Pricing....again

[maryw]

I read the archives on pricing and it was really great. Hope you don't mind my asking one more question. As a beginning engraver using the Graver system, I need your advice. I was asked to engrave just one initial on 3 pieces of jewelry using a medium degree of detail and flourishing. Please advise me what would be a fair, reasonable, in the 'ball park', base price for doing this. Pricing has always been so difficult for me. Not sure how to find out about other hand engravers in my area, but may call an upscale jewelry store for info. Any help that you might offer would be much appreciated.
Mary W

 

[DocM]

Hi Mary,

$50.00 to 75.00 per hour. But if you are fast don't price by the hour but by the job. ie., $50-75 per piece
3x50=150.00 or 3x75=225.00. Of course if you are talking about cheap jewelry then you will need to
cut the price. Folks don't want to pay more for engraving than they paid for the jewelry. A jewelry store
would use a machine. Remind your client that you are doing hand engraving and that in itself makes the
jewelry more expensive than jewely store machine engraving would.
I am also new to engraving but I have done checkering for a long time. I have done it both
ways.

I guess there are two ways to look at pricing: 1) the Quantity theory or "Dime store theory": sell a lot a small profit or 2) Quality theory: sell a little (with lots of quality) for a larger price.

Doc

 

[FL-Flinter]

I'm brand new to graving but have been self employed since I was 16 so take this as a comment on the business aspect and not on the product/service itself.

If you go to an auto repair shop with a $45,000 Lincoln you're going to pay say $80/hr to get it worked on. Go to the same shop with a $5,500 Kia and you're still going to pay $80/hr to get it worked on.

17 years of doing fabrication & repair, I speak from experience when I tell you, the lower something is in quality, the more problems and time you'll be spending on it trying to make it right. When you're building a service business, you're selling yourself and you need to build a reputation of only doing quality work. If you lower your standards to work on a cheap piece of crap for less money then try to charge more to work on a high quality piece, you'll quickly be branded as "rip-off". If you work on a Walmart ring for $25/hr, someone bringing in a quality ring is going to expect to pay only $25/hr.

In my business, I had a set rate I charged, when someone showed up with a cheap piece of crap that I knew was going to be problematic because they always are, I would quote them a price 50% higher than my normal rate (annoyance factor). If they brought me something they took somewhere else first and I had fix not only the original problem but also fix the other guy's work, I charged double my normal rate.

You will lose a little work by maitaining your price and quality level but in the long run, it will pay off because you will build a reputation of only doing quality work and people will pay for quality. If you get a reputation of doing cheap work (not meaning low quality, I mean not charging enough) you'll loose business if you raise your prices. If you keep your price set and don't lower it based on the cost of the item the customer brings you, you build the good reputation and people will pay more for your work and be thrilled about it.

 

[KCSteve]

In addition to FL-Flinter's good advice, it helps to keep a list of others in your area. Refer people to them when they bring you something you don't want to do (for whatever reason).

Sometimes it will be because you don't want to work on that kind of item but know someone who specializes in it (and who'll probably send your 'type' of work back in return).

Sometimes it will be stuff that you're just too expensive for, like that Wal-Mart ring. It's much better to be able to say "Having me engrave this would cost more than you paid for it. This jeweler can do it with a machine for much less." The person will get there ring engraved, which will make them happy, and they'll come back to you with their 'good' stuff.

Here's a trick I learned a long time ago: Have a competitor you kind of (or really) don't like? Keep some of their cards around. When you get that 'extra special' client tell them that you're sorry you can't give them the kind of attention you deserve but you know someone who'd be a perfect match. You also tell them that the other guy was feeling bad about all the business you've been sending his way so please don't tell him you sent them. Yeah, it's evil, but it's a fun evil!

Oh, and as to price: one thing I can tell you from photography is that you'll lose more business by setting your price too low than too high, at least if you want to do 'quality' work. Someone who's got a budget in mind of $2,000.00 will, when you tell them you can do it for $500 say (or at least think) "We were looking for a professional." If you say $5,000 then they'll tell you it's too high and you can, if you so desire, negotiate down by cutting back on what you do. For engraving that would mean doing a simpler design and/or less coverage. The key is knowing how much you need to make from a job - and knowing what you're upper limit is. There will be times (hopefully) where someone's budget is actually more than you think the job is worth.

