Showing posts with label Pricing. Show all posts
Showing posts with label Pricing. Show all posts

Tuesday 24 May 2022

Stained Glass Project Sheet

Why is a project record sheet useful?

 

A record of a project helps to set down the client and maker agreements, estimate quantities, determine prices, review past practices for successes and record possible changes for the future.  Even if you do not have clients, comparing the record sheets over a period can give you information on how quickly you work, the amount of glass you use in relation to size and complexity, information for costing, etc. It can give you confidence in stating - and sticking to - your prices.

 

What should be included? 

Desirable elements include the following.  You may have others to add according to your individual practices.   

Initial project information

  • ·        Project description - including dated sketch or photo or reference to cartoon
  • ·        Intended location – autonomous, primary glazing, encapsulated, attached, etc.
  • ·        Dimensions for both two- and three-dimensional projects.
  • ·        Delivery date. This may be an estimated or firm date.
  • ·        Price or estimate – indicate which. 

Materials

·        Number of pieces. Approximate the number, if a numbered cartoon is not available. You can add the actual number later.

·        Glass type and codes that you will (or have) used, in case additional glass is required.

·        Amount and cost of glass used during completion. This is not simply the amount used, but also the amount you would require to replace the glass stock.   

·        Joining materials: came, copper foil, lead light cement, patina, adhesives, wire, mountings, etc.  These should once again include what needs to be purchased with their costs, rather than just the amount used. The whole roll of copper foil, the whole tub of lead light cement, etc., need to be accounted for on the form to give an accurate idea of costs.

·        Solder manufacturer, type, composition, and quantity purchased, and costs, rather than what is used. 

Process methods

Cleaning, Polishing, etc. descriptions. 

Time

The time used to complete the project should be noted as you go along.  It can be divided into various process – such as cutting, fitting, foiling, soldering, cleaning – or as a simple cumulative amount of time on the whole project.

Description of project results

A critique of the project including what might be done differently, the successes, the discoveries, should be written up at the end of the project. 

 

What does all this record keeping provide me?

Recording this kind of information provides a record of how various projects went, how you met any difficulties, what the successes were.  This is useful to look back on when similar projects arise. 

This information is invaluable in assessing materials costs, and time required for various styles and complexity of projects are requested.  It enables a quick and assured way of estimating the costs of a project when a commission is requested.  It gives you assurance about your pricing and valuation of projects you have completed for craft fairs or friends. You don’t have to be apologetic about the price of items, because you know the costs. 

A possible form might look like this:

 

 

Project information 

Name of project:

Date:                           Clients:  

                           Contact details:

 

Due date:

Project title and description (photo?)

 

 

 

 

Dimensions  2D                                        3D

       Opening:                                   height:

       Glazing:                                     width:

       Sight:                                        depth:

 

Number of pieces:

 

Materials required

Glass descriptions,         codes              quantities       costs

 

 

 

 

 

 

Copper foil - maker:       size               rolls               costs

 

 

Came – maker        dimensions     lengths                  costs

 

 

Lead light cement – type, recipe, amount,                   costs

 

Solder – Maker        composition           length/rolls     costs

 

Adhesives – maker     amount                                  costs

 

Miscellaneous materials – description     quantity         costs 

 

 

Summary of Costs of Materials                      _______

Processes

The starting and finishing time, including any attention to equipment should be recorded for each working session.  The actual hours and minutes can be added up later.  You can simply record the times for each project regardless of process, e.g.:

__:__  to __:__;  __:__  to __:__;  __:__  to __:__;

__:__  to __:__;  __:__  to __:__;  __:__  to __:__;

__:__  to __:__;  __:__  to __:__;  __:__  to __:__;

 

Or you can record by process, e.g.

Cutting and fitting glass:   times , e.g.

