Getting the price right for your work...

[Root 66 Woodshop]

That's easy. Just ask Mercedes what they use for their vans.

I thought they'd started using brass

 

[Mr A P Davies]

Just to add my tuppence worth to an engaging thread.

I suspect that most the people you, (The OP) know, are the sort of folks who have welders and workshops, buy tools instead of designer cloths, collect odd bits of metal, because "it might be handy", and can generally make pretty much anything they need, or know someone who can, if it involves wood, metal or concrete.
It's certainly true for me, anyway.

When the biggest part of life is associating with those sorts of people, I sometimes find it a little difficult to recognise the fact that there are actually those about who simply cannot make things out of lumps of metal. They don't own welders and angle grinders and plasma cutters. If they did, some of them couldn't use them anyway.

There are, however, plenty of folk, who will spend what the likes of us would think of as a considerable sum of money, just because they like something. The price of it doesn't really matter, it's the feeling it gives them.

Been a few years ago now, but I used to regularly visit an architectural antiques place, selling various stone and concrete items, not all antique.
I used to go there once or twice a week for different stuff.
Often, someone would pull in with their higher price bracket car or 4wd, and just start grabbing thousands of pounds worth of stuff, just because they liked it.
Never even ask the price, just pay for it, chuck it in the boot, and go.

I think it's called "How the other half live", and they are not buying stuff based on it's life expectancy, practicality, and how much per year it will cost over it's life.
Some people buy on emotion, and they are the ones where the money is. The greater the emotion they attach to the goods, the more they will spend.
It takes a bit of getting ones head around, coming from a backround and mindset of judging things purely, or primarily, by their practical value.

Price it high, you an always bring it down a bit.
I'm consistently horrified and amused by what some of my customers pay for stuff, that I could make for buttons, and what they pay for stuff, just because the like it.

 

[Davek0974]

I'm beginning to see that now, it's just a matter of tapping into that market.

Thats a very big "just"

 

[Scott@KarmaContent]

Basically you need to open a shop in Notting Hill like this one

 

[MBE1]

Sell the sizzle, not the sausage.

 

[MOIC]

Sell the sizzle, not the sausage.

Absolutely!

 

[Davek0974]

Ok, been a relatively busy weekend which is good, had a couple of good orders and also designed and prototyped two new products

Back to marketing.

I have two outlets in mind to start with, one is a small up-market garden centre and the other is a quirky warehouse store that also has a coffee shop we use a lot, I think my stuff would fit perfectly in either of these.

What is the best / most likely successful way of approaching these, I have next to no experience here.

Email for an appointment/chat, cold-call and hope to find the boss is in, phone for an appointment/chat other.....

I would guess taking products in the car would be a sound idea or would they be expecting to see printed literature, large photo prints, a simple presentation?

Dress - smart workwear, smart casual or suit?

Methods to discuss - commission sale, product line at trade cost, other??

This is a minefield

Also, with my "enhanced" pricing, do i leave these items off of places like eBay, Amazon etc or just list at the higher price even if it probably would not sell????

 

[Carl Mintern]

Few things regarding garden centres, in no particular order.

- Find out the managers name before turning up, by website or whatever. Ask for them by name, and try and act as if they are expecting you.
- If they are not there, do not say why you are there or leave a card, just say you'll come back, and then do.
- Never take a no from anyone without the power to say yes.
- Dress smartly, but I don't think it makes a big difference after that.
- You should start with independent local stores. Large multi branched organisations are harder to get to the person you want.
- Take at least one great product, and deck your boot out like a display stand.
- Know what you want, try and know what they want (what story is this branch telling its customers), and tell them why you both want the same thing.

Exciting times.

(You really need to get yourself booked into the upmarket country fairs, that is exactly where you need to be next year)

 

[Davek0974]

Ok, thanks,

What sort of deal might buyers be looking for?
I guess there is a trade price, in the day job this seems to be anywhere from 30-50% RRP.
What about sale on commission, what sort of deal might buyers be looking for there?

