Pricing creative work

[Gordon N]

I have been looking at my pricing structure of late with a view to better positioning myself and my business in my industry marketplace.

As part of the research on this I have read a number of articles and blog posts by some of the web design industry's leading characters. I have discovered some great tips and suggestions for calculating my hourly/daily/project rates more efficiently, and more importantly how to justify my fee.

One story that proved very helpful will remain in my head whenever I am working on a project proposal or quote, this is one worth sharing I believe...

Legend has it that the artist Pablo Picasso was once sketching in a park when a woman approached him and asked him to draw her portrait. Of course, she was going to pay him, so after agreeing they sat down and after a few moments of study - Picasso used a single pencil stroke to capture the woman's likeness.

"It's perfect," she said. "You've managed to capture my essence with one stroke, in one moment. Thank you so much. How much do I owe you?"

"Five thousand dollars," Picasso replied.

"What! But it only took you five minutes!" she spluttered.

"Madame, it took me my entire life," he answered.

This should go some way to explaining why professional designers and creatives charge what they do, and hopefully inspire a greater understanding of what you are paying for.

As an added bonus it shows what the '£100 for a website' cowboys really think of themselves, their experience level and the standard of work they produce!

Food for thought I am sure you will agree?

 

[stugster]

Food for thought I am sure you will agree?

Without a doubt mate. And it doesn't just apply to designers or those in the creative industries!

I've had people give me funny looks when I tell them how much "it's gonna cost you". For the bog standard client, I'm not going to go out of my way to give you fantastic discounts on IT Support, why should I?

Knowledge is power, and that's one of the main things (note: one of) that the client is paying for.


Good post mate

 

[Former Member 1]

As an added bonus it shows what the '£100 for a website' cowboys really think of themselves, their experience level and the standard of work they produce!

The Picasso story is of course well known, and hits the nail squarely on the head. People very often don't know or appreciate that the final execution of a creative product is just a tiny part of the creative process. 'Anyone' can pick up a pen and draw; how well is another question. But often the very fact that it's something seems 'do-able' devalues it in the mind of the general public...

My Father was estranged as I was growing up and I didn't meet up with him 'till I was in my late 30's... On meeting him, I was both pleased and bemused by the fact that he too had a small business ...signwriting; he'd bought one of those computer driven plotter machines. Didn't seem to be too busy though; but as he explained, he was semi-retired... As time went on it became clear to me that this 'business' of his was doing nothing. What's more I found myself in the difficult position of being unable to recommend his work to anyone, as clearly he had no understanding of graphic design...

He blamed the guy who had sold him this 'business in a box', as the claims made for it were clearly ridiculous. I had to agree with him to an extent. The 'package' had been deliberately mis-sold. Despite the fact that it's possible to learn how to operate the plotter in a few hours. And with a couple of days practice apply the vinyls reasonably well; It actually takes years to get good at it! Then there is the fact that when these machines first popped up they flooded the market. Suddenly there was a 'signwriter' every two streets, none of 'em any good and all of them trying desperately to undercut each other....

And of course there is a limited market for emblazoning vans with garish, wonky, often mis-spelled blobs of sticky-backed-plastic. :crying:

Although I think the people who sold these ‘business opportunities’ are nothing short of two-bit cowboys; equally well the people that buy into these ‘get rich quick’ schemes are damned fools. Though it’s easy to see how, through ignorance, people are duped in to buying from these characters...

Business... Any business, basically boils down to one or two activities and one of the most important of these is managing risk. And of course by risk I don’t just means physical or financial peril; but risk in the broader sense.. That projects may fail, return on investment might not meet requirements; that failure to met regulatory or legal requirements places the business at risk from litigation etc....

Leo Burnett who created such icons as the Jolly Green Giant, the Marlboro Man, the 7up “Spot”, and Tony the Tiger also created an icon of a ‘hand reaching for the stars’, which he explained by saying, “When you reach for the stars you may not quite get one, but you won’t come up with a handful of mud either”.

