Student Examples: Pricing
now I actually want to dio a little pricing. Hot feet. Yeah, fun for you guys. Okay, so we're gonna have the flip chart come up here. Who wants to volunteer? All right, So before we get started, tell us who you are and what you dio. My name is Kalen Van Cura, and I make women's accessories, hair accessories and jewellery for darling Marcel. Alright, so Step one. So I'm trying to make this easy for you guys. And also easy for me so I can keep this in my head. Step one, you're gonna set the new hourly wage hourly wage, I think decided on $100 in our very right that really big here. This is another thing that I like to do, which is like, the more you say these numbers, the mawr comfortable, you get with them. Okay, so now we're gonna re price something based on that. So think of a particular product. Ok, um, I could do this necklace. Let's do that because you're wearing way right? All right, So what's your material costs on that? Well, this one is complicated because this is the one I men...
tioned that is cast. Okay, And so the actual material cost is not very much. Um, a few dollars. Okay. So, like, three bucks? Yeah. Okay. This is perfect, because we'll do your hard scenario. So what is the labour to make? The one that you're wearing, like, just a one off outside of the. So, um, first I designed it s so I mean, we're gonna come back to that literally. Now that you have the mold. Now that you have everything, how long does it take you to make one? Now, um, let's see what? Casting? Finishing half playing. It would just take a probably 10 minutes and probably another minutes to put on the on the jewelry. Okay, so you're looking at about 20 minutes. Yeah. Okay. So if my calculators doing funny things to me, So if you're, like, 20 minutes, the extraordinary rate make $33. Now, let's talk about that other. I don't know why I need the calculator. Do that. Your $100 an hour thing called Stage Brain. I'm saying about that. So let's back up and talk about that other process. Peace just for a minute. So there's other materials that are involved in making the prototype because you after three D printed. So what's what are all the other material costs? Uh oh. Tape a proper Just ballpark it for us. I don't know. Probably $25. Okay. For the three d printing. And how long does it take to you that kind of design time? Three. Make a three D model. Make the mold set up. I don't know. Probably three hours. Okay, so we're looking at about $300 there. All right, let's come back to this side for a second. So we've got material throughout labor. So based on this, we're just gonna ballpark you an overhead of, like, we're going to around $ and we're gonna throw in $20 for profit to. This is my game. I get to make up the numbers. So right now we're at I know I should be able do this math in my head. So right now, without factoring any of this in were at $76 times two, which is a retail price of 1 52 What do you currently retailing them for? 45 0 Okay. So that really doesn't even cover any of this, But then it certainly doesn't cover this. So I would say, you know, let's just say we're thinking about, like, a number of 10. So I know I should be able do this math in my head. I'm tired. Jet lag. We're gonna believe that. Like So let's just say if you were only ever selling 10 of these, you would have to add on an additional 30 to 50 to cover that time. And now, obviously this number goes down, the more you sell, but it's something to consider. So you may actually be at $ for this. So that was all step to This is just step two. So now let's get Step three, which is we're gonna find some proof for your new higher price point. So because you're only telling them for 40 we're gonna we're gonna call it 1 50 It's still not where I think you need to be based on the back of the napkin numbers, but it's a big step up from where you were right. You were gonna were gonna say, Right now, we'll let you say one of those necklaces costs 100 $50. Okay. Can you think of any examples? And I know this is this isn't easier one when you have the Internet in front of you. But can you think of any examples of how you could of anyone else who's selling at that price point? No. At the top of my head in a plastic lawn, Von necklace for just looked at. Right? Right. OK, ok, so that's gonna be part of your homework is to go and look for some more examples. But let's talk about step for which is let's confront the gremlins. They make you uncomfortable with this new price. So tell me why you're squirming a little. Well, I don't know. I'm just afraid that the people that like them won't pay that much. Okay, like, I'm afraid that price my self out of my customers reach okay. And do you think that is because there's only one particular kind of customer or because you've only really shown it toe one kind of person? Yeah, pretty much, uh, that everyone so far that, um, that likes it seems like they're more, I don't know, more artistic, less money having type of person. So one of the things to keep in mind is that even if someone seems like they don't have a lot of money, it's really thinking about where they prioritize their money. And so they might not be able to impulse buy at your new price. But that doesn't mean that they won't buy, so if they love it, they might think about it for a while. And this happens to me all the time, and I actually, truthfully made the same mistake that you're making. I was like, Oh, I have all these kind of artsy creative people who are following me and they're not They're not gonna buy my work right because they're not making enough money. But for most of us, it's not about making money. It's about prioritizing what we spend money on. And actually, what I found is that some of those artsy creative people are more likely to spend money on something hand made an awesome than the regular person used to used to going to T. J. Maxx and buying a necklace. So I want you to think about how you could give your audience some credit. First of all, the other thing is, you know it does appeal to a more creative person. What are the creative people who are maybe making a little more money, right? The graphic designers, illustrators, the people who have this really cool kind of funky aesthetic and have jobs right in this area. I think this area that makes a difference. The other thing to keep in mind is that there is a