Pricing Calculator

I agonize over pricing.  

Like the roots of the word (οδύνη, agōnia, relating to "struggle" or "contest"), whenever I price a bowl, two sides of my brain duke it out.  Did I overcharge, embarrassing myself by assuming my work is worth THAT MUCH!  Or did I charge too little, devaluing my efforts (and myself?) and basically announcing to the world that my work is crap.  Back and forth I go, until exhaustion sets in and I settle on some arbitrary price to get the transaction over with.  

Honestly, pricing craft reminds me of grading papers when I was new to teaching.  When I was a rookie, I would study a student's submission until a grade popped into my head. "This feels like a B+," I would think. "Not quite in the A-range, but close."  But then I would look at other B+ papers and see how different they all were.  "This one is thoughtful, but mechanically poor, but this other one is well organized and lengthy, though its argument is not particularly advanced..."  Arg.  What is the relative weight of each grading category in determining the final grade?  

Of course, the answer for a new teacher is a rubric, one that assigns relative weight to each quality you are looking for in a piece of writing.  This takes some, though not all, of the guessing out of the process, and allows you to see each quality separately.  At the end of the day you still have to assign a grade, but now you have a clearer justification for that grade and so you spend less time agonizing.

Maybe I need "pricing rubric?" 

There are lots of craft-pricing calculators available online and many books about pricing craft.  I have certainly not looked at them all, but the ones I have seen stick to a standard line: first, add the cost of materials to the hourly wage to make the thing; then add in 10-15% for overhead; finally, double that, and you have your wholesale price.

But these calculators do not get at the quality of the work; they assume a piece is only an expression of time.  But how much is a bowl intrinsically worth, given its various qualities: size, grain pattern, shape, adornment, etc...?  How do I fairly gauge the value of the product in terms other than time?  This is important for me, because once I have a clear sense of a product's actual worth, then I can work ways to streamline production and make it profitable.  

To help me think through this question, I use Google Sheets to create a sort of pricing algorithm that estimates the price of a bowl. I am also using this for inventory, accounting, and customer information, though Square and Etsy provide some similar services so I may switch.  But this is free and works for me, and maybe it will help you. 

Here is the (geeky) thinking behind the sheet.  Thanks to Richard Raffan's book Turned Bowl Design for some of these ideas.  If you prefer a video explanation, skip to the end of this post.

First, multiply the diameter by the height to determine the bowl's size.  Then you multiply that number by some sort of factor (let's start with a factor of 3 for argument's sake).  So, if we had a 6" x 2.5" bowl, its base price would be $45.  (6*2.5)(3)=45.  Of course, you could adjust your factor if that base price seems off.  

Does the formula work with larger bowls?

• How about a 10" bowl that is 4" deep: (10*4)(3)=$120.  
• Or maybe a 12" bowl that is 5" deep: (12*5)(3)=$180.  
• Even bigger, a 16"x6" bowl:(16*6)(3)=$288.  

This works pretty well, but my sense is that large bowls command prices above what this formula would suggest.  Would that 16x6" bowl would go for more than $288?  If so, one way to solve this is to make the factor exponential.   Instead of using a factor of 3, multiply your dimensions by an exponent so that prices "accelerate" as the size of the bowl increases.  To do this in Google Sheets, if your bowl size was in cell G3, create a new column and use this formula:  =G3* EXP(1.15). With an exponent of 1.15, our prices would look like this:

• A 6"x2.5" bowl = $47 (instead of $45)
• Our 10"x4" bowl = $126 (instead of $120)
• The 12"x5" bowl= $190 (up from $180)
• And the 16"x6" bowl=$303 (up from $288)

Of course, you could adjust the exponent (in this case, 1.15) to whatever you wanted.

How much should you add to the price of a bowl if it is painted?  You could just create a checkbox to add a set amount to the base price, but larger bowls take more paint and more time to paint.  The solution is again to add value exponentially, as we did with size.  

I also like having a column for what I call "awesomeness."  If you have a piece that really stands out, use this column to bump the price even higher.  If it sells, you will feel you definitely got what it was worth.  If it does not, you have it as inspiration for the next production run.  

Here is a video to walk you through making your own pricing calculator/inventory list/customer database.

Update Aug 26, 2022.

Some have asked for a copy of the spreadsheet.  Here you go.