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Pottery - What to Charge for Pottery Work

Expert: Ti Phillips - 11/3/2009

Question
Ti
I am a hobby potter who has finally gotten good enough not to be embarassed to give her creatoins away as gifts! I also have a few pieces at a store in my small town but they don't seem to be selling well. It may be that the people coming in there are not looking for pottery (it is acutally a furniture store)maybe I have them priced too high (the store takes 50 percent commision) or maybe they just aren't that good! Howerver, I did a home show last year and sold quite a few things. Not much profit though after it was all said and done. I am wondering if there is a "magic formula" for pricing things. I am an average potter as far as finished products looking professional but I am still fairly slow (making 6 mugs in an hour is pretty good for me) so an hourly rate of my time, firing time etc. doesn't make sense. but you can't discount the time it takes to add handles, lids embelishments... For example a vase should cost less than a lidded jar or mug of similar size because they are more work... I don't want to cheat myself or my clients. If you have any insights it would be appreciated.

Answer
Dear Terri,

    Thank you for your recent question. Pricing ware depends on several factors. Quality, of course, is the first factor in determining whether a piece has the potential to sell. This is usually determined by the potter or someone the potter trusts to make an accurate determination on the quailty of the work. Cost of production, which includes every component used to make the piece, fire and of course the potter's time involved is a second method to determine the selling price of a piece. The potter often will price the item somewhere in between the two.

    Identifying quality in a piece is sometimes difficult for the potter who created it, but not impossible. The potter may also use a trusted friend, family member or collegue to help answer the following questions. Use the questions below when determining if a piece is worth selling and to classify it in a range that with help you price it.

    Determining Quality of a Pottery Piece:

    1. Place the piece in question on a table with a bare wall in the background. Select several additional pieces of like design near it. Step back and take a look at the piece. Ask yourself:

         a. Does this piece make me want to pick it up and examinine it more?
         b. If this piece were in a store, would I notice it?
         c. Does this piece stand out from the others or is as good in design as the others?

       If you answered yes to any of the above, you have a potentially good piece to sell.

    2. Think about what you have paid for a piece like this in the past, or why you didn't purchase one like it in the past. For instance, we have all been to a store that has pottery pieces for sale. We may have come across one piece that stood out and we considered purchasing. We may have purchased the piece or not, but one of the considerations was the price of the piece. Put a price, any price on the pottery piece you are trying to price. Ask yourself the following:

         a. Would I pay this amount for this piece?
         b. If not, why?
         c. If not, what would I be willing to pay?

       Now that you have a potential price for the ware, write it down and prepare for the next step in pricing a pottery piece.

   Determining Cost Production of a Piece

    When pricing using the Cost of Production method, every component must be considered in the over all cost of making the piece. This requires keeping a detailed list of the cost of materials, utilities used, equipment wear and tear, and the potters time. Although this may sound very complicated and time consuming, it is simple to use once the potter has recorded references to each component.

         Cost of Materials:

              1. When purchasing materials, it is recommended that a record be kept of the cost of the material and a breakdown of how much the material will make in production. For instance, a 25lb bag of clay can be divided into 25 one pound balls to be used in production. Or, if making smaller items, it can be divided into 50 one-half pound balls. This is a good starting place for determing the cost of clay.
              To determine how much is used in production, take the cost of the clay and divided the cost by 50 one-half pounds. This will be the unit cost to use when determining how much clay is used in a project.

                   Example:

                        $25.00     Cost of clay to purchase
                         / .50     How many 1/2 pound balls of clay in the package
               TOTAL       .50     The cost per 1/2 pound ball

              To use this calculation, when you make a piece of potter, determine how much clay is used and multiply it by the cost per 1/2 pound ball of clay. This is the cost of materials for producing a piece. Do this for every material that has been put into the pottery piece then add up all of the cost of materials.

               2. The cost of utilities is more detailed, but can be calculated using the following:

               Determine how much it cost to fire your kiln. Look on your electric bill and find the cost per kilowatt per hour. Time your kiln and multiply the kilowatt cost by the number of hours it takes to fire your kiln. This is the cost to fire. On your next firing, count the number of pieces in your kiln. This will be a rough estimate on how many pieces can be placed in the kiln. Divide the number of pieces by the cost to fire and the answer is the estimated cost to fire a single piece.