Reaching for the stars, TRULY, reaching for the stars is essential to make your business grow. Merely aping those who are reaching out is more likely to see you topple over face down in the mud! Any business person who does not realise this runs the very serious risk of facing failure.

I often find myself taking exception to the ‘glibilisation’ of business practices. The ‘one size fits all’ ‘magic bullet’ solutions that are touted about by people who’s main business is simply the selling of good old fashioned ‘flim flam’. As much as the pseudo-evangelistic claptrap the spews from the vents of these people is irksome it’s also dangerous.

The truth of the matter is that there are no ‘magic spells’ or shortcuts when it comes to doing business. If you need something done, and you don’t have the skills or equipment to do it in-house then you need to buy these things in. And the simple fact is that anywhere beyond the most superficial level of skill is something that requires years of hard work and dedication to acquire....

Individuals only walk the earth for a limited time. And whilst it’s possible to gain a modest level of proficiency in a small number of things, it’s really only possible to master one or two... There just aren’t the hours in the day for it to be otherwise...

It is then, quite frankly, very stupid to buy into the notion that someone who is a master of their craft is prepared to sell that lifetime’s skill short...

Certainly, cut away the frills and you can find creative services being made available at very low prices. But the reality is there’s only so much ‘baggage’ can be thrown away before the integrity of core service is what’s compromised...

The problem with the web design trade is it’s LITTERED with cowboys... It’s devalued the trade. The legitimate operators in the creative industries have to be more protective of each other. And that means just freezing these characters out as far as possible... You'll find that in other sectors there is a quiet 'underground' grapevine which ensures individuals who try to 'blag' their way in to the industry get frozen out...

I (for instance) just don’t accept work from agencies that go down the ‘jack of all trades’ route; nor would I put work their way... I don’t buy services from people who ‘moonlight’ as something else... Although when asked personally I’ve been known to accept the odd stills assignment and I do some editorial photography, we don’t offer any commercial photography... (We’re not really equipped for it.)

And I think therein lies the key... DISTANCE yourself from the cowboys; and don’t be afraid to ‘out’ them.. Don’t supply them. If I’m asked to research a web designer and I see someone doing everything and anything from photography through graphic design and print to hosting and SEO... I blackball em!

And most of all; DON’T be afraid to charge what your work is worth! It’s the classic ‘£2 for a sandwich’ scenario.... Who here is so stupid they don’t understand why a sandwich containing 15p worth of ingredients costs £2 wrapped up in clingfilm at your local shop?

And yet I can almost guarantee you that as you que for your lunchtime sarnie tomorrow you’ll hear some Muppet moaning about it! And another who reckons they could do them for 50p.....

Botulism on Rye anyone?

It's a risk most people would manage to avoid. And yet so many are prepared to take with their businesses...

 

[Gordon N]

Fantastic response Matt, thanks!

Having now produced the first quote since reviewing my fees I was sitting here staring at it and hesitating to hit the send (and print) button. For all my hourly rate has not changed drastically, the way I calculate project costs has - and from now on I have a better chance of preventing the dreaded underquote, a killer of many small creative businesses.

I have confidence in my abilities and have been involved in web design and development in some way shape or form for the last 13 years, yet I still have the occassional urge to to at least match my local competitors on price if not beat them. This is daft, as I am only sitting as part of the pack (with many cowboys amongst them!) rather than rising above them and offering a better quality professional service at a sensible but realistic price. The end result is I don't earn enought to cover the cost of developing a product to the quality I would ultimately desire. :001_rolleyes:

The major problem is a potential client's lack of understanding of the web development industry, which isn't really their fault. As you have said before, to many it is an 'anyone can do it' industry which frankly couldn't be further from to truth. It is unfortunate that many of these potential clients go into the tender process blind to the truth, not getting past the the numbers on the quote before picking the cheapest agency and getting a substandard solutions as a result.

