I am going to do 2 blog posts in one day, am I procrastinating doing making… maybe but that’s not the point, we have two blog posts, yay!
So this is the bog boy post where I am going to talk about pricing. For ages I felt like I was unsure on how to price my pieces. I felt like I was comparing myself to others a lot and I would listen to one person’s advice then backtrack and listen to someone else. I was thinking, am I underselling myself? Am I overcharging? But that ceramicist sells their mugs at £35, should I do that same? Basically, I dont have the answer for everyone but I am going to share what I do which allows me to earn enough to live, pay for everything in my business, put some savings aside for a house and maybe go on a UK holiday or two.
Below I’m going to break it down in cost for my 300ml turquoise mug.
First thing that comes into play with costing is how much it costs in materials. For this you need to work from the beginning:
- Clay: I buy clay in 500kg amounts for £500 which means 100g of clay is 10p.
- Glaze: Each of my glazes is different in cost but I am going to do these calculations for the turquoise glaze as that is my most expensive glaze to buy. It costs me £1.59 for 100ml is glaze
- Kiln firings: In my current studio my electricity is 34p per unit which is sooooooo expensive! At this cost it works out at £30 a firing. I average my kiln cost at £1 an item as sometimes I can fire 100 pieces in a kiln and sometimes only 30. You will need to calculate your own kiln costs and size for this part of the equation.
To work out total materials costs for a turquoise mug I now need to calculate how much glaze, and clay I use:
400g of clay = 40p
100ml of glaze = £1.59
Kiln firing = £1
Total material cost = £2.99
Time is the part of the equation I think I undersell myself on. I charge my time currently at £15 an hour which isn’t enough I don’t think. I would like it to be £25 an hour for the skill I have developed but I would also like my pieces to be affordable.
For a mug it takes approximately;
3minutes to throw
1 minute to make a handle
3 minutes to attach a handle and clean the mug
1 minute to load into the kiln
1 minute to unload into the kiln
2 minutes to glaze and clean the base
1 minute to load into the kiln
1 minute to unload for the kiln
2 minutes to package for posting or pack for an event
/ 15 minutes in total
At £15 an hour this is a £3.75 wage per mug.
- On top of this cost there are other expenses which I have to account for when working out my item prices. These include the pieces of equipment I discussed in my previous blog post. To set up my studio I have approximately spent: £5000-6000. This is equipment that hopefully will not need replacing for a long time but it is still a cost that I have to offset within my products. Without this spending I wouldn’t be able to make the pieces in the first place.
- Studio rent is a big hit each month. I currently rent a 300sqft studio at £395 a month.
- Mobile data or WiFi is important so I can send parcels and print labels at my studio and this costs £15 a month.
- Selling fees or market fees. I currently sell mostly on etsy which is about a 15% fee. Therefore if I sell a piece for £20 (which is my average cost), etsy takes a minimum of £3. They sometimes can charge more but I won’t bore you with those details today. Alternatively, I can sell at markets and events around the local area. I aim for the stall to cost a maximum of 20% of the days’ takings. For example: if I pay £50 for a stall then I hope to take a minimum of £250 in sales on the day.
I allocate 50% of my RRP price to cover all of these expenses.
Therefore in regards to the 300ml turquoise mug:
Material cost is £2.99
Wage cost is £3.75
Other expenses should be 50% of RRP
15% of RRP is profit to put back into my business
At these calculations a mug should be £19.26 and I charge £19.
I also want to say that all of these costs will vary each month but this is calculated from an average. It might mean that next month I make more business savings but in a couple months my expenses will cost more than expected. By taking an average, my income will balance itself by the end of the year. A lot of small business owners will find this when making products to sell; Christmas is always crazy but there are other parts of the year which are quiet. Also I am not VAT registered, and if you are this will impact your costing. But if you are VAT registered then you clearly know what you’re doing so don’t take my advice!
I hope that gives a good understanding of price. I have done these calculations for every glaze option and every item so I know exactly what to charge. Some items do not provide a 15% business profit but are often bought with other pieces and that is more of a business decision to take the hit on some items with the hope others are bought too. Let me know your thoughts and if you do it differently to me!