On Pricing Your Work.

[Ken Hurst]

I am in total agreement with James ----- if you use a stop watch, you'll be amased at how few actual working hours you get at the bench. It will scare you into using a stop watch in order to see where you can save a few minutes.

 

[Tim Wells]

I do a little hand engraving for a local jewelry store. A customer had brought in an old pocket watch that she wanted polished and the movement fixed. The sales person was asking the owner what to do as the watch had been sent to a watch repairman they use who said the spring it needed was obsolete and could not be fixed.

I just happened to be standing there and offered to repair it or at least have a go at it, the owner didn't know or had forgotten that I did that type of work and was glad that I did and so handed me his personal watch as well.

I went home and took it apart and called my supply house and ordered the spring. I went in today to pick up something and was asked what the repair would cost and I gave her my wholesale price so she could call the owner of the watch for approval. Before she called she said that my price seemed a little steep to her since they have to keystone the price. I made an age old mistake of lowering the price a little to help the situation.

I wanted to do the job because of the piece and its condition, meaning no restoration needed, just a normal overhaul. For 118 years old this thing was like new. Under any other condition I wouldn't have changed my price and frankly will never again as that is poor practice.

Why is this a bad idea to get in the habit of? For one, as Scott mentioned, the customer is paying for what you know. The tools and time it takes to learn to properly repair or restore a timepiece is inordinate and needs to be valued.

The second reason is that if you are doing it for a living you won't be in business long doing things like that. After all I shouldn't have had any sympathy as they don't have to double the price especially on something like that where I am basically doing them a favor by providing a service to help their customer.

However, by doing this, this one time it may pay off over time by drumming up work for me either engraving or watch repair... I prefer engraving.

In the end, there is a market and we serve it. That market will bear whatever it will in a given region for the respective type of work you're doing be it engraving, watchmaking, or horse shoeing. What the market will bear for engraving something on a locket or a ring for example is something that time and experience will tell you or another experienced person that will share that info.

The market bears for a given item, say a monogram on something flat like a signet ring, locket, money clip, etc, whatever it will and it doesn't matter how long it took you to do it. Dollars per hour is a convenient benchmark and it will grow as a function of your efficiency with adaquate work volume and nothing else. So what I mean to say is, if you are after fifty bucks an hour and you design then cut a unique monogram and it takes you 2 hours and all it will bring is fifty bucks then you had better learn to cut faster to attain your desired rate.

For instance, I charge more for old English, Blackstone type lettering than I do script because it takes longer to cut. However, you still have to price it in my case anyway to where the jeweler can then keystone it and not be out of range for the market.

Lettering is one of the things I timed with a stop watch early on by taking a name or word and cutting it in different letter styles to see what the time differences were. Cut your name in script then do it again in Floral script and you'll see what I mean.

 

[Andrew Biggs]

Hi Tim

This is how you set your price for the work you do and it doesn't matter how long it took to do it. Dollars per hour is a convenient benchmark and it will grow as a function of your efficiency with adaquate work volume and nothing else.

I would respectfully disagree with you there. That is probabley the sureest way to not make money or a decent living and work 24/7 for little or no finacial reward. Dollars per hour works very well for all custom work including engraving....................it is essential to have a pricing structure based on your time otherwise the market will always dictate that you work at slave labour rates.

Cheers
Andrew

 

[Brian Hochstrat]

Andrew, Not 100% sure what you are saying, but it sounds like you are saying charge by the hour. The customer will not know the final price until you are done. If that is what you are saying, it will not work in the field I am in. A customer wants to know what the cost is, before we get started, so he can make a decision on wether he wants to have the job done or not or up or down size the job. You tell them you get an hourly rate, they will chuckle and hang up, cause that is not how the game works. It may be the way to go on say the jewelry end and it would be nice if it would work on the knives, but no such luck, the game is already set up and if you want to be in, then you play it the way it is set. And it is a game, a serious one, but still a game. Brian

 

[Andrew Biggs]

Hi Brian

What I'm getting at is working out your hourly rate properley for your own pricing purposes.....not telling the customers what it is.......say for the point of discussion it takes $50 per hour to give yourself a good income and pay the overheads etc.