The reason for my review is that I am keen to push the business forward and grow, something that I now see is impossible if I keep worrying about 'Flim Flam Tam' designing cheap websites in his spare time for a couple of hundred quid pocket money! I will take heed of your advice to blank such characters and focus more on continuing to build my reputation, carefully. I will also be following the advice of some of the articles I read concerning my choice of client, after all the design process is a two way street - many like me fall foul to a couple of poorly accepted clients who over demand or fail to pay on time (if at all). This though may come down to that lack of understanding again. :confused1:

This thread, along with some others here on SBF have provided me with some greatly appreciated inspiration, ideas and advice which will all be put to good use as I continue my quest to make a name for myself within my industry and provide my clients with a quality, professional service and results.

, expect some blog posts soon! Where better to try and help businesses of all stages and sizes better understand what they should look for when selecting a designer/agency, and just as importantly what to expect from the design process as a whole.

Thanks again

 

[johnthesearcher]

Excellent responses to Gordon's original post.

It's true that we get paid for bringing value to the marketplace (aka .....reality) and sometimes clients need to be reminded 'that we don't get paid for the TIME but rather for the VALUE we put into the time'

John (aspiring Picasso)

 

[Former Member 1]

It might be worthwhile examining who's hiring "Flim Flan Tam" :laugh: and maybe trying to work out why...

Dunno if it'll help but I'll explain a little of why I target the sector I do...

About 1996, just shortly after my daughter was born, I took my business through a complete change of tack. Clydeside Television;(which was the only brand we were using at the time) had over its then 10 year history, been a fairly conventional corporate production company. And we had also been fairly successful in drawing in broadcast work. The nature of high-end corporate work is that it can be fairly sporadic. Though over the course of a year cashflow was very much positive, actual work tended to be rather 'boom and bust'. We had lots of downtime; people doing 'homers' in the workshop and freelancers sitting at home doing nowt and not getting paid...

Fairly early on in the company's history I had introduced a number of low cost 'package' deals to absorb this downtime... These caused a few raised eyebrows. They depended on the customer fitting around our schedule rather than the other way around. They were also devastatingly cheap! Strict control over timing and VERY strict credit control made that happen... But as I saw it then, the main business was in the 'blue-chip' sector... Higher end corporates are usually in the £10K-20K bracket with some easily billing up to £40K. Such business takes a LOT of courting. And involves keeping up facilities and staff that actually add nothing to the final output... A 5000 SqFt Unit, clerical staff; the need to run new and fairly flash cars; expensive promotion etc...

BY '96 though I'd found that the lower end 'filler' material was accounting for over 50% of the turnover... And that much of the profit was actually being absorbed by the premises, the cars, Ikeas sofas and leggy brunette on reception... (what can I say? I'm no gentleman :laugh Stress was also a big factor in this; and frankly it was killing me! And I had a new baby daughter to be there for... SO! TFGtv was 'created' as a brand and the low budget work hived off to that brand. Clydeside carried on with the high end stuff for a while, that was gradually wound down, leaving it today with only the wee bit of broadcast work....

Now; TFGtv DOES compete on price. On our 'no frills' package we're about 1/4 the price of the nearest comparable (in terms of experience, procedures and output quality) firm, and we have packages as cheap as £350... The latter is a bit of a 'loss leader' in which respect it works quite well... Overall we're typically about 45%-60% the price of a comparable mainstream corporate production house depending on the complexity of the job.

The lack of fancy offices, flash cars and of course the leggy brunette :crying::crying: means that we no longer provide the 'full corporate experience' for those who like their video production companies to be 'sofa driven'... And though my own reputation is such that high end work has not dried up it's not something I chase...

That 'middle ground' that I do chase IS affected by cowboys... In fact the reason I do relatively well out of it is that there is relatively little credible competition...

SO! DO I worry about Flim Flam Tam? ....Not really, though he's kept on the radar and I'm pretty intolerant of him and his cronies... And there is an 'education' job to be done as far as the buying public are concerned. Which is the 'why' for the Rottweiler tendencies I sometimes exhibit... :laugh:

This is where the similarities with your own situation come into play...

As you say; many will look at a tender and just run with the numbers. And frankly this is a truly idiotic way of buying in a creative service. and if someone asks me to quote to tender I'm arrogant and awkward enough to tell them no and the reasons why not... Likewise I won't 'pitch' for work in the conventional sense; the process can become far too time-consuming and drive up the cost of sales... If people are dumb enough to just run with tendered numbers they're probably dumb enough to buy one of those Botulism sandwiches then try and blame the stomach cramps on the five star Italian restaurant they visited last July... There's a good chance they'll be bother...

