The Armour Archive

I get so depressed when I read the archive lists lately (no not lately as it has always been this way it seems). First, I would like to say I am an armorer. This is not how I made my fortune, but it is how I love spending my free time, and I do sell a lot of armor to paying customers. There was discussion one time about what constitutes a professional armorer, and I dont remember the concensus, but I think it was decided that "he that takes money for making armor is a professional armorer", so I will call myself a professional armorer for this post at least.
Why, in the armor making profession, is it ok to lie, cheat, and steal from our customers? I see it on here everyday that someone has waited a year, 2 years, 4 years, for armor that was already paid for, but never recieved. That being the case, these same people will gladly accept your monies today and give you a reasonable delivery date, which they know they cannot hope to accomplish because they are already years behind. In a society, or should I say in THE society which we are all a part of, where HONOR is valued among all other things, how can this attitude survive?
I have seen knights in our society, who want soo dearly to attain their first crown victory, go to ground combat to make odds more even for their competitor whom they've legged, knowing full well this may be the one mistake they have made all day which will take the victory from their grasp. But HONOR is more important than that victory.
How can armorers, or forget that for a minute; how can an sca member do to another fellow sca member what some armorers do to their customers?
My wife, just last week surprised me with an unexpected vacation. We were to leave tomorrow and be gone approx. one week. There was only one problem with this that she failed to realize. I sell armor on Ebay and on my website. Well, the website would be a quick fix, just place a note on the website and anyone placing a new order would know I would be gone for one week and list the exact dates. I ship all my armor next day as I don't sell what I don't have. BUT I had ebay listings that would not be finishing up until Monday of next week. Also, the people whose orders just went offline expect that if they pay anytime in the next week, I will ship their item the very next day as promised in the ads. The armor is already made, but I wouldn't be here to conduct business as I am expected to be (business integrity). To borrow a quote from Garth Brooks whom a few of you may know, he said one time that he has more money than his great-grandchildren could ever spend. Well, I am somewhere just this side of that, and in no way need any money I make from armoring, and truthfully I would much rather be leaving on the cruise to Mexico tomorrow, but I have obligations. Promises. My HONOR is on the line. If I leave right now and do not fullfill my promises to the people who have gone into contracts with me and need their armor, then what kind of armorer am I? What kind of person am I? What kind of SCA member am I? I am taking money to deliver a product. Whether I actually need this money is irrelevant. Was my wife pissed... VERY... will it cause me a divorce? I doubt it. If she wanted me any other way she wouldn't have married me.
Excuses:
It seems these days an armorer's main requirement for his occupation is to be able to convey excuses. This happened or that happened. My favorite one I have seen from a few different guys is "well I am just waiting for some money so I can pay to ship it". OK, now WHERE did the money go that the customer paid for shipping the item in the first place? You DID charge them for shipping didn't you??? That was not YOUR money, that was for shipping the product. You had no right to spend it in the first place if it was for shipping. I have also heard one similiar about needing money to "buy materials". That one is just so absolutely absurd it doesn't even justify response. You have gone and spent your customer's money (including what he paid for shipping no doubt) and didn't even have the minutest of brainpower to think you might need to at least buy some materials for your shop??? You have no business being in business if you have no more forethought than that!
It is stealing, THEFT. If it is not provided when it is promised it is THEFT. It is DISHONORABLE. It shows a severe lack of business INTEGRITY.
I feel that most of us on this site realize this and do everything in our power to make sure we are never looked at in this way. The armorers I have dealt with personally for various things(ie: Icefalcon and Ironmonger armory) are complete gentlemen in whom honor and business integrity are highly apparent in the way they conduct business. There are no doubt dozens more on here on any given night.
But PLEASE, let's stop making excuses for those that are not. Those few cause distrust against the entire armoring industry, and whether you like it or not gives YOU a black eye.
My only request if you choose to respond to this thread is please NO NAMING NAMES against others. That was not the intention of this thread...
Thank you,

Michael Spiers
Cyrack of Stonekeep
Stonekeep Armory
www.stonekeeparmory.com

[This message has been edited by Stonekeep (edited 08-08-2003).]