Once that is established, then price your work from there.

So if someone gives you a knife and wants it engraved with whatever the engraving is to be.........then once you've worked out how long it will take and all the other factors.........say 100 hours.

So you would tell the customer the final price, or a price range, which would be $50 X 100 hours = $5000. Or the range may be from $4,500 to $5,500 depending on all the factors in the job.

I agree with you. Telling a customer that you work for $50 an hour is meaningless as they want to know what the end price is to see if it is in their budget or if it can be modified so that you both come to a satisfactory arrangment with your time and their expectations.

Of course there is always the flexibility angle as well that sometimes dropping it slighly will get you the job........or upping it slightly because of the "hassle" factor. Any pricing structure has to be a bit flexible.

But my only point is that you need to know what your hourly rate is first as it is the basis for all your charging. There's no point in doing the knife for $1000 using up hundred hours of your time.....because you'll starve to death. Likewise there is no point in charging $20,000 for a hundred hours of your time because you won't get the job..........and you'll starve to death

Cheers
Andrew

 

[dbrodhagen]

Andrew, what you stated makes very good sense. I have had several marketing classes and small business classes that refer to the same principles, it is important to know what your overhead is by the hour (electricity, lighting, space, recooping costs of tools,
etc.) plus materials used for the project and usually a 20 percent markup with that, along with your established hourly costs (now this would be where it comes down to your expertise). For me, being a new engraver, I would charge exactly the same as a master when it come to overhead and materials, but would charge at the level of my expertise for my hourly rate. The hourly rate is something that is your own guideline, the client would not normally be told what it is. The important point is to give your customer the closest estimate for your work to factor in each of the above and still make a profit for yourself. Thanks, Dave

 

[Andrew Biggs]

Hi Dave

You're onto it. You'd be very surprised at how many self employed people there are that don't understand those very basic principles.

Cheers
Andrew

 

[jlseymour]

Geller's Blue Book to Jewelry Repair & Design is the Best pricing guide for the jewelry trade...
There's a chapter on pricing for monograms and family crest...
Google Geller...
Jerry

 

[Sam]

I find that packaging and return shipping require as much or more of my time than the engraving. This is definitely something to consider when accepting small jobs.

 

[FANCYGUN]

When I quote a price i base my rate by the hour. Of course you can only estimate how long the engraving job will take. After a number of years you can come fairly close to what you assume the job will take. However what i tell my clients is that this IS AN ESTIMATE. The finished price can fluctuate plus or minus 25%. They all seem to be OK with this. I learned this from Frank Hendricks years ago

 

[leroytwohawks]

Andrew, I understand what David was saying, I haven't thought about it in years but I recall working in my dad's jewelery store and him telling me it cost him back then $37 a day just to keep the doors open that just covered the prorated rent, electric, water, and salary's per day I know there were many day's that amount was not made, thank God for the Christmas season.:big grin: I guess I'll be pulling out the stopwatch and doing some calculating.

Kevin

 

[Barry Lee Hands]

A lot of ways to skin a cat.
As to quotes,I quote precisely, in advance, based on over two thousand previously completed jobs listed in reciept books which I have kept from the start of my business.
I rarely take a deposit, unless the client prefers it, although I used to,but it got complicated.
If there is nothing similar, I usually refer it to some one else.
Today I never, ever exceed estimate, unless the client changes the specification.
In the rare case the client prefers to be billed hourly or weekly,without estimate, I bill for hours at the rate of $100 per hour.
Engraving classes are at $100 per hour.
This is what I base my estimates on. When I look very closely taking into account bookkeeping(done by accountant) Paying my PA's which come and go, shipping,errands etc, travel related to engraving,and see the final statements from my accountant at the end of the year it averages down to about $50 per hour.
My work schedule when in the studio averages 60 hours a week, I compensate for the stress by taking frequent extended vacations.
At one time I had a timeclock, and would punch jobs in and out, this was very useful and I would recommend any beginner to invest in a timeclock.