....As you say; choice of client!

I'm very strict as you know on IPR management. Likewise we have VERY strict H&S policies (very necessary for location work) and planning procedures...

Now, I dare say you'll have had the specialised project management principals that apply to your craft nailed into you. But if you've not already done so look at broader project management principals as they're more conventionally taught in business classes....

Relating your own procedures to broader principals has two effects... Firstly it provides a 'common currency' for (informed) clients to latch on to. Secondly it opens up the opportunity to use the project milestones as client approval points.

The other thing is to have a deposit and stage payment system that minimises potential losses...

There exists a 'band' of very serious SMEs... Classic small family businesses, where people understand that need for thorough professionalism. They know it's not appropriate to just 'ape' larger businesses, but to take them on at their own game... And THAT is where the business is!

Flim Flam Tam and the 'corner shop mentality' crowd that make up his clientele will always exist. There will aye be some chancer desperately offering to do anything for anybody and pretending they are what they're not. Likewise there's aye some "Dell Boy" type who thinks all they have to do is ape what's going on in the real world of business to get on...

Leave em to it!

 

[Canary Dwarf]

... If I’m asked to research a web designer and I see someone doing everything and anything from photography through graphic design and print to hosting and SEO... I blackball em!

That's a bit harsh Matt, some of us web designers started out in print, but had the foresight and desire to diversify. Design is design after all, and professionals adapt their skills to the medium.

Twenty years ago, we would paste-up artwork, make a negative, process it in chemicals, make a plate, process that in chemicals, then print it. Today, you send your finished file straight to the platemaker, three steps removed. In this day and age, people have to learn new skills to stay in employment. If they can continue to make use of their old skills too, great, people with more skills are more employable and that applies to business too.

Hosting is a value-added service that some web designers offer, some don't. But in the case of small businesses, especially ones who do not understand where the divide comes between hosting and development, it makes sense to provide the service.

 

[Former Member 1]

Not harsh at all Marc... And I did say "someone doing everything and anything"...

It's reasonable for people to be to some degree multi-skilled, but a professional knows their limits. It's simply common and commercial sense. And whilst relatively few people will be as open as I am about it's pretty much the norm...

I actually DO hold the qualifications to call myself a stills photographer. And, oddly I'm also well enough qualified in web design to be allowed to teach it to Level 8 (HND). I'm frequently asked to shoots stills and design websites for my clients, but I don't offer those services and always pass such work on to others... Why?

On a commercial level I'm not properly equipped to provide a full, effective stills photography service (although I'm far better equipped than many who do moonlight in this field) and if I'm honest I don't really have the commercial experience either. As far as web design is concerned I lost interest in progressing my skills any further about five or six years ago. And again I don't have the experience. The bottom line is that, despite having some of the skills required I would be mis-representing myself were I to offer either service on a commercial basis.

Diversification is one thing. Moonlighting is quite another.

It also so-happens I'm pretty handy with a set of spanners having been dabbling with cars since I was a kid. I can weld, spray paint, re-build engines and have restored a couple of classic cars, built a few kit cars.... In fact as far as possible I do most of the day-to-day maintenance of my own cars and am pretty well up on the subject.

But if I set up a garage tomorrow WOULD you bring your car to me for repair?

Actually it's doubtful whether I'd get the insurance to run such a business on my own. And you can be sure that once the trade got wind of what I was up to I'd soon find suppliers backing quietly away from me.... The public too... How would you feel about paying money for your better half and maybe your kids to be running around in a car, the brakes of which were fitted by someone who's only training in motor vehicle technology came out of a Haynes manual? The truth of the matter is that (although there's no law against it) I'd have no right to call myself a 'Motor Engineer'. As well as poaching work from people who HAD worked to earn that right there is the very REAL danger of me only knowing half the job...