__:__  to __:__;  __:__  to __:__;  __:__  to __:__; etc. 

 

Leading - times

__:__  to __:__;  __:__  to __:__;  __:__  to __:__; etc. 

 

Foiling -times

__:__  to __:__;  __:__  to __:__;  __:__  to __:__; etc. 

 

Finishing – times

__:__  to __:__;  __:__  to __:__;  __:__  to __:__; etc.  

 

Summary of time:                                   ___:__ 

 

You will, of course, develop your own form of recording your project materials, costs and time used for the project.  But it is important to keep some record of what amount of effort and cost has gone into each project.  Over time, things seem easier and less costly than they actually did.  A record of the project reminds you of the actual matters.

Wednesday 23 February 2022

Fused Glass Project Sheet




Why is a project record sheet useful?

Some kind of record helps to set down the client and maker agreements, estimate quantities, determine prices, review past practices for successes and record possible changes for the future.  

Even if you do not have clients, comparing the record sheets over a period can give you information on how quickly you work, the amount of glass you use in relation to size and complexity, information for costing, etc. It can give you confidence in stating - and sticking to - your prices.

These purposes are clearly different from a kiln log or firing record.  This is much more for assessment of elements for costing and pricing.  You can, of course, include this with your firing log or vice versa.

What should be included?

Desirable elements include the following.  You may have others to add according to your individual practices.  

Initial project information
·        Project description - including dated sketch or photo or reference to the cartoon.
·        Intended location – autonomous, primary glazing, encapsulated, attached, etc.
·        Dimensions for both two- and three-dimensional projects.
·        Delivery date. This may be an estimated or firm date.
·        Price or estimate – indicate which.

Materials and Equipment
·        Glass types and codes that you will (or have) used, in case additional glass is required.
·        Amount and cost of glass used during completion. This is not simply the amount used, but also the amount you did, or would require to, buy to complete the project.  
·        Glass separators – kiln wash, fibre paper, etc., including their cost.
·        Kiln use. The number and amount for each firing of the kiln should be added to account for maintenance, supplies, and depreciation.
·        Mould use.  A notional figure should be added for each use of a mould similar to the use of the kiln.
·        Miscellaneous materials including their costs.


Time
The time used to complete the project should be noted as you go along.  It can be divided into various process – such as cutting, firing, cold working, cleaning – or as a simple cumulative amount of time on the whole project.

Description of project results
A critique of the project including what might be done differently, the successes, the discoveries, should be written up at the end of the project.


What does all this record keeping provide me?
Recording this kind of information provides a record of how various projects went, how you met any difficulties, what the successes were.  This is useful to look back on when similar projects arise.

This information is invaluable in assessing materials costs, and time required for various styles and complexity of projects.  It enables a quick and assured way of estimating the costs of a project when a commission is requested.  It gives you assurance about your pricing and valuation of projects you have completed for craft fairs or friends. You don’t have to be apologetic about the price of items, because you know the costs.




A possible form might look like this:


Project information

Name of project:
Date:                           Clients:  
                           Contact details:


Due date:
Project title and description (photo?)




Dimensions  2D                           3D

Materials required
Glass descriptions:       
codes              quantities            costs






Miscellaneous materials:  
description        quantity             costs




Kiln firings:     #                           costs


Mould use:       #                           costs



Summary of Costs:                                 ____.__


Processes
The starting and finishing time, including any attention to equipment should be recorded for each working session on the project.  The actual hours and minutes can be added up later.  You can simply record the times for each project regardless of process, e.g.:
__:__  to __:__;  __:__  to __:__;  __:__  to __:__;
__:__  to __:__;  __:__  to __:__;  __:__  to __:__;
__:__  to __:__;  __:__  to __:__;  __:__  to __:__;

Or you can record by process, e.g.
Cutting and fitting glass.  
__:__  to __:__;  __:__  to __:__;  __:__  to __:__; etc.


Kiln preparation
__:__  to __:__;  __:__  to __:__;  __:__  to __:__; etc.