Great thread! I also need info on engraving ball-park pricing so I'm reading carefully and taking notes.

 

[FL-Flinter]

First, Steve is right about making your price high and negotiating down a little if needed for those customers who think they are talking themselves into a deal. If you work the negotiation way, know where you are going with the negotiations. If a job should pay $100 and you start your price at $150, don't immediately drop to the $100, come down to $125 but specify that in return they (customer) agree to tell others about your work. If they're still a hard sell, come down to the $100 price but in return negotiate on your behalf by insisting they bring you other work or even better is when you charge them $125 for a $100 job then tell 'em that you'll give them a $25 credit towards their next visit. Write it down on a small business card size piece of paper. They'll be thrilled to get the discount but will likely loose the credit slip and forget about it by the time they come back again, even if they don't have the paper but remind you of their credit, give it to them, it's still not costing you anything and it makes the customer feel special.

A few things I forgot the first time:

GET EVERYTHING IN WRITING! Trust me, I learned this the hard way and it cost me a lot of money. Make sure your contract is legal in your location, no matter where your customers are from, the laws where your shop are is what apply no matter if the transaction is done via mail order or whatever. Anytime you do custom work, you open yourself up to all sorts of liability and unless you have a concrete solid contract, you stand to loose not only the fee for your work but also the cost of the item you were working on. If need be, go to a good lawyer (get references) and have a general contract professionally written up and make sure you have each and every customer print, sign and date it. If the customer is uneasy about signing a contract, it means two things; 1- they are looking to screw you ... or ... 2- they think you are going to screw them. In the case of #1, send them packing, you don't need work that's going to cost you money. In the case of #2, explain to the customer that the contract protects them in the same manner it protects you.

When it comes to pricing jobs by the piece as opposed to by the hour, you need to be very careful so you don't screw yourself. You have to know exactly what you're getting into and plan for every possible condition that may not be readily visible. In my case, I did road service on big trucks (semi's). Driver would call my asking, "how much to change a tire?" Most took about an hour but the seemingly simple tire change could end up taking 4 or 5 hours if studs break, nuts strip or other unforseen problems arise. Thus, my answer in every case was, "The first hour costs $125 and each additional hour is $85 plus all materials." If I went out and changed the tire, everything went right and it took me an 70 minutes, they got charged for only 1 hour. If I got there and found six broken studs, then there's the cost of the studs themselves plus removing the brake drum, plus installing the new studs and if there was a problem with the brakes .... it happens more often than not but since I specified an hourly rate instead of a set price, I didn't end up loosing money and the customer understood that they were charged for the actual time required.

Another thing about figuring your time, you need to charge for the complete job. If it takes you 30 minutes to set up for the work and another 30 minutes cleaning up, you need to figure that time into the work or you're loosing money. In my business, I spend no less than 20 hours a month doing inventory, placing orders and re-stocking my parts & supplies. Another 10 hours a month was spent taking care of paperwork associated with operating the business. Another 10 hours servicing my equipment so it's ready to go when the customer calls - all this time also has to be charged for. In a large company, they pay people to do every job, you're doing all the jobs yourself when you're self employed. Just because you are self employed does not mean you have to work for free. So there's 40 hours per month (480 hours per year) you're working for free unless you add it into your hourly rate.

Sorry, didn't mean to ramble on, trying to sum up decades of business experience isn't easy.

Mark

 

[monk]

there's one way to price your work, the hard way. factor overhead, time spent, quality of your work, etc, etc. this is not easy to determine. if you're a beginner, you aint gonna get master engraver rates. as a hand engraver, absolutely your work demands more than the pantograph commands. as a beginner, you must start a journal of everything you do. when you sit at the bench, what ever goes into a job- drawing the design, engraving it , time with customer, sharpening gravers, etc, etc, this time total for every job must be kept track of, otherwise, how will you know what you're doing ? use a stopwatch. record total time for every job. this way you can learn the inexact art/science of quoting a job .if you don't learn to keep an accurate record of time on your jobs, i'll guarantee you that you will be cheating yourself out of money that you have actually earned. this can lead to "bum" out, as opposed to burn out.

