Wednesday, August 24, 2016

The price is wrong

"I guess I seem ungrateful with my teeth sunk in the hand
That brings me things I really can't give up just yet."

It's time to play First World Problems again!

If I wasn't the luckiest girl in the world, leading a charmed life full of great family and fun travel and good health and the proverbial pot of gold at the end of the rainbow, I'd say that if it weren't for bad luck, I'd have no luck.

Of course that's not true at all, but sometimes it's the little things that get blown way out of proportion and sometimes there are too many little things all in a row.

We've been watching Series 6 of Vera and when I bought the first episode for $1.99 there was no option to buy the season. When I bought the third episode (of four), an option appeared to buy the season for $5.99. So when I was ready to buy the fourth episode, I called Amazon, who told me to buy the season and they'd refund the first three episodes. So I did. Only there was a little problem. I'd used promotional credits to buy the first three episodes. I earn these $1 at a time toward digital media by choosing free no-rush shipping on Amazon Prime whenever I order.

It turns out that promotional credits are not refundable. So I called Amazon again and went through a complicated explanation and the rep agreed to make a one-time exception and give me a courtesy credit. Right. Thanks for giving me back my own money. I know, it's just semantics. Ironically, the entire credit applied against the next order I placed - for cat food.

Sometimes I wonder why I get so wound up about $6. Or really, $2. Why couldn't I just shrug and pay $1.99 for that last episode and save myself a headache.

Why ask why. I couldn't. I can't.

I was looking at my bank statements online and noticed a $16 monthly fee. The fee was charged for most but not all months going back at least a year. This is very bad on me for not having noticed. But now that I had, I read the fine print. You can avoid the fee several ways, among them this. "Maintain a $3,000 minimum daily balance in your primary checking account." I assumed this meant my personal account which has never had less than ten times that amount in recent years. My personal account is in my name. My business account is also in my name dba Elizaebth Beads.

So, you guessed it, I called the bank, and they said my primary account in this context was my business account, which I think is confusing. Why not say, maintain a $3,000 minimum daily balance in this account? I must have been - cough - persuasive. I played the "I've had this account since 1981" card and the bank credited me for the fees for the past year. I'll make sure to keep that minimum balance there going forward. I'd been keeping it lower because my business account is attached to my PayPal account and for a while there were reports of hackings. I haven't heard about that lately, so I guess I'll take my chances to avoid that $16 monthly fee.

One last $6 agony aunt story. We bought a Jamba Juice punch card in some kind of fund raiser that has ten punches for a buy-one-get-one-free smoothie discount. We used it over the weekend and the cashier punched two punches on the card instead of one. I was upset way out of proportion to the crime. Another cashier came over to try to solve the problem. In gold magic marker she drew a little arrow on my card pointing at the last punch and wrote "still valid" and "ignore." Only the words were illegible. I read "ignore" as "Laura" and asked if that was her name. (Her name was Jasmine.)

She assured me that they'd honor the punched punch the next time I came in. I asked, what if I go to a different Jamba Juice. She said, just have them call us. Hah. I asked her to write it all out on the back of a receipt and she did. But it weighs on me. We usually get Jamba Juice about once a month, but I'll probably go back this week, because it will haunt me until it's sorted. Yeah. I'm ridiculous.

So on to more important things. Like art for art's sake.

The age-old discussion about pricing beads reared its jaded head on Facebook again this week. It started with a question from a beginner about pricing by the hour plus the cost of materials. As usual people camped out on both sides of the issue. I contributed my very-unscientific opinion, which tends to change over time.
I price somewhat by gut feeling. Sometimes I spend a lot of time on a bead but it's a design fail for me. Someone else might love it but I can't rationalize a high price. That's one reason auctions are good. The market decides. Other times I spend less time on a bead and it turns out delightful. I'd price it higher. It's art, not science. But that's just me. One size doesn't fit all. Pricing is a personal decision. Some may use a formula, I don't.
Right after my comment, another artist said she used a combination of hourly plus overhead, and provided a link to a blog post she wrote about pricing.

I read the article. After reviewing the reasons people give for shying away from pricing beads from a business perspective, she mused as follows.
But how many times have I also heard someone say they wished they could make a living doing their art? Whenever I hear this statement, I feel a little sad for the person. Are they really doing what they were put on the earth to do? How powerful would we all be collectively if more of us lived our lives using the gifts the creator gave us to our very best ability? Would we treat each other a little nicer because we were happier? Would the cultural “affluenza” so prevalent, so damaging to the planet be alleviated? Would more people feeding their creativity be turned into creative problem solving for the world's increasingly (seemingly!) complex problems? Would the world be a better place, ultimately?
Wow. From pricing beads to world peace. That's quite a quantum leap.

She goes on to say that "pricing is a factor of two things: direct costs and indirect costs, and it can be difficult to corral those indirect costs and attach that to the price of of bead." And that "every bead you make has a fixed cost attached to it before your hourly rate kicks in." And that "that is the same approximate amount or percentage whether you are making a spacer or a fancy focal." And also that "profitable does not mean 'in the black' by a few bucks – that's closer to 'breaking even.'"

It did make some sense to me. It's not rocket science that to make a bead you need studio space, equipment and tools, raw materials (glass, embellishments such as fine silver, pure gold, cubic zirconia, shards, frit, to name some). You also need power and fuel. If you are selling online, you need a computer, a camera, office supplies, furniture. If you are selling at shows you need displays, transportation, maybe lodging and meals.