Cold working
__:__  to __:__;  __:__  to __:__;  __:__  to __:__; etc.


Summary of time:                                   __:__
Hourly rate * time = your pay
Your pay + costs = base cost * contingency % +profit = price


You will, of course, develop your own form of recording for your project materials, costs and time used.  But it is important to keep some record of what amount of effort and cost has gone into each project.  With the passage of time, things seem easier and less costly than they did at the time.  A record of the project reminds you of the actual costs, difficulties, processes and time.


Wednesday 10 March 2021

Craft and Wholesale Pricing

Craft fair pricing 
Image credit: craftprofessional.com

An important element to be considered in setting prices for pieces at a craft fair that are also consigned to a shop, is that the price the shop is selling your item at, is also the price you should be asking at craft fairs.  Without doing this you risk losing the consignment arrangement with shops and stores.

Also remember that when attending craft fairs or pop up shops, you are doing the setup, travel, marketing, sales, etc., that the shop is doing in a commission arrangement. That cost needs to be reflected in your price for the item at a craft fair, even if different work is being offered.  Especially if the craft fair is in the region of any of the shops or galleries you have placed similar items, you need to be fair to the shops in your pricing to be able to continue supplying them.  The same principle should apply to your online sales.

Some people solve this problem by having a craft fair range and a consignment range.  The craft fair items can be offered at a slightly lower price, if you must. But remember to factor in the costs of craft fair and pop-up shops even when pricing craft fair lines.

Wholesale pricing

Image credit: erplain.com 

Also note that your price on consignment needs to be high enough that you can take wholesale orders without losing money.  Wholesale orders are where the buyer pays you for the work in advance or upon delivery without taking a commission. They normally expect to buy at a lower than commission price and multiples of the work you are offering.

Maybe you feel you do not want to do wholesale work.  Stop a moment to consider that instinctive reaction. Wholesale means you have made the sale already without having to wait for the ultimate sale to occur, as you would on consignment. You do not have the administration of keeping track of stock in various galleries. You have certain, and almost immediate income. All these things make wholesale attractive.

It is the expectation that the wholesale price will be half or less of the retail price.  To make the piece affordable to the wholesaler and for you to still make a profit, you need to add something to the consignment price to enable the items to be sold by the wholesaler and the consignee at similar prices. This is most often less than the full difference between wholesale and consignment prices because you receive the money up front.  Cash can mean quite a lot.  You also need to have enough cushion to be able to give a discount on orders for multiples of the piece.  And that means you need to set the minimum order number to get that discount.

The bottom line (as they say in accountancy circles) is that you need to set the wholesale price first and then work back to the consignment price and retail price.

The wholesale price should be about 10% above the absolute minimum price where you can make the desired profit.  This enables you to offer that amount of discount for orders of multiples of your work.  This then implies the retail price is twice the wholesale plus taxes.  The consignment price will be about 70% to 60% of the retail price (based on 30%-40% commission levels).  More realistically, you can visualise the consignment price to be 10% to 20% higher than the wholesale price, leaving the shop to add their percentage on top of your price.


Image credit: seobook.com

Selection of a gallery or shop in which to place your work is a complex interaction of commission levels; the value you place on your time in preparing for and attending craft fairs or putting your work online; the perceived prestige of the shop/gallery; the potential relationship between you and the outlet; and the relationship of the consignment, wholesale and retail prices.

Sunday 9 February 2020

Pricing, 1 - Establishing the Cost

Pricing your work is necessary to get a fair return for your effort and to make an income.

Establishing the Cost


The first step is to calculate the amount it costs to run your business. Prepare a summary of annual outgoings including:

  • Studio/workspace (or as a proportion of the house that you use for a home studio)
  • Administration costs
  • Equipment & loans
  • Packaging
  • Marketing materials
  • Advertising
  • Incidental expenses
  • Income tax & social security payments
  • Insurance for public liability, materials, equipment, and employment
  • Depreciation (cost to replace things you are reliant on). The amount or proportion varies according to jurisdiction.
You will need to make some guesses about the amounts and that is OK. The value you put on some of the things above may be “zero”, but still need to be considered. All these are considered to be the overheads of your activity.


