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How to Price Your Product: Article or Project

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The other day, I replied to someone’s question regarding how to price bisque for resale. I received a return email wondering how I could charge that much unless I lived in a big city. I pondered this concern and decided this would be a great topic for CMEZ as we all want fair compensation for our efforts.

It does not matter if you are in the field as a hobby or as a professional. It does not matter if you have a home studio or a commercial outlet. It is imperative that you give competitive pricing but not at the risk of losing money or giving away your product, time or talent. The basic formula for pricing is just that, a basic formula. There is always room for some modification to meet particular situations. You do have to agree on one thing however; unless you are a philanthropist or extremely benevolent, you are selling your wares for a profit.

One thing worth mentioning, it is always easier to lower your prices to make a sale than to raise the prices when you see you are losing money, but to do that, you need a basic price, or beginning point. Customers love discounts and sales, but really hate price increases.

It does not matter if you live in a small town or a big city. When pricing your wares, it is important that you consider all costs and overhead into your pricing structure. Many amateurs and even some professionals forget about recovering their expenses. In pricing you should consider the following costs: Cost of mold and replacements, cost for shipping, cost for slip, cost for tools and casting equipment and their replacement or repair, cost for chemicals, cost for kiln and kiln maintenance and repair or replacement, cost for electricity, cost for storage/rent/mortgage, cost for waste removal, cost for utilities (heat, water, etc), cost for loss and errors, cost for other consumable supplies such as paints and brushes, costs for advertising, cost for loss, cost for help, and most importantly value of your time.

The following is a basic formula to figure your resale pricing (there are exceptions)

Greenware = 10-12% of mold costs ** See note below re exception
Firing = 50% of greenware price
Cleaning greenware = 50% of greenware price (and up)
Simple glazing= 150% of greenware (50% for paint, 50% for 2nd fire, 50% for time-be sure to include first fire, cleaning and greenware cost)
Finished Items = 4-10 times cost of greenware (and up- depending upon time and supply costs)

Let's put that formula into dollars and cents. Take a mold that costs $100. Greenware is $10. Cleaning is $5. Firing is $5. Simple glazing is $15 (glaze, time, 2nd fire). The item should sell for $35. Now, if you had put any detailing into the project, that should be included by upping the price. Adding decals again increases the selling price.

All pricing begins with the cost of the individual mold. I am referring to the RETAIL cost of the mold rather than what the mold cost you. Example: a mold retails for $79.95 but you found a used one for $10, or got a 30% discount. Regardless of what you paid for this specific mold, it will use the same amount of slip to cast it, it will take up the same amount of space on the shelf for storage or in the kiln for firing, and it will take just as much of your time. Therefore, for continuity, you base your pricing on the RETAIL cost, not the windfall pricing. Why? because if you have to replace it, you may not be so lucky as to find one on sale or even to find a replacement at all. And remember, when and if you do purchase a replacement, the manufacturer most likely has raised their prices.

The retail price should also include the cost of shipping if there were transportation costs incurred. That $79.95 mold cost you $23.50 in shipping costs, then that amount should be considered as the cost of the mold, or a total cost of $103.45

Industry-wide, greenware is priced at 10-12 percent of the mold cost. The above example would sell for $10.25 to $12.50 as greenware (Please note, I use and recommend rounding). In your pricing you may also want to consider the time it takes for adding attachments, difficulty of casting, rapidity of wear on detailing, cutting holes, etc.

Regarding basic attachments, I charge nothing additional; however if there are several attachments I sometimes add 25 cents for each one, especially if they are time consuming.

Regarding difficulty of casting, I’ve been known to sometimes double my pricing. There is occasionally that awful mold that you just can’t remove the casting from the mold without breaking, causing stress cracks, warping, require others to help, etc. Every time you cast your mold, you are shortening its life. Though with good care a mold can last longer, 40 castings are considered the life of a mold, especially highly detailed pieces (see article: How to cast a mold).

Regarding rapidity of wear on detailing, in addition to the difficulty aspect, highly detailed molds wear out faster than those with smoother detailing. Clear and concise details are quite important for many of the painting techniques and the casting looses its real value once these details wear away. These molds can require more frequent replacement to keep your customers happy.

Regarding cutting holes, etc., this is more of a service but these can take considerable amount of time. Simple punching of holes in a Christmas tree is inconsequential; however, cutting out windows in houses, or cutting out patterns and backgrounds or creating filigree patterns in wetware can take considerably more time. Sometimes there is an error, or slip of the knife and the piece breaks and needs to be recast. Instead of adding this cutting cost as the price of the greenware (increasing other aspects of the formula), I call it a surcharge so the customer does not have to pay further amounts on the fee for this service. I add about $1-3 depending upon the complexity and time involved.

One more note about greenware: You need to take into consideration inflation, especially when you have older molds that cannot be replaced because they are no longer available. Every few years, I evaluate these older molds and increase their cost by 3 to 5 percent to offset the rise in the related costs such as slip, overhead, etc.

Next in the pricing process is cleaning the greenware. Fifty percent may seem excessive for plain items like utility ware, but that balances out with those items that require greater amounts of time such as angels with feather wings, dragons, Christmas trees, etc. I have sometimes charged 100% of greenware just for the cleaning of highly detailed items. If you do a good job cleaning your ware – no trace of seams, re-incise details etc., it will pay off in the end with happy and repeat customers. If you do a slip-shod job, then you will never command the better prices. Of course there are exceptions, there are exceptions to every rule, but again, we are discussing basic fees. Exceptions will be discussed later in this article.