My own cars incidentally go to my friendly neighbourhood garage for final adjustment and a check over once I've done anything major to them. And I'm yet to 'get it wrong'. BUT because the simple reality is that I'm NOT a mechanic, and despite working conscientiously, carefully by-the-book, the FACT remains that there is a danger in my only knowing half the job! And that risk can only be mitigated by seeking seeking the advice of a legitimate professional...

You talk of the way things were 20 years ago.... Back street garages run by 'cowboys' who'd learned their trades off the back of a fag packet were once almost the norm as far as the independent garage trade was concerned. And it very nearly killed the trade! Honest garages were tarred with the same brush as the cowboys, and the net result was that the whole independent sector was in recession while the rest of the economy was expanding!

These days you'll find professional motor engineers are VERY keen to distance themselves from the cowboys...Some fairly protectionist attitudes exist.

The creative industries can learn a LOT from the motor trade in this respect. The way in is through the front door (i.e. proper training and qualifications) and (say) a valeter who suddenly starts passing himself off a coachbuilder will quite quickly find he has no cars to wash ....and no coaches to build either!

Of course cowboys haven't been eliminated; but the legit trade is VERY intolerant, and quite rightly so...

Web design in particular is pretty much where the motor trade was 20-something years ago.

Yes; design is design. But design isn't engineering or copywriting, or project management or computer programming or marketing or PR or.. Witness; the number of 'very-cleverly' coded websites out there that look just bloody awful! And the number of oh-so pretty ones that just lock up your browser or take so long to load you've forgotten why you clicked o them in the first place (yes; even in these days of Broadband et al)

Moonlighting does a few things....

1) It takes the bread from the mouths of legitimate practitioners; damaging the trade and eventually depleting their numbers...

2) It produces a generally inferior product; and subsequently calls the product into disrepute....

3) It can expose the client to serious risk....

4) It de-values the core activity...

And if you doubt any of this just have a think about how many web designers are struggling against a marketplace saturated with cowboys. Think about the public perceptions of web design; the notion that it's something that can be trusted (as one designer related) to '14-year-old nephews'. And think about the people who have found themselves is serious trouble because some half-assed cowboy didn't even KNOW they had IPR to clear before they could use a piece of material....

I'm quite happy (very keen in fact) to work with people who realise the need, across the creative industries, to collaborate and drive quality standards up. But I'm equally keen to fire as many flaming arrows as I can at those cowboys who routinely claim to be something that they're not; and that's simply because they're calling the creative industries into disrepute.

 

[Gordon N]

I have to say I am with Matt on this one.

I have a vision for my business that extends well into the future, if I have any chance of achieving my goals I have to build a spotless reputation and authority in my field. I don't think it's possible to build authority in a number of fields together, it all ends up smelling a bit 'jack of all trades...'

When I started MWS I had all sorts of extra services listed on my site including IT support, SEO Consultancy, Domain Names & Hosting (as a standalone service),Social Media Consultancy (yeah I know - more cowboys!! haha! ) and a couple of others to boot. I have experience in each of these fields to some degree, but I want to be known as professional Web Designer/Developer before anything else - I certainly don't want to be associated with some (I said some!) of the SEO crowd! There is a bad enough 'cowboy' reputation kicking around in the web design world already without inheriting some from the SEO mob - might as well wear a silly hat, start a campfire and get a horse!

I try to answer any questions asked on these subjects by current/potential clients to the best of my ability, but I always make sure they know where I stand. I would rather refer them to a friend or associate who specialises in that field as I believe that is what customer support is all about - looking after your customers interests.

For all domains and hosting still carry a mention on my site they are there purely as part of an overall design/development package. I would not dream of advertising set hosting plans or domain name prices - it's just not what I do.

I am on a particularly steep business learning curve right now, and enjoying it greatly. Things are beginning to make more sense and the bigger picture is becoming a lot easier to manage by simplifying my offerings and focussing on my core services. These are all part of the survival process for small businesses just now, or so I believe. I certainly don't have the time and resources available to keep myself current and up to date in all these areas to offer a level of service that I would expect to receive myself, as a paying customer. That's what networking is for, end of!