2. Step two is to calculate the time available to make your work over a year. If you are full time, start with 365 days and then subtract the weekends (104), holidays (say 10), administration time, and allow a contingency for sickness, etc.(say 10). That leaves you 241 days, less the administration time.  When you first start in business you are likely to spend 40% of your time on administration, but you should get more efficient and this time will reduce to around 30%.  So, even when fully up and running you will have about 169 days out of the 365 to spend on producing work - at best.  This means that you will have about 46% of the available time spent on production.


If you are working part time you need to do the calculations on the basis of the number of days you have available and do the subtractions and calculations as for a full time basis.  You may find your overheads are proportionally higher than fulll time, as these costs continue accrue whether you are in the studio or not.

Then do the calculation:


Overheads & personal salary (you do want to pay yourself - I insist!) divided by days available to work.


This enables you to fix a price for your time and gives you a daily rate from which you can calculate an hourly rate.



3. Step three is to estimate how long it takes you to do anything - preparation time, research, selling, marketing, packaging etc.


Add together the cost of materials and charge for the time it takes to make the item at the hourly rate you have calculated. This enables you to calculate a price for the item. Then look at how much the market will pay for your type of work.


Even if you know the market will not stand the full price, you should still do the calculations to find out the price that you should be trying to achieve.  If the price is unrealistic, you need to look at simplifying the item, or to consider different items.


All these calculations need regular reviewing.



More information is available 
Establishing the costs
Creating a pricing structure
Terms and conditions of sales
Customer relations


Payment

Pricing, 2 - Pricing Structure

Creating a Pricing Structure

After calculating what you are going to charge, use the prices to create a pricing structure:

  • Selling price to the public - recommended retail price
  • Wholesale price/trade price
  • Sale or return price
  • Selling direct to the public

The selling price for the public should be the trade/wholesale price times two, plus tax. This means that the wholesale price is your bottom/lowest price that will give you a profit.


You should set your prices to realistically cover your costs, including time spent at an event, and know what you need to charge to make a profit. You charge double your wholesale price to cover your own costs of sales, such as packaging, stand hire, etc.


Do not undercut your other outlets, otherwise they will no longer want to sell your work.


Use selling to the public as an opportunity to test the market by exploring new products and new prices.



Selling to trade


The prices you offer to trade, i.e., your wholesale prices should cover your costs and provide some profit.


Galleries and shops have enormous overheads, which is why they put so much of a mark up on pieces, but remember they will be selling your work all of the time, so you can produce the work without interruption.


Before approaching wholesale or trade outlets you need to decide on:

  • Minimum order quantities.
  • Discount prices, and quantities to qualify.
  • How much of your work they will need to make a good display (it is in both of your interests to display your work as well as possible).
  • Consider charges for carriage or if you want to offer carriage free.
  • Agree what the payment terms are – pro forma, payment on delivery or credit. If offering credit, ask for trade references.

Sale or Return


If you provide work on consignment (sale or return), make sure you know exactly what the terms are. Keep a close eye on the pieces, as there are risks that may or may not be covered by the seller


You do not want your work out for too long, so if it is not selling after 6 months it is time to move it. That means keeping records of where your work is and when it was placed.



Review your prices annually.





More information is available 
Establishing the costs
Creating a pricing structure
Terms and conditions of sales
Customer relations


Payment

Pricing, 3 - Terms and Conditions

Terms & Conditions

It is important to draw up your terms and conditions for both trade customers and for the public. They should include:

  • Details of your minimum orders
  • Carriage/delivery - is it free or charged to the customer?
  • What is the recommended retail price? It is useful to include this, as you will often be asked to provide a figure by shops.
  • Any conditions about display or point of sale material (if you provide any)
  • Credit terms
  • What deposit is necessary - when a member of the public places an order always take a deposit or ask for full payment in advance.
  • Details of any interest charges that you will charge on any outstanding debts.
  • Once an order is placed, get the customer to sign it and make sure they are aware of the relevant terms and conditions.

