The Challenges of Pricing a Quilt
*Ok, for starters, I meant to respond to everyone's comments on my previous post, but I accidentally left my computer cord out of state this Easter weekend. Sigh. Moving on...
Thank you all for chiming in on my post about listing my first quilt for sale on Etsy! First of all, I feel totally embarrassed/vulnerable to admit that it's my first listing, and also to have everyone pick apart my pricing. But hey. I asked for it; I received! And it was all very helpful. (Plus, you guys are my peeps. I'm pretty real here on my blog, and I'm glad when you can be, too.)
I ended up bumping my pricing up to $130. Here's the current breakdown:
$8 backing fabric
$4 binding fabric
$52 furoshiki
$2 thread (approximation)
$37.5 – 2.5 hours labor @ $15/hour
$15 - 1 hour labor @$15/hour for design (just fabric sourcing, in this case)
At this point, we're up to $118.50. Now, Yvonne pointed out Etsy & Paypal fees. Ooops. (Do y'all know Yvonne? She's pretty awesome, and I am in awe of her commission works thus far, so I totally respect everything she has to say on the matter.) She suggested adding about 6% to this price, so this brings us up to:
$125.61
Now, a few of you mentioned packaging, shipping, and driving to the post office + the time I send there. My response to that:
1) Packaging - just some tissue paper + my business card = a nominal cost (though cost all the same)
2) Shipping - There's a separate section in Etsy for shipping. So that's added on after adding the item to your cart, and I had already figured that one out. No worries there :)
3) Post office/handling - I'm at the post office pretty frequently, so I won't need to make an extra trip (not to mention, there's a playground right there, so it works out pretty well). Maybe add on an extra 10 minutes, at the most, to hours-charged for this, once my time/gas/etc. is divided between my other items to ship.
4) Health care & other business fees - No need to concern myself with health care, as my husband's coverage is great for us all. ("Other business fees" - I'll address that next.)
After these considerations, I bumped it up and rounded it up to $130 (someone pointed out I should round UP, not down. Good point.)
On Sunk/Overhead costs
This refers to my machine, my sewing space, needles, safety pins, iron, etc. - and could even include classes/training, business license, etc. I didn't charge anything for this on this quilt. I consider baby quilts to be an introductory product - as in, most people wouldn't simply buy a king sized, fairly priced quilt as their first-ever quilt product. Yeesh, that would be pricey! But this is a good way of getting their foot in the door; of gaining customers. Not all products have the same profit margin - for example, I have a pretty decent profit margin on my signed copies of my book (because I had a LOT of sunk costs in that thing!). I would also build in that 20% overhead on my other quilts (I plan on listing more in the future). But for a baby quilt? I wanted to keep this item as a starter purchase, if you know what I mean. I'm ok with different products having different profit margins - but that's just me. Maybe that's not your comfort zone, and that's just ok! This is a personal judgment call. Don't worry, I had thought about this ahead of time :)
On Wage
The biggest charge that people questioned was the hourly rate I listed - $15/ hr. The term "living" came up (as in, living wage). Once again, a good point, but I probably neglected to include some necessary information there - I live in Indianapolis (central US of America, for those who don't know).
The concept of living wage varies greatly based on two things - 1) where you live (ie, the average cost of living in your area) and 2), how you live (ie, your personal cost of living). Both of those are quite low for us. Indiana, and Indianapolis in particular, is quite affordable. Secondly, we don't live extravagantly. So that's not a bad wage here. Now, if I lived in New York City, or Los Angeles, or London - well, I'd have to double or triple that (or more) just to get a comparable hourly wage. So when I say $15 an hour, and your jaw drops, well...it might be equal to $45 (or more) an hour where you live. And I think that's important to consider. I would never expect a New York quilter to work at the same rate as an Indy quilter.
As far as finding a standard in pricing, I thought this was a great comment: "Perhaps if there was a standard in this quilting market, as there is in the restaurant industry, it would make things easier and a bit more…. even. Maybe?" Furthermore, the concept of my "expertise" was brought up. Let's talk about both of these comments.
Though there has been more discussion on this matter as of late, there still isn't an acceptable "standard" hourly rate for this kind of work. However, I think we can look at similar hourly rates in our community for a comparison. Kathleen wrote a great post explaining how she would have to charge 14.5 cents per square inch to earn $27.7 an hour (on the example quilt she gave), but she actually prices out her work at a lower cost (according to her post). The last I heard quoted, Judi at Green Fairy Quilts was charging $30 an hour (not sure if this is current, but it wasn't all that long ago).
These women are extremely talented, and have a lot of overhead costs (ummm, longarm machine, anyone?). They quilt your project extremely densely, and are more skilled than most people in the industry. In contrast, the quilt that I made was very small - just 34" square. Due to its small size, no difficulties were presented with wrangling a large quilt while basting, quilting, or binding. I straight-lined quilted it in an extremely basic manner. While I'm competent at straight-line quilting, I'm by no means especially skilled or experienced. I find it challenging to consider that my work on this quilt would be considered on par with the skills of Kathleen and Judie. Perhaps they are pricing too low; however, that would not be my first assumption considering their level of experience selling their wares. I find myself fairly ordinary (though competent) talent-wise in the product & skills I'm presenting in this quilt.
On the other hand, a quilt like Icy Waters (with my own custom design work and signature use of dynamic ombre, and the honor of being on the cover of a book) or Dyed (with my own custom design and advanced free motion quilting skills, manifested in feathers, matchstick quilting, and graffiti-style quilting) - I would have no problem pricing these at over $50 an hour - perhaps even $100 an hour, since I consider them works of art. That's not to say they would be guaranteed to sell, but that I wouldn't have qualms pricing them there.
Perhaps the most interesting of all the comments were the following:
Mel said - "I think it’s really tricky because obviously your time is worth more than that, but it’s a question of what the market will stand. It’s possible that a lot of people who understand and value handmade stuff won’t buy because they would rather make their own...Despite people saying to the contrary, I do think that our competitors ARE often just simple blankets and quilts from shops, which can be much cheaper." Yup. You nailed it! All of my fears and concerns, right there. (She said a whole lot more, I highly suggest checking out her comment on my original post.)
Molly said - "I think you have priced it fairly based on materials cost, although I know that $100 for a baby blanket would have given me pause. (When I was purchasing for babies, I was always mindful of leaking diapers and spit up and the idea of a diaper blow-out on a quilt I had paid $100 for gives me the willies)." Totally agreed! I also wonder if the reason I lean towards pricing it lower than all of you had suggested was the small size - this is less than 3 feet square. It's small, even for a baby quilt. And over $100? Wow. Quite an investment (for the first-time mom who's buying a lot of things things new). I might conclude that I'm simply not the market customer for a baby quilt. She went on with the rather astute observation: "On the other hand, as a work of art, $100 doesn’t seem terribly expensive at all. The same quilt, marketed as an art quilt rather than a baby quilt, suddenly seems like a bargain." Dang. She just turned everything on its head with an extremely interesting revelation....
Carley said - "When I was in business school, we looked at how increasing the price can actually make something sell faster. The reason is related to the idea of “you get what you pay for” that is so commonly held. People often believe that something is more valuable if it is more expensive and if they pay more for it. Sometimes it’s not about fair pricing, but about letting people know that what you sell is valuable." Wow - Can we just grab a cup of perpetual coffee and talk for life? Because I'm intrigued. Beyond intrigued.
Anything that strikes your interest? As usual, I'd love to hear everyone's opinion about this - I don't have a specific question or point to direct you to today, because I just said a whole lot.