Firing, in most cases, is your best profit area, but that will depend entirely on the size of your kiln, how heavy you can load it and of course firing temperatures. You can load a kiln heavier with greenware than you can with glazes and the loading/unloading is less time intensive. One must always be aware of the unforeseen however, such as breakage, warping, contamination, meltdown, misfires, etc. Some shops, and home studios charge their customers for the first firing when they purchase the greenware. That is often to ensure they receive some profit and that the customer will return. There is considerable flexibility and exceptions to the formula which will be discussed in a moment.

Pricing finished ware is the most controversial of all. This should solely be determined by your skill and talent and time. In forty years of selling my wares, I have established my own personal pricing formula, but it all begins with the basic formula above. You can take two different ceramists working on the same piece and one will finish an item worth $5 and the other $50. Why? Their skill and talent will make the difference. An item covered with fired gold can be worthless if not done well.

I remember a craft show where I was selling a cherub for $15.00. Down the row, another lady was selling the very same cherub for $5. A customer saw mine and continued down the row and saw the other cherub. She came back to me and asked why mine was more and wanted to know if I would lower my price. I simply said that mine was worth the price I was charging, but I did not fault her for seeking the best deal, however she should compare quality, not just the price. She ultimately went for the price and purchased the one from the other seller. Later she came back to my booth and showed me what she purchased…wanting to compare it next to mine. The difference was as obvious as night and day. There were still seams, there was no tone quality to the flesh and the eyes…well the eyes were just black dots in a white dot. The person had painted the item flesh, wings white, white dot for eyes with a black dot pupil, pink mouth - very plain and flat. Needless to say, the lady was very disappointed with her purchase and asked me if I could ‘fix’ it for her. I assured her I could. She asked how much. I told her $25. Of course she sputtered, wanted to know why so much. I simply told her I had to undo what the other lady had done and basically start over – twice the work. She wound up purchasing mine for $15. I don’t know what she did with the other one, but I retained this person as a customer for several years and she never criticized my prices again.

I price my finished ware by how much time it takes me to complete it. I’ve gotten where I can look at an item and gauge quite close how long it will take. I under-value my time at $25 an hour. There are occasions I will charge more. I do quality work and I do fast work and though $25 may seem excessive to some, let me assure you that is not the case. I’ve never had an unhappy customer. Keep in mind that I do not charge for down time, only actual time working on the item. I do not charge for mistakes, if I mess up, I’m off the clock. If I am glazing a piece, I do not charge while the paint is drying, only the actual application. If each coat of glaze only takes 5 minutes to apply, then three coats is 15 min or ¼ of $25. That would be $6.25 plus the other costs – greenware, cleaning, firings, paints, etc. Try keeping charts when you are working, track actual time it takes you to finish an item. Determine what your time is worth to you.


Now for some of the promised exceptions to the basic formula and pricing:

Greenware - with your basic pricing, you can offer sales, you can give discounts to Senior citizens or special groups (i.e., 10%), quantity discounts for multiples of the same item, you can discount to other shops who purchase quantity (i.e., 30-40%) PLEASE don’t fall in the trap of discounting to competitors who only purchase one or two items occasionally, but only those who will purchase quantities over reasonable time. You can also set minimum quantities in order to get discounts. When you discount to a competitor, make sure the discount is reciprocal. Just remember – you need to sell ten items at full price to recover the cost of the mold, ten to twelve more if you plan on replacing it one day. That leaves 18 to cover your other costs and make a profit. If you care for your mold properly, you may have additional profit if you have the traffic, especially if you sell online and ship internationally.

Bisque – similarly as with greenware, you have flexibility to give discounting, however I recommend you NEVER give discounts greater than 25% off of your bisque pricing – per the basic formula, and then only for a special promotion or with a company who purchases sizable quantity for resale. When selling online, I tend to give about 10% discount on my bisque. Once someone with any experience has purchased bisque from me, they recognize the quality and usually come back for more.

IMPORTANT - Never try to compete with companies who secure their product from overseas, mass production. You will lose every time. Utility ware is available for pennies by mass marketers. If you cannot garner a decent price for these items, it is best to change your selection to items not so readily available or purchase the bisque yourself and resell it for a profit.

Firing – I often rented out my kilns. That means that I charged a flat kiln fee for the customer who brought in enough items to fill it or wanted to pay a kiln/load fee. Here you would need to determine the cost of firing one load and doubling it. I usually have the customer load their own items to save on my liability. However, I do give close supervision so there is no damage to my kiln or equipment.

I also give discounts for subsequent firings. I charge 40% for second firing (glazes) if the first firing was done by me and 25% for third firings (gold, luster, decals) and 15% if a fourth firing is needed.

Finished ware – I do on occasion give small discounts on finished items, perhaps 10%. I have sometimes computed discounts based upon greenware and bisque costs (as mentioned in the above exceptions) but NEVER discounted my time.

If you have a home studio, you have a bit more flexibility in your pricing as much of your overhead is less costly than a retail store, but don’t ignore there are fixed costs and make sure you do not sell at a loss.

Small towns actually have a more difficult time in making profit because they have a smaller customer base than a large city; therefore, prices should be held closer to standard with less discounting. If your customers don’t want to pay your prices, they will find it will ultimately cost them more if they have to travel to a big city or have the bisque shipped to them. Consider some kind of rewards system where after so many purchases or purchasing a specified retail amount over time they get a free piece of greenware (set value) or a bottle of paint (set value) or something similar. I had a little gift card, where every transaction was recorded and when they reached a total of $100 they got a $10 gift certificate.

Bottom line is give your customers good value for their money, quality and good service and they will pay the prices YOU set.

** Note: re Pricing your greenware. If you are casting ware in an area that has excessively higher than normal slip costs (way above national norm) you may need to increase your percentage by 2-4 percent (additional costs will be picked up in firing rate). This is something that people who have to pay cartage or ship in their slip long distances need to take into consideration; however, at the same time, not price yourself out of the market.

 

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