So we have talked about time and labor costs, materials and overhead costs, and now we get to the pricing:
METHODS OF PRICING
SQUARE FOOT AND PIECE PRICING:
After all is said and done, many studios cost their work simply by the square foot and number of pieces. Before doing this, you must know your average costs and know that they are being covered by the pricing model. Remember my earlier example of knowing how long it takes you to complete a panel divided by the number of pieces. You should now know (by all the preceding calculations) your average cost of running the studio divided by the hours it is open and operating. This cost/piece multiplied by the number of pieces in the panel should give you the cost factor of this model. Add to that the % of profit you would like to make and that should give you the price/sft.
Here’s one model used by many studios:
1-35 pc/sft = $55/sft
36-45 pc/sft = $75/sft
46-55 pc/sft = $85/sft
56-65 pc/sft = $105/sft
66-75+ pc/sft = $125/sft
Using our costing example window, this pricing structure would place our 78pc/sft, 16sft window at $2000 installed. ($125/sft x 16 sft = $2000) While it covers costs, it allows little profit. This method also falls dead when calculating a small window with high piece count.
For example, say you’re asked to do a 4 sft window with 465 pcs. This means 116 pcs/sft and the total window would be priced at $500. I’m sure you’re not interested in cutting, foiling, soldering a 465 piece panel at $1.07/pc, right? You may want to add a few more tiers to that pricing schedule.
If we use the straight costing example (with a $10/hour labor cost) + profit ratio method, we would charge
Labor = $1250.00
Materials = $270.34 (copper foil method)
Overhead = $273.66 (18% factor)
Total Cost = $1794.00
OK, now you know your costs; how much profit should you factor in. Customary is 100%, but we all know in the glass industry, we are tempered by “what the market (client) will bear.” Doesn’t it always seem that clients put tons of dollars into the house and glass is always an afterthought? Frustrating, isn’t it? So, your client is looking for a work of fine art on a zero budget? Use a lower percentage mark-up and keep them happy. There’s always those windows we’ll do just for the chance of doing them, right?
If you know your costs are $1794.00 (and you want to work at the $10/hour rate), you can begin to mark-up the price by 100% = $3588. Not a bad price for a 16 sft window. If you don’t want to work at those rates, adjust your cost and try again. This, in the end, is still a factor totally left up to you. But now, at least, you know you’re not LOSING money!
The straight costing method should also be used for fused work, beads and lamp making. In this day of foreign made lamps, however, lamp artists are pressured to keep prices low. A lamp artist today should never apologize for what it costs to make a one-of-a-kind lampshade. As piece intensive as lampshades are, the labor factor will far outweigh the material costs and will, if you earn what you’re worth, drive up the price of the shade. Never be ashamed to charge what your work is worth! If they don’t want to pay your price, they’ll go somewhere else and get what they’re willing to pay for and end up wishing they’d paid for your work. You’ve lost nothing and will find it’s those clients who are not willing to pay your price that would have ended up giving you nothing but headaches anyway.
In conclusion, if everyone started to charge what their work is worth, none of us would have to sidle into quoting a window/lamp/fused piece/original bead. You must charge fine art prices because your stained glass art IS Fine Art!
M. Hanson, CFO
Paned Expressions Studios, Inc.