More information is available 

Establishing the costs
Creating a pricing structure
Terms and conditions of sales
Customer relations

Payment

Pricing, 4 - Customer Relations

Good Customer Relations

It is vitally important to keep a customer database and to develop good communication channels with your customers.  It may be that they will not be repeat customers, but they will surely tell others about your good service and excellent quality craft.  Get at least email details of every customer and potential customer wherever you go.


Always remember that trade customers need you as much as you need them, so keep them in touch with news.


It is also advisable, to make sure you allow enough time to deliver orders. It is better to say it will be two weeks and deliver early than the reverse. If you do fall behind, keep in touch with customers and let them know what is happening with their order. Also, remember it is acceptable to have a waiting list if necessary, as part of what the customer is buying is the exclusivity of your work. Always remember who or what else you may be reliant on, e.g., the weather, supply times, length of time for shipping, etc..


If you are contacting new outlets or customers do no more than 10 at a time so you can control or monitor the process. If someone says no to your work ask why, as it is important to know for your future business.


If you are supplying, or want to supply, to different outlets in the same area negotiate with them. Consider customising work for different shops or gallelries or offering them different parts of a range.

Be consistent and professional in the way you manage your relationships with customers.


Listen to customer feedback and develop ways for customers to make suggestions, such as comment cards.  
Keep in touch with people who have bought your work before.


More information is available 
Establishing the costs
Creating a pricing structure
Terms and conditions of sales
Customer relations

Payment

Pricing, 5 - Getting Paid

Avoiding Payment Problems

It is necessary to have clear terms and conditions established at the time of purchase. If you have put your terms on your invoice, you can enforce the conditions and take the customer to court.


Always invoice promptly. This is important for your cash flow and reduces the chances of payment problems.


Always keep good records of orders and invoices so you know what is overdue and when to chase for payment. A simple accounting software package will assist.


Maintain good communication and be professional. When you contact someone about an outstanding debt, be polite. However, do not allow them to walk over you. Be firm in your request for payment. Ask them to suggest a time scale for payment – normally people are committed to their own suggestions. But do not accept unreasonably long payment schedules.



More information is available 

Establishing the costs
Creating a pricing structure
Terms and conditions of sales
Customer relations
Payment


Wednesday 12 June 2019

Why Sell Online?

"Why not? Everyone else is doing it."

The more interesting question and response is:
“Why do it at all? There are lots of other ways to sell.”

The first thing you need to help you decide whether online is for you, is a plan for selling.  You need to think about how you sell. Selling needs to part of whole strategy that can involve multiple ways and avenues of selling. The ways you sell your goods needs to be integrated into social media - whatever platforms you decide to use to sell.  One platform will not be enough.  You need to look at where the main effort will have most return.

Planning a selling strategy


Initially:

Even before you have a whole selling strategy worked out, you need to be using social media to promote your work.  A blog about you and your work is a good place to start.  It gives you a presence, a personality, a brand. Write regularly about your craft life.  Share it with your friends on Facebook, Twitter, etc., and ask them to share it with their friends to get it known.

Linking to and from that blog using Facebook, Pinterest, Twitter, and other social media platforms help to spread the knowledge of who you are and what you do. These are the things you need to do whether you decide to join an online marketplace, a stand-alone shop, or stay with physical sales points.


