Pricing: Are you for real?

This post is going to be a little different from my standard descriptions of leather and leather qualities; it’s post is intended to explain why some of my wallets and other items are substantially cheaper than other real leather products made in USA.  This will be my ready-made response for the 2-3 emails a year I get asking if “I’m really making things in the USA” or if “I’m using ‘Good Leather’ or even ‘Real Leather” or the simple “why are you so cheap.”  I’m sure I’ve actually lost sales because people ask themselves “what the catch?” or reasoning that “you get what you pay for.”  I also get lots of my fellow leather workers asking the same questions.

I’ll be the first to admit that I could and maybe should charge more, but we’ve always wanted our products to be available to “the average person.”   I’m a big fan of some of the high-end leather work you see around but not everyone can spend $100 or even $50 on a quality wallet, belt or other leather product.  Here’s a brief explanation of some of the factors that let me sell products at the prices I do.

• Reason numero uno:  I get lots of leather deals!  We’ve been around since 1969 so we have lots of connections in the industry.  I’ve been offered scrap from major shoe makers and paid by the pound.  I regularly get upholstery scrap in at .75 per pound (that what most of the small pouch-like) items get made of.    I’ve also got a guy who calls me when bigger factories want to move their excess hides at a fraction of the price they paid.  Getting deals means my cost is way less than the lone crafter who buys a few hides of a specific leather at full price.   The only catch is that sometimes we’re dropping thousands of dollars on an “unknown.”   Add to that the many of these bulk deals involve a lot of sorting.  Here’s the entire blog post about our leather buying process:  https://nstarleather.wordpress.com/2017/08/15/hey-man-where-do-you-get-your-leather/
• We’ve gotten good at sourcing hardware:  I previously used a hardware company to buy a a clip for our money clips, they cost $2 each even when buying 1000+ at a time. We looked around found a factory that was making a similar one (the previous ones were all coming in from overseas anyways, maybe even the same factory) and my cost went down to around .60 each.  The same is true to a lesser extent with everything else: if you’re only buying a dozen YKK zippers they’ll be expensive, but if you want 100+ then things get much more reasonable.
• Our production focuses on “Bang for your buck”: Since we’ve always been “mostly wholesale” we have always needed to cut our prices to something that other people could resell and still make money.  Because of this, we don’t do the super-finished burnished edges that you’ll see on higher-end wallets.  I recently talked to another leather worker who said that to do an “Ok” burnishing job on a wallet it would take him (experienced guy) 20 minutes and to do a “good” burnishing job, at least an hour.  So, we paint our edges but don’t put in the super-time-consuming steps, like burnishing, that end up really adding to the price.  Nice burnished edges are nice but don’t add as much to durability as some people claim; my current wallet just had the edges painted (the way we do with all our wallets) and we’re going on 10 years.  Yes people like burnishing, but it’s just a “nice touch” not a necessity.  If I were to offer a wallet at $27 that’s not bunished beside one at $50 that is burnished, most people will pass on the burnishing.   In this same line, we had to survive the 80’s and 90’s a time when people would compare our prices to Walmart, we just didn’t have the artisan culture we enjoy now.   There just were not people buying $100 wallets.  The harder times taught us how to trim the fat.
• We’re a production shop: Usually when we make up a specific item it’s 3 dozen or more at a time in a production run.   It is much quicker to do things in larger runs, you only have to get out the leather once, only change between workstations as you finish a lot and when it comes time to ship you can pull them from a box on the shelf.  All of that is much quicker than taking out leather and cutting dies, cutting just one of an item and taking it though all the production steps one at a time.
• We don’t advertise: ( This is mainly because we don’t want to compete with our wholesale customers).  Advertising is a huge part of most retail company’s budget. 
• We don’t run sales or promotions:                                                                            Because of being mostly wholesale our pricing formula has always been simple:           Materials+Labor+Overhead/Profit=Price.                                                                      If a company is almost always running a sale with an average of 20% off, they need to add that 20% to the price of everything or lose money (excluding the idea of “loss leaders”).  Therefore prices will always have be 20% higher cover the cost of the “average sale” that’s  running, and when someone buys something without the sale, that’s just extra profit.    We just like to keeps thing simple and try to pick a price that works for us from square one.  I’m not saying we’ll never change this, but for now, it seems to work.
• Rural SC has a lower cost of living:  My mortgage was $300 per month before I paid it off. Our building is paid for and was ridiculously inexpensive when we bought it.  The machines are paid for; not having to debt cuts down our costs. Because of the low cost of living I don’t have to pay myself or my workers nearly as much as I’d have to if I’d set up shop in NYC or SF or another expensive part of the country.

With all this being said, my prices are going up little by little.  One of the things that you might notice is that my “standard” wallets are around $26 but my Horween or SB Foot leathers are significantly more.  More and more people are willing to pay for that specificity.  For me, specificity cost more because of the way I’ve always bought leather; odd lots and scrap won’t cut it if my customers want “Natural Horween Chromexcel” (a leather I now end up buying directly at full price).

This means my standard “non-specified leather” wallet will be made from whatever “nice” brown or black leather I have in at the moment (still good stuff (sometimes Horween, SB Foot or European Calf), but I can’t promise it will be exactly the same brown or black leather 6 months from now.

Standard “Brown” Wallets. All from different leathers.

So that’s it, me being transparent about how my items are priced.

 

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