How to Price Your Leather Work | The Business Side

[@LarryReynolds591]

As an economics professor in a business school interested in leatherworking, I strongly approve of this video! Well done!

[@justanazareneleatherco]

Wow! Great to hear! Thank you for watching and commenting.

[@dannymarkgraf34]

THANK YOU!!! this is one of the best and most helpful videos i have seen since i have started this journey. the spreadsheet is awesome and will be a very valuable tool.

[@justanazareneleatherco]

You are most welcome! I'm glad the video and spreadsheet helped you, and I wish you great success in your leather work!

[@dannymarkgraf34]

@@justanazareneleatherco thank you.

[@stevejennings899]

It;s too late in the evening for me to watch now. I am definitely looking forward to watching tomorrow. This is exactly what I needed as I've just started a leather craft business. I'll get back tomorrow. Thanks

[@justanazareneleatherco]

Congratulations on getting into the craft! I pray this video is a blessing and a help to you in your leather work!

[@scott-n-miarode8565]

This is great advice all around. Especially in the comments, I do custom artwork and my husband is the leather man. Your wife's suggestion is VERY helpful! Thanks

[@justanazareneleatherco]

Yeah, I've found it best to listen to her advice! Thanks for watching!

[@trollbait3196]

I am just getting started with my own leatherwork and this was amazing

[@justanazareneleatherco]

Glad to hear it! Thank you for watching, and I wish you all the best!

[@Calypso3]

Great work and explanation! Thanks for sharing 🙏

[@justanazareneleatherco]

Thank you, and I'm glad it was helpful!

[@vikistrand8639]

Thank you for an insightful and helpful video!

[@justanazareneleatherco]

You're welcome! Thank you for watching!

[@V3leathercraft]

Thanks a lot for worksheet 🙏🏾. Some points I wish to add 1) The leather cost, we need to consider 20-25% cutting waste as scrap, as we pay to for each SQDM of leather. 2) Dyes Cost, we can ask the supplier, how much dye consumption per sqft in medium shading. So we can add 50% cost for darker dyeing. 3) we need to consider the investment of tools. A high professional tool will last only 4-5 years, with daily work. So we can take it to fixed costs

[@justanazareneleatherco]

Well said and thanks for sharing! I made a separate video about how to price leather where I discuss accounting for scrap. Great advise on the dyes cost...since I do not do much dying on my products, I keep that cost very generic. But for someone who does more dying, I would definitely recommend your approach. Again, thank you so much for sharing your insight about leatherwork and finances! I appreciate it!

[@dannymarkgraf34]

@@justanazareneleatherco depending on the size of the scrap pieces, you could use your scrap to create other small items to make money from your scraps

[@justanazareneleatherco]

I make small leather bracelets/cuffs (like the one I wear in the videos) with some of the scrap. I need to come up with more ideas for the scrap though. Great advice, thanks!

[@jakubowsianski1201]

This video is more Awesome then I thought in the first place. I habe a lot of troubles mit pricing my crafts, and that will definietly help me.

[@justanazareneleatherco]

I'm glad to hear that! I hope it is a great help to you in your work!

[@viviennevalentina7556]

This is AMAZINGLY helpful! Thank you so much 🎉

[@justanazareneleatherco]

You're so welcome! Thank you for watching!

[@immolder]

Watched your video about a week ago. Downloaded the the file and added some data points to suit my wants as a custom leather worker. You are a number cruncher and value data, which allows you to improve your profitability. My career was in manufacturing where I was taught data is #1. 2nd was continuous improvement to improve profitability. 3rd was to engineer in quality vs inspecting in quality, one is proactive while the other is reactive. All of these require data, and a consistent way of gathering it to analyze. On pricing you hit valid points, yet if your widget is the same as others you can add value by service. Or you make a unique widget with superior materials and/or craftsmanship that elevates your value. Know who your target market is! A small rural farmer will have different wants and needs versus a big city executive. As a custom maker my market is smaller due to my cost, and I understand it. If I can make $100 profit off 100 items taking 100 hours of labor, or make $100 profit off of 10 items at 75 hours of labor. I am choosing the 10 items while understanding my market is smaller and many will say it is too expensive, those are not my target market, others see the value. Know your target market.