              3. The time involved in production is often the most costly in the pricing of a piece. This amount is basically determined on your worth in work. Although determining this amount is often difficult for a potter because there is no real reference to what a potter should be paid for their hourly work, use the national wage figures to calculate the cost to produce a piece. Remember that when you work on a piece, you are most likely working on several other pieces at the same time, therefore, you are actually completing several pieces during a working schedule. Also remember that if you feel your wage worth is more than the national wage, add to this figure. A common reference is to add 5% over the national wage for every year you have been selling your work.

              Let's assume you are working on 10 mugs at the same time and it takes one hour to throw 10 mugs, 1 hour to attach handles for the 10 mugs, 30 minutes to load, watch and unload a kiln for 10 mugs, 1 hour to glaze 10 mugs and another 30 minutes to load, watch and unload a kiln for the glaze firing of 10 mugs. In total, you have worked 4 hours to produce 10 mugs.

              Now, to figure how much real time you spent on a single mug, divide 10 into the total number of minutes, in this case 240 minutes spent on 10 mugs. The actual time spent to make one mug is 24 minutes. Multiply this by the wage factor and you have what your time spent on the mug in wages.

    To finalize the cost of production, add up all of the above figures to find out how much it actually costs to produce one mug.

    An example would be the following:

               Cost of clay                .50
               Cost of glaze               .75
               Electricity to fire         .25
               Wage cost                  3.50 Based on an hourly wage of $7.00
               Total cost of production $5.00

    Take your cost of production and multiply this by 25%. This is the profit you wish to make over the cost of production. In this case, the profit would be $1.25.

    The final cost added to the mug will be the cost to market. This includes anything you must pay to sell the item, including commissions, advertising and if you pay for selling space for craft shows, etc. For commissions charged, multiply the total cost of production by the percent of commission charged at a gallery, in your case, 50% (which by the way is extremely high, the going rate of commission is between 20% and 25%).

   Cost of production         $5.00
   Wages charged               1.25
   TOTAL COST TO PRODUCE      $6.25
   25% Standard Profit         1.60 This is calculated by $6.25 x .25 and round up.
   Price to charge            $7.85
   Round up the Price         $8.00
   Commission Charged on Sale $4.00 This is calculated by Round up Price x Commission charged
   Amount made on sale        $4.00
   Profit                    -$1.00 Figured: Amount made on Sale - Cost of production

    As you can see, with the commission you are being charged, your total cost of production is being taken by the commission as you are going to be charged 50% of the total sale price. Your profit on this sale will be -1.00, because your profit is being used up by the cost of production. Therefore, it is costing you to make your pottery.

   If you commission charged by your gallery (furniture store) was only 20%, the profit would be as follows:

   Cost of production          $5.00
   Wages charged                1.25
   TOTAL COST TO PRODUCE       $6.25
   25% Standard Profit          1.60 This is calculated by $6.25 x .25 and round up.
   Price to charge             $7.85
   Round up the Price          $8.00
   Commission Charged on Sale $1.60 This is calculated by Round up Price x Commission charged
   Amount made on sale         $6.40
   Profit                      $1.40 Figured: Amount made on Sale - Cost of production

  Now, you are making some money on the production of your pottery. Of course, if you were to sell your products personally, you would be making more because you would have no cost of commission, so your profit would be $1.40 + $1.60 or $3.00 profit.

  A potter must watch any commissions or advertising they put into their sale. These fees, along with the cost of production is always subtracted from the sale of the item.

  Consider selling your items by word of mouth, website, or a gallery or store that charges no more than 25% commission.

  I hope this helps you in determing how what to charge for your work and how to sell you ware. If you have futher questions, please feel free to contact me at any time.

Sincerely,
Ti Phillips
Earth Stoke 'N Fire Pottery Studio and Artist Retreat
www.earthstokenfire.com

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