Gyrogami Blog - Precious Metals, Jewelry, Artwork

Pricing Items - Labor

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Labor caluclations
Some, but not all

Categories: Instruction and information; Commerce and business

Word count/read time: 575 words; 2-1/4 minutes

Part three of this three-part series deals with labor.

The simple way to clock labor is the time from beginning to end of manufacturing. Sometimes it is more complicated. There's also the non-billables like phone conversations, signing up for shows, going to seminars and workshops, ordering and stocking, research, documentation, website maintenance, errors and mistakes, etc.

For basic situations:

Ordering, unpacking, and organizing supplies
Set-up and clean-up
Assembly
Quality control
Documentation: pictures, literature, etc.
Customer interaction
Packaging and shipping

For professionals or the like:

Website maintenance
Shows: searching, applying, booth set-up and tear-down, etc.
Travel time
Making findings, clasps, wire, jump rings, and sheet

Other potential factors (at least to me):

Search for and buy (scrap) metals
Document and separate sellable and meltable items
Prepare scrap: cutting, cleaning, crushing
Furnace time: set-up, manning, clean up
Ingot time: pouring, cleaning, prepping
Refiner: set-up, manning, cleaning, storing
Clean, melt, and cast refined metals
Make raw materials: hammer forging, rolling mill, wire drawing
Make solder and filler wire
Weld or solder jump rings
Populate and analyze pricing spreadsheet
Manufacture custom presentation cases

Those buying pre-made parts can't appreciate what is required to manufacture them. It's convenient, necessary for many, and by no means shameful (but it means your items can not legally be called handmade, let's be clear). However, being at the mercy of the supplier severely limits the selection, variety, and quality.

Advanced chainmaking techniques like welding or soldering become a different matter. It might take 100 elapsed minutes to add 20 links. Time is wasted on failed welds and melted links so it might only take 60 actual minutes.

Every metric is important, especially failures and wasted time, to know how long it should take for accurate pricing but also how long it really takes for time budgeting.

I time up to 100 links to calculate average, expected, and actual time with best- and worst-case scenarios, standard deviations, and more. I might track 20 separate processes. It's an incentive to improve efficiency since less wasted time results in higher production numbers and better prices.

A detailed record and lots of trial and error uncover the fastest way to complete a procedure. When there are 1000 rings, a few seconds per ring add up to nearly two hours. Save another few moments here and there and that could be a full workday!

Without a way to quantify what is being used (materials) and how long it takes (labor) then money will be lost. My pricing spreadsheet has a minimum of 75 fields and continually evolves. There are formulas for wholesale and retail pricing, rush orders, discounts, and more.

If cost analysis is not thorough then it will produce inaccurate numbers. A business is guaranteed to fail if it can't control costs, identify the bottom line, or establish a break-even number.

Hobbyists who charge little or nothing for their labor ruin it for everyone! They don't take it seriously and implicitly state their time is worthless. Lowballing devalues the entire market. Some people rely on income from their products; hobbyists' ignorance and selfishness deprive professionals of their livelihood.

Remember, labor and innovation turn $100 of silver into $5,000 worth of earrings or $5 of steel into $300,000 of precision watch components. Customers will value your time and effort only if you price your items accordingly.

Posted by M: May 20, 2020

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