Just trying to go in with a background so I don't get ripped to shreds

 

[MBE1]

I would imagine garden centres etc would expect a min 2-2.5 multiplier, so sell at £100 cost price would have to be £50 less VAT , possibly £40.

Commission only is harder to say, but they have the potential clients, the foot fall and they know what they expect as a return per square foot, if one of your baskets was £399 retail I would imagine they would be looking for similar cover to the above, on a sale or return basis.

 

[Davek0974]

Hmm, I can't see how I can go any more than 25-30% for a 'trade' price, if I did then I would be right back at square one in this thread and working for practically nothing it seems.

I'm not sure what that means, price still too low? Direct selling only?

Getting a little confused

 

[Root 66 Woodshop]

The price that you've suggested should be the trade price (wack it up to £299 - offering them to sell out for £699 - this would give the garden centre some movement in the price if they wanted to sell cheaper than that... it would be there choice to be fair...

Not sure if you remember this post Dave...

Going off your previous post about your new "sale price" being £374 Dave...

If you put a RRP on your fire pit at the £699 which is still within reason and half the cost of the jungle style fire pits we were looking at earlier - I'd say that you've got enough mark up and enough for them to be thinking about their profit.

 

[Davek0974]

Thanks

Or is it sufficient to tell them "I can supply these to you for (say) £350ea" and then let them charge what they see fit to the customer????

I can see this being an issue if say they then market them at £550 and I also market at a figure lower than that as I would be undercutting them. In this scenario, would I look to be NOT selling them myself??

This whole area of marketing is very new and mildly scary I must say

 

[MOIC]

If you are limited to what you can produce, try to target the end customer.

Only when you start to accumulate stock, should you then offer your products out to retailers..

Contact interior designers with your products as a start.

Book a stand at Grand Designs.

Good luck.

 

[Faevilangel]

my thoughts are:

- £25ph is too cheap, my accountant kicked my ass daily until I realised I had to charge at least double

- Selling an off the shelf product vs a custom product means 2 different markets so 2 different pricing points. Make the "low cost" stuff for £25ph to make them price competitive, the custom stuff charge at £50ph.

- Your stuff is amazing and you have loads of experience with this stuff, people are willing to pay for quality product by a quality "engineer". I actually get 3x the amount of work @ £50ph than I did @ £25ph.

- Find ways to show off your products, my town has a "town hall" which holds markets each day, ranging from fashion to ornaments and crafts. Sell your stuff where the buyers are, your market online (imho) is limited. A client of mine sells £10k through her site per year but £50k+ at craft markets, because the buyers get to ask her questions and show her knowledge.

- Don't try and base on costs, make sure you cover the costs but price based on factors such as type of work, the client etc. People expect to pay a premium depending on the type of work they want done.

- Your fire pits should be £600 minimum........... there are loads out there in the cheap, mass built market but less in the custom built market. Price to be exclusive.... Do not try and sell cheap to get the sale as it cheapens your product. I would rather sell 10 at £600 than 30 at £200.

 

[MOIC]

- Your fire pits should be £600 minimum........... there are loads out there in the cheap, mass built market but less in the custom built market. Price to be exclusive.... Do not try and sell cheap to get the sale as it cheapens your product. I would rather sell 10 at £600 than 30 at £200.

This!

 

[Davek0974]

my thoughts are:

- £25ph is too cheap, my accountant kicked my ass daily until I realised I had to charge at least double

- Selling an off the shelf product vs a custom product means 2 different markets so 2 different pricing points. Make the "low cost" stuff for £25ph to make them price competitive, the custom stuff charge at £50ph.

- Your stuff is amazing and you have loads of experience with this stuff, people are willing to pay for quality product by a quality "engineer". I actually get 3x the amount of work @ £50ph than I did @ £25ph.

- Find ways to show off your products, my town has a "town hall" which holds markets each day, ranging from fashion to ornaments and crafts. Sell your stuff where the buyers are, your market online (imho) is limited. A client of mine sells £10k through her site per year but £50k+ at craft markets, because the buyers get to ask her questions and show her knowledge.