Heh, nice rant - I sympathize.

"How can armorers, or forget that for a minute; how can an sca member do to another fellow sca member what some armorers do to their customers?"

I think it's very easy to grasp. I strongly suspect that most armourers do not grow up wanting to go into the armour business. Let's face it, you don't go to school and here about armouring as a career. O.K., then, so how do people end up in this trade?

Well, I suspect that most armourers discover it as an adult (or young adult) and give it a go as a hobby. Most of them when they first picked up a hammer had no idea whether or not they could succeed at making something - they just gave it a shot. Some of them enjoyed it, and some of them got good at it. They become talented artists/hobbiests.

Then one day someone sees their work. They exclaim, "Wow! This is some great stuff! Man, will you make me one!?! Hey, I'll pay ya to make me one!!!"

And thus, Pandora's box is opened. It's a HUGE rush when someone is so stoked about your work that they are willing to give you money for it. I mean wow! Here you are just doing something for fun, and these people want to pay you for it! Of course, like many talented artists, they are usually broke. And they certainly haven't made a business plan. And most of them probably couldn't even compute the true cost of making any given item. But all is forgotten because, hey, someone wants to pay them to make something. So they agree, and take their first customer's deposit, and they buy the materials, and they produce a product for them. All probably goes well at this point.

But as the artist/hobbiest is working on his first paid commission, the idea starts rolling around in their head, "Hey, ya know, I could do this! (think Heath Ledger in <u>A Knight's Tale</u> ) "I could really sell this stuff!"

So they take a few more orders. Of course, since they are still always broke, and they never really thought about investing some initial capital outlay to start a "business", they are still taking customers' deposits and spending them to buy the raw materials to produce the goods. Oh, and since they still aren't really thinking "business", they're thinking "hobby that I'm getting paid for", and it hasn't really dawned on them that just because you have cash put into your hand doesn't mean you've actually made a profit, they're probably taking any leftover cash and buying beer and pretzels and paying an electrical bill or two with it. I mean hey, what could go wrong? As soon as I finish these 4 helms I'll have lots of money!

And of course then the eyes start to get bigger than the stomach. I mean, hey, if I have 4 helms lined up, that's a nice chunk of change when I finish! But if I have 8 helms lined up, man that will be sweet!

Of course a lot of armourers get into trouble, too, because they're just nice guys. They may begin to realize they are a bit over their heads, but when someone comes up and practically begs them to make a helm for them they accept.

And then one day they wake up and realize (or perhaps that is the problem, they don't...) that making armour is no longer something that they can do just when they feel like it. Suddenly, they've taken money from 6 different people and they haven't even started 5 of those helmets yet. This, I believe, is where the walls start falling down for a lot of hobbiests who fell into the armour business.

All of a sudden, the pressure is on. They've spent their customer's deposits, and now they've got to go to "work" whether it is fun or not. And I strongly suspect, after years now of watching this scene, that a lot of them are very well intentioned but simply don't have the discipline to do it.

Another trait that I used to blow off like hypochondria but now I believe is true, is that artists are generally, well, weird. A lot of artists seem to have mental problems, like depression, of varying degrees of severity. I know there are at least 2 such folks that have frequented here before. This of course doesn't help matters, either.

In the end, Michael, I really don't think "honor" enters into the equation. I understand the thrust of what you are saying, but I believe in reality the day-to-day mechanics of running a successful business are much less "Zen" than nebulous emotions like "honor". Basic economics cooks right along without honor. Ford Motor Company sells cars (or doesn't) regardless of how honorable they are (at least directly). It's about instilling confidence in your customers and meeting their expectations.