 

[Ron Smith]

One of the things that makes pricing so difficult is that you are doing an 18th century labor where everyone did things with their hands, in a 20th century economy where no one can come close to relating to it.

Finding enough people who will pay your price isn't easy, so I conclude that unless you are engraving for the collectors, it is best to do simple jobs that will earn you more money for less time. They are easier to quote too. Work on the masterpieces if you got time, and expect to lose on them until your name becomes a houshold word. LoL

knowing what to charge is never easy with engraving, because every item is a hand wrought item, a one at a time thing, and you have to have enough experience to be able to esitmate time accurately. It still isn't easy after that, and you will misquote often.

That is just one of the traps of doing hand work. Making a living at engraving wasn't easy and it is not a whole lot dfferent today, except for the fact that we ( Engravers of my generation) have been doing everything possible to educate the public. It is begining to pay off. I am amazed at what you can get for engraving today if you are fast and effecient. Educate, educate, educate.

Sam was correct.

All of us older engravers can relate to what he said.

All of the efforts past engravers put into this didn't help them much, but the new generations are able to do pretty well I think. It has taken the public a while to catch up. If you guys continue to carry the ball, the next generation of engravers will probably benifit, but that is okay. It is about time someone does.

If you can get it, charge it, and more power to you.

That is my two cents on the subject.

Rock on!

Ron S

 

[Arnaud Van Tilburgh]

Andrew, sure this is an interesting tread, the reactions on it speaks for itself.

I agree with you price/hour calculation. But I must confess that I didn’t use it for 25 years. Instead I used a price/ job and it didn’t make much sense.

As far as I studied your way pricing a job, I have some remarks on it.
As “all people are equal” an comfortable way of living should be the same for al of us.
I the old days, there was a guild for every skill. And I suppose the time /our was dominated by the guild.
Not a bad system I think.
But the world is more complicated now these days.
So sometimes I cheat on the times an our. My way is to make things that look complicated but who are not. That is in my way the best way to make a good living. But it is only satisfying because of the money to make a living.
So sometimes I do jobs that only pays half or less than my time/our just because I sometimes need to make something nice.

Now these days the world has become a bit smaller because of the internet etc.

So I think your idea of pricing sure is correct if all prices and work conditions are the same all over the world.
And they are not.
For instance, the price of a bread in Belgium is 2 euro, if I cross the border to the Netherlands, (16KM) I can buy a bread for less than half. Even Belgium source water (Spa) only cost half the price in the Netherlands than in Belgium.

On top of it, in Europe there is a law that prevents making prices equal. In the old days a guild could make an appointment saying that job is paid that much.

And another thing that is not in your calculations, is the skill one has.
Still I agree with your way of pricing a job, but I think it only works when it is used by us all over the world.
And a guild could take care of that, and that was done some centuries ago…but could it still work?

I could make a office excel page having your calculations in it, but perhaps you have already made one. Or perhaps someone else.
It would be a lot easyer to calculate as probably everyone reading this topic will try to calculate his price/hour?

Even my price/hour, that is 50 euro/hour. I didn’t calculate it the proper way like you are explaining, I can’t use it for all jobs I’m doing as they bare not all engraving.

I know, this is a hard tread to figure out, and I can go on writing about it, but a bit difficult for me in English . To much text and no one reads it


arnaud

 

[Kevin P.]

"I know of a couple examples of engravers who took a quicker route and who got top dollar in the beginning for their work (collectors took a chance on them), but it was a short lived career, once the knives would'nt sell for what the collectors had in them, that was the end of it."

Brian, in my field that's called wholesale. I say that from a certain perspective: I do 'art fairs' meaning I'm selling retail only and I go to where the money is. I design, make, and sell my own work. The idea of selling something and promoting it as something that will appreciate in value seems to me a mistake. I tell people, potential customers, "if you don't love it don't buy it". If you sell to collectors it seems to me a commodity market, like pork bellys.
Kevin P.

