Once upon a time I had a blog and on it I had a post called “The Class Ceiling, or why you’ll never get rich making lampwork beads.” I am reposting it here as a favor to someone who asked about it.
As some of you know, I have started working on a new murder mystery where the amateur sleuth is a bead maker. Considering what kinds of things I hear customers say at bead shows, I realized that the number one is probably “is that the price for one bead?” This is invariably from a person who’s never been to a bead show and is encountering lampwork beads for the first time. So, a seminar on the cost of being a beadmaker. Let’s take a simple (or not so simple) cased floral bead, like these: Pretty much every lampworker makes something similar to this at one time or another. If you want to do much in the way of sales, you’ll have to develop your own style, but the basic cased floral is pretty much a staple. So, here we go. Let’s see how little we can charge for one of these beads if we want to make a living. Let’s assume that to get the bead formed takes you 14 minutes, and another 1 minute to clean it later. So 15 minutes.
Yes? In the red shirt? Oh, it wouldn’t take you 15 minutes to make that bead? Well, bully for you. Yes? In the back there? It takes you more like half an hour? That’s fine, too. Just adjust your prices accordingly. I’m trying to keep the time average-to-low to keep the price of the bead as low as possible.
OK, onward. So making the bead takes 15 minutes. At $12/hour (which is ridiculously low, but remember I am trying to make this bead on the cheap), that’s $3 in labor costs. In addition, you’ve got about $2 in materials and overhead. Glass, of course, isn’t all that expensive. But in addition to the glass, you have cost of electricity, of water, of gas (oxygen, MAPP gas, propane, natural gas, whatever you use), of insurance if you have it (and you should), and the things that take up time but aren’t associated with any particular bead, like cutting strip glass, making stringers, things like that. So now our little bead costs $5. Great. Not a problem at all.
But we’re not done.
I have to sell this bead somehow. Now, if Joe Shmoe walks into the disaster area that is my studio, picks the bead off my workbench and pays me in cash, I can charge him $5 and we’ll all be happy. But that’s not the way it happens. Nope. Now I have to take my little bead off to a show. Say it’s a two-day show. 16 hours. And I sell 320 beads. That’s twenty beads an hour, a bead every 3 minutes. So my time for that is another 60 cents on to the price of my bead.
And then there are the costs of doing the show. Two day show, maybe $300. Oh, heck, let’s make it easy and say $320. Remember I sold 320 beads at this show? That’s $1/bead additional. So now my bead is $6.60. If it’s a two day show, I probably have to stay overnight, so there’s a hotel cost and gas for travel. It’s not enough, but let’s make everything even and say my little bead now costs $7. And remember when I insisted that Joe Shmoe pay me in cash? That’s because if he uses a credit card, I pay just over 3%. And since most of my customers do use credit cards, I have to figure that in, too. So my bead costs about $7.25.
Yes? In blue? Wouldn’t it be cheaper just to sell these on my website? Well, actually…no. Because although there are fewer financial outlays, there’s a lot more time. I am figuring on approximately 3 minutes per bead at a show, right? Well, you can double that, if not more, for beads that go up on a website. Inventory is harder. Every bead has to be photographed, the photos have to be edited, the beads have to be put up on the site and described.
So the least I could possibly sell this bead for and not incur a loss of some kind is $7.25. But I sell both wholesale and retail. So I have to price my bead for retail sales so that I can make that $7.25 even if I give my wholesale customers 25% off. Which means I am going to have to charge about $10 for that one bead.
Yes, on the left? You’ve seen beads like those on ebay for $2? Yes, well, that’s what we call the “impact of the hobbyist.” See, lots of people don’t need to make a living from making beads. So they figure any little thing they make is better than nothing. All they care about is being able to buy more glass. So if they get that $2 for their bead, that’s $2 more glass they can buy. They like to get paid for their work, but they don’t have to.
The pricing of beads, as T.S. Eliot would say, is a difficult matter. Because now we know that the least I can possibly retail that bead for–and really, that’s a very low estimate–is $10, we have to figure out what I should sell it for. And this is a balancing act. Since about 75% of my sales are wholesale, I am not likely to get the full $10 for the bead, so I can only count on making the low end. Obviously, I want to get as much as I can for it, especially since I know that if I sell it for $7.25, I have to sell every bead in my inventory in order to live off the proceeds. (Plus, I have to sell 320 beads at a weekend show. Not a guarantee at all.) So I need a bit of a cushion. But I don’t want it to be such a big cushion that everybody thinks I am price gouging.
And I have to take a look at the going rate.
So now you know. When you go to bead shows, don’t be shocked at the prices for “one little bead!” (Of course, there are plenty of people do overprice. So don’t assume the bead is worth the price whatever that price is–consider each one individually and ask yourself what it’s worth to you.)