Like I said, I get the gist of what you are saying, and I don't want people to think, "My God, that Steve guy thinks honor has nothing to do with business practices!" That's not my point at all. My point is that really the fundamental failings of these armourer horror stories has far less to do with personal morality and a lot more to do with poor understandings of economics and running a business.

Anyway, that's my take and rambling on it.

Steve

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Forth Armoury
Highly authentic, affordable riveted maille.

The measure of a man is not in the steel of his skin but in the steel of his heart. - S. Sheldon

I'd like to drop in here and share my comments on this. I have to concur and say that I dont make my living making armour. I do it as a side/ hobby business. That being said, it is a business, and no the customer is not alway right even if they think so.

Steve's assumption about how people get started in the business is true. That's almost how it went for me.

I have to say I have had my share of boneheaded moves with respect to business. Hoseki is my first try at my own business and the learning curve has been steep. I have been doing leatherwork as a hobby/passion for more years than I care to remember, but decided to give it a go as a business.

Often, I believe as Steve said, that someone chooses to go into business with no business skills. Great armourer, lousy business person. Some folks gravitate to it, others, like me, have to work hard at their business skills. Some dont care.

Last week I almost quit making leather goods. The problems I have had locally with shippers, staggers the mind. It upsets customers when delays occur and its incredibly frustrating when little or nothing can be done about it at my end. I want to go and tear someone a new ......#$&%

I have had to limit myself to the orders I can handle. I hate saying no to people and hate turning them away, but sometimes, I haven't a choice. It comes down to knowing your own limits and balancing shop time with mundane life and keeping your customers happy in the process. Unfortunately, customers seem to suffer more than anyone.

We all, (I say we meaning us armourers) can always do more to improve service. Some have it down pat, others dont know up from down. I like to think I can improve and know up from down.

To my customers I have to say, for the most part you have been fantastic, thorough, patient and good folks. I learn from you and through you and your contributions to projects. I appreciate your business.

I do disagree with Steve to say honor does not enter into it. Armourers are put in a place of trust and must not violate that trust. It is up to them conciously to choose to do that and thats why I think its more like integrity. Some people will take money from a customer and walk away and think there's one born every minute. Another with treat that deposit or payment like a precious gem and work to fulfil the order. Many are in between.

Personal integrity is important to me. I have to sleep at night, and I care because I know how hard I have to work for my paycheck, and I dont spend it frivolously. I respect the person who says, I have to get the money on payday, can you wait?

Maybe its just me, but I like knowing people are happy with my work. I am fastidious and try to do best I am able. For this reason, I am a turtle. I work slow and steady. No rushing through stuff. The other reason for this is that leather cannot be welded if you slip with the knife.

I am sure that there are more than a few people out there rolling their eyes at my sentiments, but I really dont mind. Its rather cathartic. (whisper...excuse me)

Some have no honor, others have it, but cant remember where they put it. Many, are decent people who get in over their heads and the honor part is forgotten because they are so busy trying to get out from under their workload.

I believe this happens more than we know, and I think it may happen to even full-time armourers.



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www.hosekileather.com

I feel that I was very fortunate in 2 ways in my upbringing. 1) I was raised by a doctor, whom had it not been for the outbreak of World War II and the subsequent GI Bill, would have remained a simple cowboy working on ranches in West Texas. He was also 5 years older than my grandfather whom I never met. So I was raised in an atmosphere more relevant to the 50's than the era I actually lived in, and was very nieve when I first struck out into the world. 2) I was also raised on a ranch in an extremely remote area where I now live again since his passing. The people around here (most of course) have an extremely high grasp of the word "honor" by todays standards, and are themselves no doubt, throwbacks as I am.
Because of this, I suppose, when I take someone's money for something, I could not sleep knowing he might be displeased with any service that I might render. To think my name might appear in a public forum from a guy saying I took his money 3 years ago is just appalling beyond belief. It would never happen, and it will never happen.