 

[jimbairn]

The Picasso story is of course well known, and hits the nail squarely on the head. People very often don't know or appreciate that the final execution of a creative product is just a tiny part of the creative process. 'Anyone' can pick up a pen and draw; how well is another question. But often the very fact that it's something seems 'do-able' devalues it in the mind of the general public...

Been there, done that....

 

[Former Member 1]

Actually one thing to mention is that it is perfectly reasonable to act as a a co-ordinating agency where you're drawing a number of different sources together.

And if someone needs IT support or photographs are required then you simply broker those services. We, for instance, fairly often work through PR or Advertising agencies; and of course they get billed at agency rates which allows them their own markup...

Being able to arrange for a dozen different things to happen is part of the job. But unless you're dealing with a big company that keeps appropriate pros on staff and has huge resources...(In which case you'll be paying top dollar to cover their huge overheads) :001_rolleyes::001_rolleyes: .....A big long string of disparate 'services' being offered directly by a small business is always suspicious to the point of being just 'not credible'.

Worth mentioning too that even if you do seem to be dealing with a big firm, it's worth checking that they actually are what they say they are!

We came across an example recently of an apparently fairly large concern which was registered at an address that had been re-possessed by the bank! Was operating from a rented house just outside Edinburgh, had partially occupied (but not paid for ) semi-furnished office space IN Edinburgh ...And who's 'London Office' was no more than a VOIP line...

The multiple addresses and phone numbers and the string of 'services' carried out by this supposed 'team' of individuals was impressive... The reality was some possibly mentally ill bampot with a laptop and a collection of folk (who now include HMRC and Companies House) chasing him...

 

[Gordon N]

Actually one thing to mention is that it is perfectly reasonable to act as a a co-ordinating agency where you're drawing a number of different sources together.

And if someone needs IT support or photographs are required then you simply broker those services.

How ironic as I have just arranged for a photographer for a client today!

In many cases a website is only as good as the images it contains, I would far prefer to send in a photographer I know and trust to produce images that will work for the site than anything else! But it also goes towards boosting the services that I can offer.

Pulling in external resources can enhance all sorts of aspects of your business - and places like SBF are a great place to meet potential suppliers of such services.

 

[Gutsy]

This is a very interesting discussion, thank you everyone. And it bears out a point that I myself have been discussing with colleagues here. One person I know feels that she would sell herself short and allow herself to be negotiated down (to a ridiculously low price, IMO) to get what she calls a 'guaranteed' amount of money, for a ridiculously large amount of money every month. My points to her were:
- This almost amounts to slave labour and is just about a sure way to bring on burnout, which means that you cannot give your client your best service.
- If you allow a client to do this once, you are going to have no end of a battle on your hands the next time they want to do it, and you don't want them to.
- If you go too low, you can't outsource, and if you have other clients and this new client suddenly decides to send the volume that they've promised, what about your other clients?
- The amount of work you take on has to be manageable no matter how much is 'guaranteed', whether by manageable you mean you are going to do the work yourself or outsource it.
- There are no guarantees in this day and age - they may say they guarantee the work, but nobody can, can they? Who can guarantee work?
- Underquoting is bad for the others in the same industry and bad for the reputation of the industry as a whole (obviously, overcharging also is, but that's a different story altogether).

 

[Former Member 1]

This is a very interesting discussion, thank you everyone. And it bears out a point that I myself have been discussing with colleagues here. One person I know feels that she would sell herself short and allow herself to be negotiated down (to a ridiculously low price, IMO) to get what she calls a 'guaranteed' amount of money, for a ridiculously large amount of money every month.

I assume this is a company wanting to 'outsource' work to her? A ludicrously large volume at a ludicrously low unit price equalling a relatively large monthly sum?

My points to her were:
- This almost amounts to slave labour and is just about a sure way to bring on burnout, which means that you cannot give your client your best service.

Absolutely; what's more as you cave in to the pressure you need to erode some aspect of the service. And (particularly as a freelance) erosion of time that should be reserved for personal purposes.