[@justanazareneleatherco]

This is great advice! I'm glad you are able to customize the spreadsheet to your liking, and I appreciate your insight. All the best!

[@Gunn4u]

Very informative. Great job and great home work. A+

[@justanazareneleatherco]

Thank you. Glad it was helpful!

[@mateiuilie310]

Thanks a lot for the video. Did not know about The profit margin for sure. Thanks for The worksheet as well

[@justanazareneleatherco]

Glad it was helpful!

[@paull9106]

This is good advice

[@justanazareneleatherco]

I'm glad you found it helpful; thanks for watching!

[@akintomideakintoye8972]

Thanks for setting up this spreadsheet, its gonna come in real handy.

[@justanazareneleatherco]

You're welcome! Thanks for watching the video!

[@greapre]

Fantastic Video & great spreadsheet!

[@justanazareneleatherco]

Thank you! I hope it is a help to you!

[@milom.2057]

Excellent video. Very informative.

[@justanazareneleatherco]

Glad it was helpful! Thank you for watching!

[@lestergrigsby594]

great video, really clears some thing up for me, thank you.

[@justanazareneleatherco]

Glad it helped!

[@JoshuaBoyett]

Thank ya sir that was very helpful

[@justanazareneleatherco]

Glad it helped, and thank you for watching!

[@ffotograffydd]

Thank you, this is very useful!

[@justanazareneleatherco]

You are very welcome! Thank you for visiting our channel.

[@RhaniYago]

A really great and helpful video. So many information and points mentioned which are easily forgotton. Pricing my goods is always the most difficult part, but maybe with the "scientific background" of a spreadsheet, it will give me more confidence. Thanks a lot.

[@justanazareneleatherco]

Glad it was helpful! Thank you so much for watching!

[@ytb763]

First off, Thanks for a very informative video and the additional spreadsheet. I use a very similar spreadsheet. Yours is by far cleaner much easier on the eyes. It also gets you the information you need. How do you take into account credit card fees? Most CC companies take a 3% fee from the seller. I find it hard to figure out. I usually just add the 3% on top of the retail price. Thank you!

[@justanazareneleatherco]

Glad it was helpful! Regarding cc fees, I would just increase the profit margin percentage to cover the cost or add a "handling" fee ($2-$3) on your website to cover your cost. Mine is generally covered with the flat rate I charge for shipping. Since I'm centrally located in the US (Memphis, TN), I can generally ship anywhere in the US for $4.50-$6.50, but I charge $9.99 for US shipping. The leftover generally covers my cc fees. Thanks for watching and for commenting!

[@jaguarjim5456]

Great job, Thanks

[@justanazareneleatherco]

Thanks for watching!

[@phillipschris2274]

Great video and very informative. If i were selling to customer directly use the retail price on spreading. If im selling wholesale the retail price on my spreadsheet become wholesale price?. Hope thats not confusing. Thank you

[@justanazareneleatherco]

That's a great question. I have another Business Side video where I specifically discuss Wholesale Pricing using this spreadsheet. That video should answer your question or at least show you how I figure out my wholesale pricing. Thanks for watching and commenting!

[@SP-nx8qx]