On reply to the first gentleman's comments I can only say this: Honor and integrity are what make you think BEFORE you buy that beer, etc. that the money is really not yours until you deliver that product and the customer is pleased. On the part about artists being "weird", prone to depression, etc. Well to me that is just making excuses for them again. That is what my point was about. We have become accustomed to hearing these excuses. This has become the norm, and I have noticed other armorers making excuses for these people and even berating the customers when they get mad! (how unbelievable). If we give a child the rent money, and send him to pay the bill, and he stops off at the store, then the arcade, and then he can't pay the bill, do we tell the landlord "he had such good intentions when he left here, you really can't blame him", well that's nonsense. Even a 5 year old child knows the difference between right and wrong, and we are not talking about children here. A grown man can decide what is right and what is wrong. (not really arguing with you, just expressing my opinion on what you said. I will be the first to admit I can be wrong, and frequently am . I just cannot stand all of these excuses.. Besides, I would as soon argue with a man who has the patience to make chainmail, as enter into a drinking contest with an irishman )

Warren you are Hoseki leather? I am a big fan. Beautiful work! I have seen examples of it at events and on your website. I have started using USPS priority mail 2-3 day delivery. Its actually very comparable to UPS and MUCH faster service. Also, this may be valuable info; the boxes, tape, shipping labels, etc. are all provided free of charge. I found this out when my saddlery switched to USPS and I started sending out my armor items that way as well. You might check into it. It has saved the saddlery a lot of shipping charges in supplies alone, and the response from the fast shipping times has been really great.

99.7% of my customers from ebay have been fantastic. Every now and again you get someone that in no way can be pleased by any means available to you. This just naturally happens if you deal with hundreds of customers. There's not a whole lot you can do about it but make reasonable offers. Sometimes they have completely unreasonable requests. I have been to the point of throwing up my hands a couple times, but the very next email, or the next 100 emails emails are thanking me for the "fast delivery", or "thankyou for working with me on the payment, I sure appreciate it", or "wonderful product!! I am going to tell my shire buddies". You are exactly right, I can think of no better feeling than someone loving a product that you made and they paid you for, and them thanking you for making the transaction possible.

Thanks guys for reading my "venting" post.

Michael Spiers
Cyrack of Stonekeep
Stonekeep Armory
www.stonekeeparmory.com


[This message has been edited by Stonekeep (edited 08-08-2003).]

[This message has been edited by Stonekeep (edited 08-08-2003).]

Michael,
Just a note to compliment you on your website. It's clean and easy to navigate, no extra baloney (fancy gif logos, music etc) to waste my time. I have made armour to order but I do not ever take money before the item is complete and ready to ship. Like I told my wife, you never know. I could take the biggest order of my life and then the next day bash my hand with a hammer and be unable to fill the order. Just a rule that I have.

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The artisan formerly known as Willing Pell, then Juan Santell and then Willing Pell again. Hey, Prince could do it, why not me?

I have only dealt with a few archivers in terms of product, but I have been very pleased so far. I always sympathize with the customer when I hear the "i've waited 2 years" stories. I find it totally unacceptable and am glad that other armourers do, too.

I have only sold a handful of things since I began making armour (started with leather in 1997). I too got caught up early on when I won a costume contest with my first suit of leather armour. Made 3 times in prize money than what I put in it in materials. Then sold that piece for a lot (in my mind at the time.)

I thought, wow, I can really make some extra money at this and I love doing it! How cool!

As I was finishing the 50th pair of leather klingon gloves for a store, I vowed never again to do a job just for the money. I hated those gloves, but I never once considered not finishing them or putting them off.

I decided after that to make what I wanted and only sell it afterwards if someone wanted to buy it. I've sold most things I've made and been made offers for what I decided to keep.

I do take the rare commission, usuallly maille, but it has to be a project I really want to do. Then the money is just a reward for doing what I enjoy. I'm currently working on a maille shirt for a 300lb, 6'7" viking. That's the type of thing I want to do anyway, I just can't afford to without getting paid.

