagued me from the first. If you say you are the finest artist ever, you can come off as a crazy person, but if someone else says so, even your spouse, somehow that is different. Toss in a variation of good cop bad cop and the results are amazing.
The basic structure of the sale is at heart schizophrenic. In one case you want to do the best the customer wants for the best deal possible, and on the other it is a privilege for them to actually hire you and they should of course be willing to pay for that privilege. Too much of either side and you are working for nothing or not working at all. Break that into two people and each can be the extreme.
Your customer of course has the same problem in reverse and again as two people haggling the results are stunning. I watched some diamond dealers in full form as the man and wife were almost yelling at each other and the diamond merchant had to almost give away his diamonds to provide a solution to their argument!
The dynamics between flimflam and genuine artistry has always been a tough call and never one I am co.mefortable with.
It just shows they’re not bright enough to be entrusted with money and they’re likely wasting someone else’s.