- Don't try and base on costs, make sure you cover the costs but price based on factors such as type of work, the client etc. People expect to pay a premium depending on the type of work they want done.

- Your fire pits should be £600 minimum........... there are loads out there in the cheap, mass built market but less in the custom built market. Price to be exclusive.... Do not try and sell cheap to get the sale as it cheapens your product. I would rather sell 10 at £600 than 30 at £200.

Yes I have now changed to £50/hr as a base rate, that was where my 'enhanced' price came from, seems I now need to add a market fudge-factor in as well

I would rather sell 10 at £600 than 30 at £200.

But what if you might sell 3 at £200 and none at £600 ??

I can fully see the benefit in your last statement but just struggling to get to grips with the whole marketing thing. What I think I need is a way to showcase the items but not have to make and take loads of stock that might never sell. Your Town Hall idea seems good, not sure if any round our area do that but will look into it. We do have farmers markets and the town does have a weekly street market.

I am 99% certain that the general on-line marketplaces (eBay, Amazon) are not the right arena for this stuff, IMHO eBay is still viewed as a bargain basement and Amazon just does not seem to get any response. Etsy is very very slow on views and zero sales, NotOnTheHighStreet turned me down, apparently my products do not meet their criteria!

 

[Faevilangel]

Amazon and eBay are definitely not the place for your fire pits, they are niche and need to be seen to be bought (imho) due to the size and the amount of detail.

Most towns should have craft markets / fairs, there are absolutely tons of them around here.

If they won't sell at £600 then the issue isn't the product but who is seeing them. You need to work out who will buy a £600+ fire pit and then find out where they buy them from, then get into them places.

 

[Anna Schimmel]

The very moment I read that, alarm bells, claxons and all kinds of other warning sounds went off in my head!

Mild profile steel costs about £1 a kilo wholesale. The specific weight of steel is eight, so a litre of steel should cost £8 plus VAT. All profile steel is supplied in 6m lengths, so a 10mm by 10mm rod should cost £6 bulk wholesale and maybe as much as £9 retail.

Let us now take a garden gate that is 1m by 1m and is made of 10mm by 10mm rods and 5mm by 20mm top and bottom. If the rods are spaced every 10cm, that is 13 1m lengths or 1.3 litres, i.e. 10.4 kilos at £10.40 wholesale or c.a. £15 retail cost for the mild steel.

Nowhere on Planet Earth is anybody selling a brand new garden gate in a super market or DIY store for under ten pounds!

Let me read between the lines here -

You are buying your steel in the wrong place at the wrong time and in the wrong lengths. Because you are working 9-5, you cannot deal with a wholesaler. You don't have a truck to pick up 10 or 20 tons of mixed profile rods and do not have the cash to pay £10,000 for a small load.

So ignore all the vapid management speak about USP and 'positioning' and market research - concentrate on the nuts and bolts of setting up a proper fabrication yard and finding a wholesaler in Sheffield, Scunthorpe or similar steel town. You need a truck, you need space to store all this stuff and machines that allow you to cold-bend and weld quickly and easily. A really, really, really powerful spot-welder will do wonders for your production!

Never mind playing with pretty little 'apps' - get the machines, so that you can bang together a simple garden gate in one hour and get a yard that allows a 40-ton artic to turn about and a tractor with a loader so that you can unload the thing. Tip - you will need at least 3 x 100 amp mains power supply, possibly more.

Cost that lot together and work out how to get from where you are today, to actually having a business that can support you and your family.

Oh my god - loving your in depth reply. If only I can find someone to go so much into the nitty gritty with my question!

 

[Anna Schimmel]

Scenario...

One-man band, large home workshop, making garden ironwork etc - small-scale metal fabrication work.

I am trying to figure out a pricing model that i can use when calculating the cost to charge for new products and for custom work. My work mostly consists of design, plasma-cutting, welding and then maybe powder-coat, galvanising or spray paint finish where applicable.