We really need some of the more experienced businessmen to step up and do some articles about the lure of armouring for money and the pitfalls that it can bring. We can apprentice to learn how to hammer, but not how to run an honorable and efficient armour business.

bex


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"Anything worth doing is worth doing obsessively."
Becky's Armour Pages: http://bexter.adkinssoftware.com

Hi Juan, thanks for the compliment! You and I are in the wonderful position of not doing custom work apparently. I almost never touch it because I just advise people that I am too busy to do it. I think the major pitfalls others discussed earlier are more likely to occur with custom armorers than anyone else (although i did read about one fellow making pre-patterned armor that he never got delivered from ebay). I think if a customer was able to pay half down and half at completion of custom armor, then the armorer would be more likely to get that product shipped; however, this really only works for "walk-in" business. But I see something like a digital camera coming in handy. The armorer shows the completed work in pictures, then the customer pays the rest of what's owed so the item will be shipped. One of the main problems with paying for the entire thing up front is the customer has now lost all bargaining power. The people we are complaining about get all the money up front, then use it, and then have no incentive to make the work (they already have their money). The customers themselves may need to demand better terms of contract so they still hold at least some bargaining power.

(To Bex)Although I haven't seen an article exactly like what you are looking for, there is an exceptional essay on the archive about "How to run an armory", which is a must-read. I honestly dont follow his pricing policies he sets forth, but that's because I dont have to make a profit. But I started making armor (again) for a different reason. My mission statement was to make very basic armor for beginners/loaner armor for shires with little money etc. I am actively trying to not get better at what I do, keep my products very basic but very usuable, and not charge enough to really make much of a profit at all. If I started making fancier armor, then naturally the price would go up for all the time involved, then out the window would be my original mission statement I made when I rolled the dishing stump back out of the cobwebs. Although I am an experienced businessman, and I have had good success, I am afraid that wouldn't really qualify me to write an essay like what you are looking for, but I agree it might fill a real need.

One thing I thought of this morning as I was contemplating whether the states are going to try to get legislation passed so they can get sales tax from internet sales (out of state), is that they (several states) ARE now passing legislation concerning Internet Fraud. I read in another thread that was complaining about not recieving armor etc., that (unless you want to file a $66 lawsuit, I'd suggest you wait until he sends the product) :not exact quote but the general gist:.. Well, I think soon that wont be all you can do. This internet fraud legistlation is going to change a lot of that. Where it will hit most is these guys who give a delivery date and then take years to complete the project (if ever). They could be looking at really stiff jail sentences. This could be a major force in cleaning up our industry. Not ever starting a project, and not having the money to buy materials, etc. will not be excuses anymore, they will be evidence against you saying you had no intention of not de-frauding the buyer.
(I am hoping one of our lawyer friends that knows more than just the headlines will comment on these new laws)

Michael Spiers
Cyrack of Stonekeep
www.stonekeeparmory.com

Bexter,
your example is typical of my experiences in being paid for my craft work. Unless a person is willing to accept the fact that making money from a craft will be hard work and only a little fun from the outset they will be in for a serious dissapointment.

Those who can deal with these consequences may make it to be "professionals" others should refund the customer's money and admit that they don't have what it takes. As Dirty Harry says " a mans (womans) got to know his limitations"

As for myself I have come to the conclusion that my day job is the only job I want/need. Also, my most enjoyable projects have been coronets where I recieved no compensation what so ever other than a pat on the back from a friend. The materials for these projects were largely donated from the baroney which helped make it a "group" effort and provided enjoyment even for those only involved in a small way.