 

[coinguy]

I've enjoyed this thread and can add my bit. I'm not selling my work yet, still learning and practicing, but as a long time gun and coin dealer, I have found that many times, if an item doesn't sell in a reasonable amount of time, I RAISE the price. Most times it then sells right away. This is basically for something more collectable rather than the current model of gun that everyone is selling. I really think that some feel that if it isn't priced high enough, something must be wrong with it. Yes, you always get the customer that wants a discount and would still ask for one if you were selling $10 bills for $9, but for a better, collectable or hard to get item, many customers will pay for what they want. I think the same applies to specialty work.

Glen

 

[Marcus Hunt]

As ever, some great advice.

I will add one thing however, make sure you are capable of delivering the quality if you are asking a high price. If you are starting out you are going to have to build a reputation and this won't happen if you wade in asking the same prices as an engraver of 20 years experience and already has that reputation. In the beginnning don't be affraid of putting a bit more into the job knowing you will not be getting top dollar for it. Whatever you send out into the big wide world will be your embassadors and you want people to show off your work with pride not grimace. At the end of the day only you know what you are worth and what you need to earn to survive.

 

[maryw]

I understand and appreciate all the great advice each of you gave. I will print it all out for my notebook. Everything I learn is invaluable to me. My dilemma is that I don't know where to begin a price. The engraving that I do at the present time is done with a dental drill (carbide burs) and I take my equipment into department stores and engrave on fragrance bottles (for men and women) (message on a bottle), and compacts, crystal, silver. The engraving is done in a beautiful script lettering - free hand - and I average 20 items an hour. Takes only 2-3 minutes per item, and I do the engraving while the customer waits. I charge the store per hour for an 8-hour event, and the engraving is free to the customer. Very nice pay - but I LOVE what I do - so that's icing on the cake.

I realize that you don't know anything about me or the quality that my engraving with a graver would be, but I can only tell you that I'm a perfectionist and strive for doing beautiful work. I know that as a beginner with the Graver system, I will not be able to do my work with speed nor as well as I will with experience.

With that said, could anyone just give me a fair beginning base price for engraving one letter on a nice piece of jewelry. Do you remember any of the pricing when you first began - I know I will learn from my many mistakes - but I just need something to start with.

Thanks you all very much. Great forum!
Mary W

 

[FL-Flinter]

See what others are charging for the same type of work, even if you have to look at places far away and then compare their quality to yours and set your prices accordingly. Don't ever sell yourself short, people associate quality with price and if you've got the quality to back up your price, people will not only pay for it, they'll send you more work and you'll quickly build a good reputation.

Bragging rights mean a lot when you're running your own business. When I ran my welding business, my rates were higher than every other shop in the area. When I opened my business, there were 22 other shops around the area doing similar work for less money than I was charging. Within the first three years, there were only four shops including mine still in business. By the sixth year, there was only two shops, mine and another one about 35 miles away. Many others came and went over the years, none of them lasted more than a few months and they disappeared. I had many customers that would wait weeks for me to get to them rather than chance letting someone else work on their equipment. I still get calls from customers offering to pay me double what they were paying me if I'd just come back and keep their equipment working. You can well bet, if I was physically capable of still doing that work, I'd be making a killing right now. Never sell yourself short!

Oh, and don't fall into the trap of "well that's a fair price for the area". Guess what, all the people living around you go to wally world, they're paying the same prices as someone going to a wally world a thousand miles away. They're also paying $3 a gallon for gas just like they are everywhere else too. You buy a handpiece or a carbide bit, you're paying the same for it as everyone else, you don't get a break on the price simply because you live in X location. Same thing goes for your work no matter where you hang your hat.

 

[Barry Lee Hands]

I regularly charge $300.00 for a three letter monogram on a stock oval. It usually takes an hour or two with handling. Most clients don't seem to be interested in the hourly rate, but rather the total cost for the job. Quality must be of paramount importance.