I do the design, cutting, welding, powder-coat and spray in-house, galvanising is sent out.

I am slowly building up the business from a hobby to a full job to replace my day-job hopefully one day. I have an idea of what i need to earn per hour to maintain the standard of living we have now(as an example) but need to factor in all the other costs too.

I do not try to compete with the garden-centre brackets etc as that is fruitless and soul-destroying - i cannot even get the raw steel for what they charge for a finished item!

I have written a little app that works out a cost for distance cut on the plasma CNC, the material cost per sq cm used, there are fields for design time in hours, paint/m2, powder/m2, weld distance, and a few others.

What i am unsure of is how many of these factors do you apply to a new job or do you simply apply everything that seems to be required - or does that run the risk of double-charging and giving an unrealistic price and losing the job or creating something that will never sell????

I know this is a bit of a "length-of-a-bit-string" question but was wondering if there was a regular model for fabrication work pricing out there????

Thanks

Hi Dave
for your thread / question to be as visible as yours, do I have to become a full member? I've posted a question, but hardly anyone seems to have seen it...

 

[MOIC]

@Davek0974

http://www.granddesignslive.com/

I often visit this show to see new and upcoming artists in their field.

Your products will fit in perfectly and reach the audience that will appreciate your products.

Visitors go there to see "something different".

I would suggest it's worth the cost to get "instant" recognition, both nationally as well as internationally.

 

[Davek0974]

Hi Dave
for your thread / question to be as visible as yours, do I have to become a full member? I've posted a question, but hardly anyone seems to have seen it...

Boosting your post count eh

Simply open your thread, and engage in the replies, if its a decent question you will get the responses you seek.

 

[Davek0974]

@Davek0974

http://www.granddesignslive.com/

I often visit this show to see new and upcoming artists in their field.

Your products will fit in perfectly and reach the audience that will appreciate your products.

Visitors go there to see "something different".

I would suggest it's worth the cost to get "instant" recognition, both nationally as well as internationally.

Thanks

I have requested pricing details but i do feel it is going to be hideously expensive, based on my experience of doing shows for the day job at the NEC many years ago.

I will also need promotional material, stand decor etc.

 

[Davek0974]

Ok, having spoken to the organisers of GrandDesigns at Excel, I can say it is way beyond my budget, it would need a serious loan to get the space and that is a risk I will not take at the moment.

Good idea and may work out well, but not at present.

 

[MOIC]

Thanks

I have requested pricing details but i do feel it is going to be hideously expensive, based on my experience of doing shows for the day job at the NEC many years ago.

I will also need promotional material, stand decor etc.

It's a one off cost and the visitors will be your target customers, as well as exposure to interior designers and trade enquiries, not forgetting international visitors which I feel you should also concentrate on.

All you need is business cards (Leaflets can be done very cheaply and can be used for other marketing campaigns.

The stand can just be a simple stand they provide, it's your products that will stand out. (Give thought to displaying at different levels (platforms are very cheap to buy).

You only need a few samples to show your "handwriting" (Don't make it cluttered).

If you need any advice or guidance for what you need to prepare, feel free to PM me or send me a direct email via my website.

Good luck

 

[MOIC]

Ok, having spoken to the organisers of GrandDesigns at Excel, I can say it is way beyond my budget, it would need a serious loan to get the space and that is a risk I will not take at the moment.

Good idea and may work out well, but not at present.

What was the cost and for what size stand?

 

[Davek0974]

What was the cost and for what size stand?

Smallest stand is 3m x 3m and cost was £4500+

Maybe ok for a well established business or someone who has the cash to risk on the idea but not for me I feel.