 

[Andrew Biggs]

Hi Arnaud

I understand what you are saying. And yes, we all take on jobs because they are interesting and not always the most financially rewarding.

But................

The formula and article that I posted that you can download is catering for each individual no matter where you live in the world. So all you have to do is work out the math.............fill out the form and do the calculations, then you come up with an end result.

Everyone's calculations will be different. Overheads will vary considerabley, productivity, skill level, work flow, client base, market they are in, cost of living and all the rest of it will change with each individual. It dosn't matter if you use dollars, euros or pounds in the calculations.

At the end of it one person may need to charge $50 per hour and someone else may need to charge $60 and hour.....or someone else may only need to charge $30........or whatever. It gives you the guidline of exactly how much you need to charge for your services otherwise how do you know if you are making any money or not.

The major problem is that most people simply do not want to do the math and then wonder why they have little or no money every year. Every person that is self employed deserves to have a decent, livable wage (and more if you can) that also gets them ahead in life. The formula that I posted shows you how much you should be charging for your time to get exactley that.

Give it a try, all my calculations are only examples of how the formula works. Your end figure will be different from the example I gave. Take your time with it and get your figures as accurate as possible. You may be quite surprised at the result

More importantley, if you look at the final figure and start adjusting your prices accordingly...........then you may find that your standard of living may improve.....................give it a go, you have nothing to lose by it.

Cheers
Andrew

 

[Kevin P.]

Andrew, you're exactly right on the price/hour thing. The back stage stuff should never be discussed with a customer. We do hand work, beautiful hand work. Don't explain the magic.
Selling work is the most difficult part of what we do. We should all be selling retail. The person who buys your work is buying part of you and wants to meet the person who did the work. In another sense they are buying because of who you are.

It amazes me when "what the work is worth" is mentioned. Is there a 'god' of handwork' who makes these determinations? The work is worth what someone is willing to pay. It's an auction market.

I'm preparing to do a show in SoCal. I do a lot of pieces that I've never done before, sometimes called 'one-offs'. Pricing is the hardest part of what I do. I do have some years of experience but still it's like pricing my own worth and how good am I feeling the day I price. There are no 'comps' if the piece of work has never been seen before.

Like Barry, if I understand him correctly, I don't do custom work. Unless a person who is already a customer asks me for something special. They ask because they like what I do and offer minimal input. Sometimes adjustments need to be made and if I keep communication with the customer open and explain why a price needs to be adjusted, it's usually not a problem. When the price is a problem, I will "eat it" if necessary so as not to upset the relationship.
I've drifted a bit from 'pricing your work' into 'selling your work'.

If you sell your own work don't sell it as yourself; assume a personna: present yourself as the gifted artist you are. And above all be professional and your word is your bond. Treat everyone who approaches you with respect.
Kevin P.

P.S. I say this not knowing, with the exception of a few, who the pros are here. Many of you already know.
What I've said comes from over twenty years of earning my living doing what I do.

 

[Christopher Malouf]

And another thing that is not in your calculations, is the skill one has.
Still I agree with your way of pricing a job, but I think it only works when it is used by us all over the world.
And a guild could take care of that, and that was done some centuries ago…but could it still work?

"Skill" is always a variable unless you never improve. It can be a choice but it is human nature to be the best you can be. Any kind of "union" that sets prices or guidelines only promotes mediocrity. It helps those that can't help themselves and keeps the over-achievers from pursuing the ultimate.

In a short time, I've managed to price (and skill) myself out of my local market. As I get better, some things take longer to complete while others take less. When it comes to engraving, unless you're doing the same thing every day, efficiency becomes evident only some of time. That needs to be held in the balance of shooting for an average hourly rate. I say "average" because it is impossible to make a consistent $50 bucks an hour or even a $100 buck an hour. Narrowing down the margin of error is the goal and that comes PURELY from experience. Someday I may even get it close to right but "skill" being an ever changing variable as well as exhausting my local market in the process has thrown a big wrench into the works.