Yes; it IS possible to work (for instance) 18 hours a day @ £10 an hour and draw in £900, but count the cost of that in physical and emotional damage to yourself and your relationships as well as the overheads (i.e. power, machine time etc). PLUS factor that you will have to erode aspects of the business such as book keeping, marketing etc... Perhaps even some secondary and tertiary aspects of the service itself.

As I constantly have to remind new students; There is no such thing as "free" time when it comes to carrying out one's professional duties. Sooner or later, somewhere or another, you WILL have to account for it!

There is no getting away from the fact that reducing the unit cost of anything means paring away at the what's provided. Now, in my own example as outlined above I've peeled away everything that isn't necessary to carrying out the core activity to a basic secure standard of competence....

Yes, you CAN get the price down lower, but to do so requires essentially making the service unsafe... Doing that is neither honest or competent. And frankly smacks of the same sort of desperation which we've been reflecting upon in terms of rogue web designers and other creatives....

- If you allow a client to do this once, you are going to have no end of a battle on your hands the next time they want to do it, and you don't want them to.

- If you go too low, you can't outsource, and if you have other clients and this new client suddenly decides to send the volume that they've promised, what about your other clients?

- The amount of work you take on has to be manageable no matter how much is 'guaranteed', whether by manageable you mean you are going to do the work yourself or outsource it.

Again, very good points well made. Your first point here reflects upon the erosion of perceived value within the client base, which is an issue that, if allowed to fester, can cause the implosion of an entire sector.

IF people are prepared to do this then the only real answer is to differentiate and distance yourself from them. And ultimately actively reject them. Don't pass work to them and don't accept work from them.

- There are no guarantees in this day and age - they may say they guarantee the work, but nobody can, can they? Who can guarantee work?

Echoes of the old 'envelope stuffing' scam?

If they want to back their guarantees up with a realistic retainer maybe ....In which case why wouldn't they just take someone on staff?

 

[Gutsy]

I assume this is a company wanting to 'outsource' work to her? A ludicrously large volume at a ludicrously low unit price equalling a relatively large monthly sum?

Yep ... very much so. A one way street to burnout IMO.

Yes; it IS possible to work (for instance) 18 hours a day @ £10 an hour and draw in £900, but count the cost of that in physical and emotional damage to yourself and your relationships as well as the overheads (i.e. power, machine time etc). PLUS factor that you will have to erode aspects of the business such as book keeping, marketing etc... Perhaps even some secondary and tertiary aspects of the service itself.

Yes. To meet volumes such as she wants to meet, something's gotta give - and quality is usually one of the things that gives - creating a bad reputation for yourself, etc, etc. A lose lose situation all round.

You're right about distancing oneself Matt. I feel people like this are damaging to our industry which is why I try to advise ... but there just isn't the time to keep saying it over and over, I guess maybe they will learn the hard way?

 

[The Old Bat]

This is a really interesting thread - fantastic responses. Pricing is an area that I have really struggled with. I am currently embarking on a new business venture - making jewellery.
When I first started trying to price pieces I used to think "OMG ... I can't charge that! No-one will want to pay that much". I have since found out that my prices, whilst now are realistic, people will pay for your product if they like it enough. Don't get me wrong, I don't charge exhorbitant prices for my jewellery but there is absolutely no point undercharging - which only seeks to undermine yourself, your products and other designers and does little for the integrity of your business.

I have decided that I do not want to sell my pieces in craft fairs - as a lot of the potential customers who attend these events often want to pay as little as possible. I work mainly with semi-precious stones and sterling or fine silver and as I source the best quality components I can, they don't come cheap. I do not want to sell my pieces at any price I can get .. if I don't value my skill, how am I going to encourage customers to do so.

Pricing jewellery too low can have the effect that no-one wants to buy your pieces, as their perception is that there must be something wrong with it or it must be of inferior quality. I cannot compete with high street stores who can sell a simple bracelet for £5 and I do not want to. My jewellery is of excellent quality and with care will last for years, not something will break after a couple of times worn or that you throw away at the end of the season. I think the important thing is to have confidence in your product/service and to charge accordingly.

Bev