Αll right, this is my actual job, I price products for a living :) First up let me congratulate you, you got most concepts right, and most importantly you got the biggest one right: The competition. Always price your product based on your competition. Because ultimately no customer gives a crap about our costs, the customer will always pay what he reckons is reasonable, and how does he know what is reasonable? Based on prices he sees for similar products, ie your competition. Don't get me wrong it is good to have some sort of spreadsheet to keep tabs on your costs, but don't base your price on it. Never. If you do that, it's a certainty that you're either gonna leave money on the table, or you're gonna price yourself out of the market and fail. Both very common with leatherworkers and other craftspeople. So rule #1: always price your products based on the market, your competition. If you have a product that costs you more to make than it sells for, don't make that product. Simple. Make something else. Belts typically have a nice margin. And if you manage to sell for $1500 something that costs you $150 then more power to you, that's what Apple does :) Now I'd like to tell you the 2 most important things: 1. Your spreadsheet has a logical error, it counts labour as a cost, and then adds a profit margin on top. But assuming you work alone, your labour cost IS your profit. You're paying yourself. Congratulations, you're making a living as a leatherworker! By adding a profit on top then you're essentially paying yourself twice, which would be nice I guess, but that's probably for later when you start growing as a business and maybe you have hired someone to help you. For now paying yourself a living salary is already more than most craftspeople can say. One step at a time. 2. To understand your competition properly, first you have to understand what a product actually is. Lets assume that you have three 100% identical leather wallets. Same colour, same leather, same craftsmanship, same everything. One is sold in the Hermes shop in the centre of Paris for $1,000, the other one in an Etsy shop with good reviews for $250, and the third one on a popup stall next to a farmers market for $79.99. Why the difference in price? Because these are actually 3 different products. Because in the consumer's mind, where they bought something and who they bought it from is most definitely a part of the product. It's part of the experience, the story, the justification in their minds for paying a certain amount. You go to Hermes in Paris ready to pay through the nose, but you'd never accept a high price in Alibaba or ebay. "Where did you get this from?" "On Ebay". "Oh, it must be cheap". That's kinda how it goes, isn't it? Also, consider yourself. You have about 300 subscribers and you sell leather notes covers for $50. If you have a hundred thousand subscribers you'd be able to sell the exact same thing for $100 or more. Why? Because with 100k subscribers you are now a youtube personality, people trust you, therefore what you make MUST be good, right? I hope you're getting my point. A product is many things, and when you understand your product you will also understand your competition, and then you will set your pricing wisely and competitively without leaving money on the table. You will also then understand that improving your product doesn't mean improving your stitching, it means improving yourself instead: your internet presence, your shop (online or not), your location, your reputation, and ultimately what a consumer sees when they see you. I have a lot more to say but ultimately this is just youtube. Good luck :)

[@justanazareneleatherco]

Thank you so much for your detailed feedback and for sharing your expertise. The reason I include labor as a cost and add an additional profit margin is two-fold: 1) Most of my revenue comes from bulk/volume sales where I offer discounts based on volume (see my Wholesale Pricing video). Because those discounts cut into my profit margin, I am ensuring that I still get a wage for my time to produce my products. 2) I do not plan to remain a one-man operation, and although my pricing model will have to be tweaked when I hire employees, I already have a portion of the cost going to payroll (labor cost) and a portion going back into the business (profit margin). I am not saying that I am right and you are wrong; I am just sharing my rationale. Because pricing is your job, I will take your advice to heart, especially your second point about knowing my customer and improving myself. I agree 100%! I know I still have a lot to learn, and I truly appreciate your willingness to take the time to share your knowledge with me. I am sure that I will not be the only one to benefit from this comment. Thank you!

[@SP-nx8qx]

@@justanazareneleatherco My pleasure! I hate seeing leatherworkers getting this wrong and ending up working for nothing, but I'm sure you'll be fine as you are ahead of the curve and have a lot of commercial sense already. Best of luck!

[@dannymarkgraf34]

@@justanazareneleatherco your video and spreadsheet are still very helpful to someone like me who is just starting out. i can definitely get my labor cost way down by getting dyes and a sewing machine. but just starting out,it i am hand stitching and hand cutting everything. so my build time will be a lot more then after i build my business up and acquire the tools.

[@scrivyscriv]

I don’t agree that this guy needs to take his channel followers into account for his pricing. If he establishes a set price for his products, even if they are “high” for a guy with a small channel, the perceived value is more important than his channels status. I’ve bought expensive stuff with no big media presence behind the maker, and I’ve bought cheap stuff from giant names. The value is how I perceive it, and I personally don’t care how big a YT is or how many followers someone has. I want a premium item and when I have in mind what I want, I look to guys like this dude and others to set a benchmark price in my mind to know what price range to expect

[@SP-nx8qx]

@@scrivyscriv I understand, you explained your way of thinking when buying something. But when you are a seller it is a mistake to assume that every customer thinks like you and buys the way you buy. You have to understand and analyse their way of thinking, not yours. Are you a tourist looking for a souvenir? Probably not. A mother looking for a quick Xmas gift? A highschool kid competing with their friends who will wear the most brand names? A dude killing time on his phone and not even consdiring buying something? Someone watching your channel because a random logarithm landed him there? No. And yet all those people buy stuff all the time, you have to think how THEY view your product and why it feels cheap or expensive to them, not to you.