perception that's very different between $40 on $150. And I mean that with the perception of $40 B not good, right? So they see that and they're like, $40. It's gonna fall apart in two weeks, right? We're used to when things are cheap, they don't last there, Chief. They fall apart. And so when you price at a different level, it gives it a different perception. Now, I'm not buying this cheap thing that might break in two weeks. I'm buying this cool piece of art that I can wear around my neck. Yeah, sometimes I worry, too, when I see things that air supposedly handmade. But they're really cheap. I were wonder if there really handmade Yes, and I I think because you have this kind of very flick aesthetic with the plastic that people might wonder that about yours, too. And so they might look at that and think, OK, is that really handmade? And you know, it's handmade because you went through the process, you cast it. There's a person involved in the other end, but the price isn't communicating that. So if you feel those things, you know, your audience is feeling those things as well. So then step five, which is easier said than done. We're gonna work on that one throughout the rest of the day is to embrace the new higher price. So hopefully, as we move through the other roadblocks today, you're gonna get more and more comfortable with this price. But for right now, when I want you to sit with for the rest of the day is that you are now wearing $150. Okay. Okay. All right. If it makes you feel any better, I'm wearing a 600. You could be like All right, we're getting there. Okay? And also, if you really want this later, you could take that home. You Down. Thank you. All right, go ahead and introduce yourself. Tell us who you are and what you dio. All right. I'm Anna Bundgaard. I'm from Denmark, Which is why my English might be a little funny. Um, I'm a graphic designer and artist and illustrator. Okay, so we're gonna talk specifically about your art here, because I know it sounds like you're pricing your graphic design work, right? We're gonna focus on your art and this $1 an hour problem and you having? So what is your new hourly wage? 100 and 50. Okay, so let's talk about and we don't have an example of your work up right now. We're actually probably looking one later, but think of a particular what a painting tell. Like specifically when you say your artist, what do you make one example. You give us wanting one specific example? Um, some new illustrations are pieces. I'm working like a two dimensional painting. Are something sculpture, three dimensional drawing. Okay, so Okay. So what is the on acrylic and acrylic acrylic paper? Perfect. Okay, So what is your material costs for something like that for drawing like that? Um, maybe $8. And how long does it take you to make a drawing that, um include. And so I think this is one thing that I want to throw in here to, like, in your case, you know, throw it. You actually throw in the photography time, like to shoot it to get it on your website. Teoh, they're letting in here. We're already already in way. Can throw that in there as well. But it's a really hard question because I didn't love sketching. That all comes into play like when you're making a one of a kind you have to think about. The design process is part of the process. So that's maybe 20 hours. 20 hours. Okay, so and it's not even that big. That's okay. I know I should do this math in my head, so Okay, okay. Okay. Because I realized what? Okay, back up. So something like this that you're thinking of What are you selling it for? Now? Um, I'll have to calculate really quick. Um, 500. Okay. All right. So you were selling it for but I want to add something to you. Yes, because I don't do it enough. But what I also do is that sometimes make um, uh, prince off my drawings. Right. So So. Right. So there are two things here and what I think is really important. If you're selling original work, you need to make money off of the original. The prints are icing on the cake. OK, so that means that mean we can do the rest of the numbers and weaken double it. We're looking at least $6000. Okay, so there are two things that come into play here. One is to find cops, someone else selling similar work at even this price point. Because that's very different from where you're selling. So can you think of anyone off the top of your head Was selling for that? Are you selling for? Yes, Something in this similar work there. Famous people. Well, there you go. Right. So there there is someone you can name some on top of your head. But there there are people selling work at this price point right yet, but not the people I compare myself. Okay, Right. So this is that Kremlin, right? I am not famous as X y z. All of those people started where you are. They just figured out how to make themselves famous. They worked with the right galleries. Or now you can sidestep galleries if you want, and build up a giant profile on social media and have people buy from you directly. So part of your job is to go out and find more cops and more examples that help you support this higher price. Now, of course, if you are selling prints, then you do get to make more money from it. That's gravy, but I really think it's important. So here's the other thing that I want to point out about selling prints. Any time you sell something that say 25 $50 you have to sell a lot of it to make money. Which means a large part of your day is now spent managing the process of selling Prince instead of making your art. And so that's why it's super important to price the original so that you're actually making money because it supports you creating more originals. Um, the other thing that we're gonna talk about in the next segment and so we're gonna we're gonna kind of let your number float here for a little bit is sometimes when I hear numbers like it takes me 20 hours for a fairly small piece. This is that second roadblock of art school gives you the luxury of working slowly. And so I'm not saying you have to cut that down from 20 hours to two hours. But you may to think about how you can make your process a little bit faster so that suddenly now, this is like a $1500 piece. If that feels more like what the market supports doesn't make it. So. In your case, your homework going forward is to a work on finding those cops. But then be we're gonna come back to you when we talk about the next road Black, because I think there might be some room in here is well, but I also know that there are cops out there that look like these numbers. Okay. All right. You ready? Get comfortable starting to think about those numbers. All right, You have a seat. He's going to pick on you because I know you have that furniture that I know. You're not charging enough for it. We're going to do one more hot seat. We have the time, so yeah, you were I know you were, like, avoiding my eye. You were trying not to do that, but we're going to do it. Okay. All right. So what's your new hourly wage? My new hourly wages. 