 

[Mr A P Davies]

Your down te south of the country, yeah?
Doesn't matter anyway. It would be a bit of a trek for you, but it could be worth you doing a stand on the Royal Welsh show ground, in Builth Wells.
Not at the Royal Welsh show, that's a waste of time. The Small Holders would be my choice for your sort of stuff, I think. Seem to remember they are calling it the Summer Fair now. There is also the Winter fair.
Too late this year, but they do attract quite a wealthy crowd, it's not just old wurzels looking at sheep. I'm pretty certain the stand would be an awful lot cheaper than £4.5K.
A lot of it will be locals, but it does draw people from the rest of the country too.
Google Royal Welsh Showground, you'll soon see what it's about.
Another one you could have a look at is the Three Counties showground in Malvern. I've been to a few events there, and I think you would have a receptive audience, at a fairly reasonable price, although I'm just guessing the prices. They might be mental, but from what I have seen, probably not.

 

[Gecko001]

I have read most of the thread but not all, so forgive me if I am repeating what others have perhaps said.

There certainly is a market for good fabricators who can produce high quality architectural ironmongery. What I mean is bespoke secondary steelwork which is installed in new buildings or buildings that are being refurbished: gates, railings, balustrades, sculptures etc.. Most of this type of work is produced by fairly traditional fabricators who are more used to producing structural steel frames who will charge a lot as they are not set up to do the smaller, bespoke work. I am a structural engineer and know a lot of steel fabricators - big and small and I am sometimes staggered by how much some of these fabricators charge for these secondary steelwork item - it would appear that they think of a price and duble it and they usually get what they ask for.. However, the items are almost always designed by others, whether by an an architect, sculptor, or interior designer.

 

[Davek0974]

I have read most of the thread but not all, so forgive me if I am repeating what others have perhaps said.

There certainly is a market for good fabricators who can produce high quality architectural ironmongery. What I mean is bespoke secondary steelwork which is installed in new buildings or buildings that are being refurbished: gates, railings, balustrades, sculptures etc.. Most of this type of work is produced by fairly traditional fabricators who are more used to producing structural steel frames who will charge a lot as they are not set up to do the smaller, bespoke work. I am a structural engineer and know a lot of steel fabricators - big and small and I am sometimes staggered by how much some of these fabricators charge for these secondary steelwork item - it would appear that they think of a price and duble it and they usually get what they ask for.. However, the items are almost always designed by others, whether by an an architect, sculptor, or interior designer.

Thanks Gecko, I think this is where being a small home based business bites me in the backside - I am very limited on space in the workshop, without making an outdoor shelter/extension, I could not make gates and railings etc, my stuff is all made on the bench as that is really all the free space I have.

I am beginning to get a feeling that my current setup is probably not going to be a viable self employed venture - it is too small to create the work that brings in enough cash to live on. I have no benefits of scale - I cannot buy in a ton of steel, cannot make large high value stuff and so on, I can however make smaller fire-pits and planters pretty well.

Probably better for me to focus on it as a supplementary income to the current day job and then a supplement to a lower paid job if the day job goes, then a supplement to a pension maybe.

I will certainly try the outlets I have in mind, even if just to get a feel for what's wanted if nothing else, but I think high cost shows and exhibitions are out as I have no venture capital and still have the day job. The money I do have in the business is keeping it self supporting, yes it's growing which is good but there is not the sort of cash for booking a £5k exhibition stand.

Advertising in the right magazine is a very good possibility, very carefully targeted Adwords or social network campaigns are also do-able as they are small value risks.

My issue at the moment is that I have potentially high value items that I cannot list on my usual outlets as they are so highly ticketed so my sales of these will stagnate until I find the right outlet path for them.

 

[MOIC]

Smallest stand is 3m x 3m and cost was £4500+

Maybe ok for a well established business or someone who has the cash to risk on the idea but not for me I feel.

Should you decide to take your current "hobby" to a business level, this is your best option for instant exposure, recognition and will open many doors if marketed correctly.

As in any business, you need some finance behind you in order to reach your target audience.

For the cost you have mentioned, you can do (alot) worse.

I take on board your current financial position (and your day job).

Whatever you decide, good luck.

 

[cjd]

This is an example of a highly successful, artisan business. Maybe there's a model you can follow somewhere in this? Note: it takes time

http://www.truggery.co.uk