[@scrivyscriv]

I can't open the google drive link, I think the firewall on this computer is blocking it. Should be interesting to check it out on a different device.

[@justanazareneleatherco]

If you cannot get it to work on your other device, send me an email at [e-mail], and I will attach the file.

[@scrivyscriv]

thanks@@justanazareneleatherco

[@richardcoverdale1562]

How would you price hand drawing/carving/stamping/tooling?

[@justanazareneleatherco]

This is a very complicated question to answer particularly because I have never sold any hand drawing/carving/stamping/tooling before (because I'm not that good at it yet). But my wife (a graphic designer) suggested pricing this type of work similarly to how graphic designers charge for their design work. She suggested either charging a base price for a job of a specific size and/or complexity, and if the job you get is either larger and/or more complex that your base price, you increase your price according to your pre-determined rate. For example, let's say you offer a tooled leather notebook cover for something small like a Field Notes book for $100. Any work you do of a similar size and/or complexity would be the same price. A customer then requests the same design but for a padfolio. Since a padfolio is at least 4 times the size, you could easily charge 4 times the price. OR Just charge hourly, but give your customers and idea of how long each type of job will take. For example, a tooled wrist cuff takes 1 hour, but a tooled holster takes 2 hours and is therefore double the price. I hope this helps answer your question, and I wish I could simply share what I do, but so far, we do not offer hand tooled leather work. Thank you for watching our video and for commenting!

[@brucewest4163]

Hi can you send me the link for the spreadsheet? This new window in youtube isn't showing it. Thank you.

[@justanazareneleatherco]

I'm sorry that it is not working for you. Here is the link: kzbin.info?event=video_description&redir_token=QUFFLUhqbDVHeDc2V1lBNXNZVTdOYm1HSU1GT1dEM0x6Z3xBQ3Jtc0trTGl0ejFGb3FfWjdpSVJCdU9uQTBzVTJDR0poUjZRSlpBRHJLSm9EUnhrVFZ2OEVFZjlZLWNWQi13TjJlYUR4bW1sd2RnMENkT21zSGtTaXNUUWNram5obUtqS3JpOFdBcEM2U1Y5ZVBuQW1Xd3Q4RQ&q=https%3A%2F%2Fdocs.google.com%2Fspreadsheets%2Fd%2F1Gcj47b00SXwE_sJS__ekDk2slqzr6X_m%2Fedit%3Fusp%3Dsharing%26ouid%3D104983391243159844109%26rtpof%3Dtrue%26sd%3Dtrue&v=Sc-aPe2Elhs

[@brucewest4163]

@@justanazareneleatherco Awesome, thank you. Love the videos, they help alot with this tough question we all fight with.

[@Ms_AP_]

Are you sure it was $60 for a half of a hide (aka a side)? Perhaps it was a double shoulder for that price? Idk that Ive seen $60 sides of veg tan.

[@justanazareneleatherco]

No, I am not, but I know it was a side and it was a sale at my local Tandy more than a year ago. It may have been $70-$80...whatever the price, I know it was cheap. Thanks for watching!

[@dannymarkgraf34]

@@justanazareneleatherco i did notice in your leather pricing video the leather you bought from springfield was a grade b and the tandy leather was a grade c. i am assuming the leather grade will also increase the cost of the leather.

[@scrivyscriv]

I’m not sure I agree with your pricing model, although it seems pretty well thought out I just don’t see it being scaleable. Have you even been doing leatherwork long enough to see what the long term market for your products really is? You really don’t want to box yourself in to a pricing model that limits your ability to expand out, like franchising the business, or even just dealing with big contracts for example on the state level. All kinds of opportunity out there

[@judahhorst1673]

You obviously know nothing about leather or leather tradesmen. The pricing is an exact science that you constantly have to be tweaking and expanding your knowledge on. That you would comment and thus expose your ignorance is preposterous.

[@justanazareneleatherco]

Thank you for your feedback.

[@toddkamuf6814]

Lol, it’s a spread sheet!!!

[@justanazareneleatherco]

Nothing says "I care about you" like a spreadsheet!!!