I either need to expand my marketing efforts or move out of the land of biscuits and gravy to where the money is. For the guy in the next county over that uses a Dremel to ruin guns at $350 bucks for almost full coverage, he'll always have local work on his bench. "Educating" the customer is a near impossibility in places like this especially when my neighbor has seen my work and how it's done and still thinks I'm some sort of an effete snob because I refuse to lower my prices below wholesale for the county's "high society" socialites. I always figured that by bettering my skills and being the best in the area, I could raise the bar ... instead, all I've done is repeatedly bang my head against it. When it comes down to it, "skill" is a variable that can work as much against you as it can for you. It's called being over-qualified in other industries and for your pricing to fairly reflect your skill, you're target market and customer base must evolve just as fast.

-------------

RonS ... as always, it is a delight to read and absorb your uplifting and positive posts. As a glass half empty kind of guy, I need all the help I can get in that area. I've sure settled down a lot and that's because I've realized that no matter how much one improves in such a short time, this is a life time endeavor as collectors are more more willing to take a chance on you when they see consistency in quality over a long period of time. Far different than any other career I've been into. I've experienced two types of collectors ... those with an abundance of excess cash that simply like what they see and those that know me and know I'm not going to quit anytime soon. I've buried a lot of anxiety along the way but the experience has been well worth it.

I'd like to expand a little on your comment: "Work on the masterpieces if you got time, and expect to lose on them until your name becomes a houshold word. LoL"

I was stubborn in the beginning believing that if I created a masterpiece then the big money would flow. You were right when you said once that "going out on limb" is the fastest way to get your name out there. I've taken on the attitude that when going "out on a limb" for a personal project, it is best to do it entirely for yourself. You need to be just as content putting it on the shelf or back in the gun rack when it is finished and if it sells, it sells. There is a buyer for everything and patience will bring about the right time and the place. So long as it is the right canvas and a quality job all around, it should appreciate just as well in my closet as it would in any other - assuming I keep on doing what I'm doing.

Chris

 

[Tim Wells]

Hi Tim



I would respectfully disagree with you there. That is probabley the sureest way to not make money or a decent living and work 24/7 for little or no finacial reward. Dollars per hour works very well for all custom work including engraving....................it is essential to have a pricing structure based on your time otherwise the market will always dictate that you work at slave labour rates.

Cheers
Andrew

Andrew, I re-read that and it was a little confusing the way I worded it to make my point. I fixed it now, see if that makes any more sense, if not or you still disagree please say so. I am not a business man and I learn a lot from folks like you and others who work for themselves.

Additionally, I don't engrave near as much as I should but I was starting to do one style of scroll covering a 2 inch plate and time that with a stop watch. That 4 square inches took X amount of time on average so my plan was to figure out what I want per hour then take that info and measure a reciever for instance and add up the square inches to have a good idea of what it would take to cover it in hours and plan to charge accordingly. I couldn't figure out another way of doing it with any accuracy with what little experience I have.

 

[richard hall]

Chris, you sure put things into perspective about the dremil fellow and how customers desires and how they perceive things. I can remember a buddy of mine in the 1970"s brought over a new shotgun for me to see, BOY, was he proud, it had impressed checkering and the frame had some sort of pressed game scenes on it, but, he was very happy with his investment, and he didnt like my negitive comments on his pride and joy. I dont beleive that education would have helped, he was purchasing with-in his payscale, and unless someone is a collector, its hard for an engraver of firearms to get by sometimes.. At least deer season is coming up and Christmas, and usually hunters dont mind spending funds then.. The economy hasnt helped in some areas around our coutry, maybe people need to get more creative, maybe doing a couples marriage license by engraving it in silver . If they will buy engraved horseshoes, then use your imagination to help get you by !! As far as education goes, the fellows that purchased the dremel guys work, will get the education of their lives when they attempt to RESELL it !!!!!!!!