It almost makes one want to get a "real" job instead. If you take into account the time to do the mathematical calculations to determine your costs per bead, well, I'd have no time to actually make any beads.

She talked a lot more about spacer beads, those simple little single color donut rounds, maybe rolled in some frit, that are the bread and butter of many beadmakers.
It doesn't matter how many of 'em you can make in an hour if you are selling them for less than their fixed cost. You are then selling your spacers at a loss, which only works if you make A LOT of other fancier beads and sell them at a price that factors in the hundreds of spacers you are selling at a loss. I would point out that you still need to know how much you are losing on the spacers and lower end beads to figure out how much extra to charge on the higher end one.
This has been a sore point with me lately. When I see beadmakers selling spacers for less than a dollar, I want to break my own rule which says that how you price your beads is none of my business. Because you still have to dip a mandrel, you still have to clean them, you still have to string them together in some way to present them for sale, photograph, list, package and ship them.

I had to poke the beast a little. You know, I can't help myself sometimes. All right, oftentimes.
I really appreciate your blog post and the work you put into it. I especially agree that "Here in the U.S. you cannot make a spacer that costs less than $1 to make and my assertion is that it's closer to $2 these days." I'd love to see you give an example of how you price a specific bead or set of beads. Do you factor out the overhead, time and materials cost for each bead you sell? Since I have no left brain, that boggles my (unbalanced) mind.
She wrote a very long response that boiled down to this.
For one quarter, I literally kept time sheets/diaries to keep track of how many beads I made ... and how much hands on time I spent making them. I also kept track of all the other tasks I did. ... I determined that every single bead at it's most basic cost me $1.25-1.50 BEFORE I did any actual hands on work to make it, that is BEFORE my hourly rate. Then, on top of that, the hourly rate has to cover all my hands on time and that includes paying myself a reasonable salary.
I had a lot more questions but I decided in service of peace, harmony and my hallmark walk-the-line avoid-confrontation philosophy, to hold it to one.
Thanks, that is very helpful. One more question - what happens when you price your beads accordingly and they don't sell? Sometimes what I think is a fair price seems to be more than customers are willing to pay (speaking not strictly for myself, but from what I see in the larger lampwork world).
Here is the condensed version of her response.
Well, I might cave eventually, but there's really no need to cave on the lower end stuff, right? By that I mean, it's really okay if I don't sell a spacer, and honestly, the higher end stuff usually eventually sells it seems, thank goodness. ... I will say that the "what the market will bear" argument only has us all racing to the lowest common denominator, and you can only sustain that level for a small period of time ... if I'm going to "fail" I'd like to do it in the most highest, spectacular, giving-it-my-all way possible!
Well, it's nice for her that her higher end beads all sell eventually. I wish mine did. I'm not even sure what higher end stuff means for me. Is it everything above and beyond a simple spacer? I wouldn't call my $6-$8 dollar dot pairs higher end stuff, but they do sell better than my focal beads.

I just don't think you can really boil art down to a fixed cost plus hourly rate. I'm not that consistent. I have more inspired days at the torch and days where I make a lot of dreck and if I have to roll up the financials for all the dreck into the decent stuff, I'm pretty sure I'd never sell a thing.

I keep coming back to the same thought. If you are going to look at art strictly as a business, you might be better off finding another line of work. At least I might, and that just might be because I'm not conistently talented enough. I'm glad I don't have to though. I've already put in my 35 years working for a paycheck, so I can make art my work now, whether or not I make a profit at it.

As I said, art for art's sake.

Here are some new lizard beads I'm chuffed about. I'm upping my prices on these, partly as an experiment and partly because they have a higher degree of difficulty than the other beads in my repertoire.

We'll see who does the flag salute.

I heard it in the wind last night
It sounded like applause
Did you get a round resounding for you
Way up here
It seems like many dim years ago
Since I heard that face to face
Or seen you face to face
Though tonight I can feel you here
I get these notes
On butterflies and lilac sprays
From girls who just have to tell me
They saw you somewhere

In some office sits a poet
And he trembles as he sings
And he asks some guy
To circulate his soul around
On your mark red ribbon runner
The caressing rev of motors
Finely tuned like fancy women
In thirties evening gowns
Up the charts
Off to the airport
Your name's in the news
Everything's first class
The lights go down
And it's just you up there
Getting them to feel like that

Remember the days when you used to sit
And make up your tunes for love
And pour your simple sorrow
To the soundhole and your knee
And now you're seen
On giant screens
And at parties for the press
And for people who have slices of you
From the company
They toss around your latest golden egg
Speculation well who's to know
If the next one in the nest
Will glitter for them so

I guess I seem ungrateful
With my teeth sunk in the hand
That brings me things
I really can't give up just yet
Now I sit up here the critic
And they introduce some band
But they seem so much confetti
Looking at them on my TV set
Oh the power and the glory
Just when you're getting a taste for worship
They start bringing out the hammers
And the boards
And the nails

I heard it in the wind last night
It sounded like applause
Chilly now
End of summer
No more shiny hot nights
It was just the arbutus rustling
And the bumping of the logs
And the moon swept down black water
Like an empty spotlight.

(Joni Mitchell, For the Roses)

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Thanks for your comment! I will post it as soon as I receive it. Liz