75 hours. Awesome. So let's pick one piece of your painted furniture, which you guys are gonna see later. Okay, So I recently did a night stand, and so the cost of So what we're doing todo materials first. Yes. Lets you materials first. So generally it's around 101 125. A small piece. Okay. And then how long does it take you to make that takes? What's a long time? It probably takes me 40 hours to hang. Wanna go? OK. Hey, look, this number looks really familiar. What, you currently selling that at its generally somewhere between 500 Somewhere around that. Okay. Wow. These numbers look really familiar. Okay. You've been telling it for their so really again. If we're, like, just taking this, you're at, like before we even fudging these other things. You're like 6500. I gotta pay faster. Okay, So you're another one. We're gonna come back to you in the next segment, but first of all, Can you think of cops? Yes. Awesome. Tell me about them. I've actually googled this before, and I've seen him on, like, a very specific Like I do a lot of money. Things air mostly for Children's rooms and things like that. So they're like beams with Children. I've seen him on, like, higher end websites where their hand painted and they're actually more like 10,000. I've seen him for 10,000 but I'm not talking about small piece. I'm talking about armoires, Okay, But still, there's some There's a market proof there. Okay, so So what are the gremlins that make you feel like you can't be there? Well, I do feel like I should charge more. I'm My big question is like, how do you get it to a customer? So if you find that customer, how do you get a piece of furniture to a customer? So you're literally talking about shipping, which is right. Okay, so in your case, you're going to ship it by freight, and you're gonna probably charge another 3 to $500 in shipping. Here's the thing When you're charging $500.3 to $500 shipping seems ridiculous when you're charging sixty, five hundred 3 to $ shipping is normal. And actually, for the record, I tried to get a book case off of Ikey of the other day, and it was an $80 bookcase. And, as you know, we live nowhere. Near Nicaea was an $80 bookcase that they wanted to charge me $350 to shift. So I drove two hours to idea. So you know, that is not an abnormal shipping cost for furniture. Okay, so that, like, 350 to 500 then in your case, um, what you can do is just look into some logistics like UPS has a freight shipping option. There are some other companies, so that is a hurdle that's actually very achievable. So that when I wouldn't stress about too much. So besides the shipping, are there any other remnants that are keeping you here instead of here? I feel like I don't have to photographs of my work because when I do a piece of furniture, like, where do you shoot something like that? Or if I like, If I take a picture of it in my house. It's so dark. It's hard to get all of the pieces the whole piece in. So right, So what that means for you is instead of that being looking issue that goes on your toe lorne list. So my my toe learn list is that I need to figure out how to take better photographs. And that may mean learning how to fix lighting. That may mean figuring out better situations or how to set up a home studio. So you're gonna put on your list and the beauty of that? This is that you happen to be participating in this class, which is on creative life, which hasn't amazing resource is for photography. So in terms of skills you need to learn photography is a really easy one to fix. So that is a good thing. I want to ask you that hand painted furniture that you're looking at, where is it made? What's up that you found online? Um, I don't know. So that is also something that I want you look at just in terms of this idea of, you know, getting comfortable with your pricing, because I don't know, because I have no idea what you're talking about. But if I had to venture a guess, I would say that that hand painted furniture, while hand painted is hand painted in a furniture hand painting factory somewhere overseas. That would be my guests, just based on what I know about the world. And so what that means is that if they're charging this, the people who are painting it are getting paid almost nothing, and the company is making a huge profit on it. So when you're thinking about like, do I deserve to get paid this? Remember that, Like you dio Because there's room in the market to do that. Does that make sense and questions about your pricing? OK, all right. So I know that this is kind of becoming a challenge for people. And so what I want to remind everybody is pricing is not a one and done exercise. This is something you're gonna do forever. I run prices all the time. I look for cops all the time. I adjust tonight with my prices all the time. So this is not like I set my prices like for out about it. It's always checking in with your prices. Now I want to address this idea. Okay, what do you dio? If you really can't find comparable proof for your prices or you can't find proof, that seems reasonable. So my first question, if this is feeling like you have, you looked everywhere. Have you really, really, really, really looked everywhere his It's very likely that you will find something somewhere. But that said, there is the potential that something is making your prices abnormally high. And as we looked at with a couple of people, usually that's your labor cost. And that's because art school gives you that luxury of working slowly. So when you have to bill at or $150 an hour and something takes you 20 or 40 hours, sometimes it does take you 20 or 40 hours. But sometimes there are things in the process that are making it slower than it needs to be, and it's making your prices of normally high