Making an online selling plan:

The first part of the planning is to decide why you are going to sell online, rather than stick with just bricks and mortar sales locations. These physical locations include galleries, museum shops, gift shops, craft fairs and exhibitions, etc. Some questions to ask yourself are:

  • What do you gain by interacting with shop owners and direct customers? 
  • What might you lose by going online?
  • How does online fit your products?
  • Will you need to put in more, or less, effort online rather than selling in physical locations – shops, craft fairs, etc.?
  • Where is your market located? Local? Dispersed?
  • Is your market a specialised or a general one?
  • Will your products stand up to delivery company handling?

The answers to these questions will help you decide if online will help sell your products.  It may of course throw up ambiguous answers – on one hand, on the other hand kind of answers.  This would indicate a mixed platform approach is desirable.
       
But, just a minute!

Don’t sign up to an online marketplace just yet.  There are some things you need to prepare before searching out the appropriate site or sites for your work.


Products:

Yes, you have a lot of different things you could sell. Think about where you want to concentrate your efforts.  A few key products will help to give your work an identity.  It will help you define, and so reach your customers.  It will focus your marketing and build your experience and reputation. 

Online enables you to concentrate on niche marketing more successfully than bricks and mortar can.  It is one of the main advantages of online selling. Once you have identified your products and therefore your market, communicate with them.  Think about their interests, needs and desires as you write.

Work on describing a strong identity – often called a brand. This should be accomplished in a short sentence. Know who and what you are. Tell your values, your story to the world. But especially to your potential customers.  Follow this description up and re-enforce it with photos and descriptions in all areas of social media. This will then be a style to carry over to the online shop, if you decide to set one up. And even if you don’t it will improve your selling at physical locations.


Prepare product titles and descriptions:

Clear titles and descriptions are needed for each item. These should be direct using simple language making it possible for the viewer to understand immediately what is in front of them. These titles and descriptions should include specific words - terms, tags, keywords - that the prospective buyers might use to search for your products.  You should include lots of tags for the photos and descriptions, but they must be relevant.

Include all the detailed information – size, colour, materials, price, delivery mechanisms and costs, projected arrival time, etc. – in the description, but toward the end when they have probably already almost made up their mind. 


Excellent photos are required.

The main descriptive element when the buyer gets to your page or listing is the pictures.  They must be descriptive of all the elements of the piece – several images per item is a good idea.  Consider a professional photographer to make these images.  They have an independent eye and can see things from the buyers’ viewpoint.  In addition, they can take better pictures.

Share these descriptions and images on social media.  This all needs be done before you join a marketplace website.  It helps to test your abilities to present your products successfully before you commit to online.  It will help you in your presentations of your work where ever you place it.


Costing and pricing:

Of course, there is the boring bit – deciding on the price.
These include factual elements:
Costs of production - materials and time, overheads, administration of the materials buying and the object’s selling processes.
Applying this cost information to each item will give you your break-even price.
You then need to consider what profit you want to make for your effort. This might be done as a margin on each piece, or as a part of your desired annual income.
The break-even plus the income or profit factor will give you the wholesale price.  The retail price is at least twice the wholesale.
Will the market bear that price?  Compare similar products and test your pricing with potential customers. If your price is too high, return to the design of the item and consider how it could be simplified. Alternatively, consider how it could be enhanced to achieve an even higher price for little more effort.
If your product is the kind where purchase of multiples is possible or likely, give yourself enough margin so that you can offer discounts for quantity purchases.
Also think about whether yours is a luxury product. If it is, the price needs to be higher than for general work.  E.g., if your jewellery is set in silver, it needs an extra margin for the luxury element of the item.
Cost of delivery – packaging, time, delivery charges. You need to decide if you are you including this in the price, or is it separate?  This will need to be reflected in the price, or the cost of delivery must be stated in the description.


Benefits

This process of preparing for online selling will benefit your selling, even if you decide against online selling.  It will clarify your offering to the potential customers.  It will help to define you as a producer and develop the awareness of your products. It will assist the customer to understand your story and your work, so encouraging them to buy.

A discussion of choices about choosing a website is here.