[This message has been edited by lorenzo2 (edited 08-08-2003).]

steve nails it.

one thing not mentioned is when an armourer starts taking orders he usually undersells. if his work is good or great he gets a buttload of guys putting orders more than he can fill usually. taking advantage of the good deals before he raises his prices or is over worked.

especially helms. I saw a newer armourer go live and he was taking orders and measurements on paper plates with a small cluster of guys dancing around. 12 ga helms for $250 what a bargain with a month delivery and custom measured at that.

another sad thing is a full time hand work armour maker usually lasts armound three years before his body starts having physical problems.

making armour pays but not as well as real life in my opinion. its great as a hobby but sucks as work.

want a laugh go read my policies: http://tiarmour.com/My%20policies.htm

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sir mrks

tiarmour.com ==>> maker of fine Titanium armour

"I do disagree with Steve to say honor does not enter into it."

A couple of points of clarification on my part:

Please be aware that I did not say that honor does not enter into it.

Honor is, ultimately, the underpinnings of not just how you run a business but how you live your life. So of course honor enters into it.

What I was trying to say is that I don't think honor is the driving force in most of the cases where armourers have gone down the tubes. Most of the time, I believe, it's simple ineptitude.

Also, I don't want to sound like I'm "making excuses" for anyone. Ultimately if you fall down on the job, the cold, hard reality of the world of economics doesn't care why you fell down, and by extension usually your customers don't, either.

I'm not trying to make excuses, I'm just trying to lend understanding.

Bexter:

Here is an article I wrote over on the Chainmaille Board ( http://www.chainmailleboard.com )some time ago:

What you <u>should</u> charge, and what you <u>can</u> charge, are of course two different things.

Economics 101 - Computing Retail Price

There are 4 basic things that contribute to the retail price (the price a customer pays) of a good:

1) Cost of Materials
2) Cost of Labor
3) Overhead
4) Profit

Items 1-3 taken in total define the <u>cost</u> of the good - that is, the amount of money it takes to produce the good.

The first important lesson a business person must understand is that <u>cost</u> and <u>retail price</u> are two different things.

The second important lesson that a single-worker shop businessman must understand is that the Labor Cost - what you pay yourself to make the product - is <u>not profit</u>.

Let us take a look at the 4 basic items that lead us to the retail price of a good - specifically a piece of maille.

1) Cost of Materials
The cost of materials is very easy to compute for maille. This is because there is very little scrap.

Let us suppose that you can buy a 1/2 mile (2,640 feet - 31,680 inches) spool of wire for $20.

Now take one of your maille rings and straighten it out with a couple of pairs of pliers. Measure how long it is. Let us suppose that one ring contains 1 inch of wire.

By setting up a ratio, we can determine the material cost for one ring. In words, this means if 31,680 inches costs $20, how much does 1 inch cost?

The equation looks like this:

31,680 inches / $20 = 1 inch / X dollars

Solving for X shows us that 1 inch of wire contains $.0006 worth of wire.

Remember, this is not the cost per ring - this is the cost <u>of materials</u> per ring.

In your example, your standard contains 4944 rings. Thus we know that your standard contains:
4944 rings * $.0006 materials = $2.97 worth of material.

Let's say $3. Thus we know that there is $3 worth of material in your standard.

2) Cost of Labor
The cost of labor is more difficult to compute. "Real" businesses arrive at this value by asking themselves, "How little can I pay and still attract the people with the skill sets I require?". You, being the sole worker in your shop, will probably not be hiring other employees. So the question you have to ask yourself is, "What is <u>my</u> time worth to <u>me</u>?"

How much is your time worth? Only you can know that. If you are a teenager and still in high school or even college chances are that you could not land a "real" job for much more than minimum wage - somewhere around $6 an hour these days as I recall. If, on the other hand, you are an attorney who gets paid $100/hour your time is worth substantially more.

Unfortunately, the reality for maille is that it is a very labor intensive product. This means it takes a lot of time to make it. Obviously if you rate your wage too high the end cost of the product will be so high it is likely no one will be willing to buy it.

Let us assume, for now, that you are going to pay yourself $10 per hour. This is not, incidently, a very good wage in most industrialized countries - especially with no benefits, like insurance, to go with it. $10 per hour works out to about $20,800 per year.

The next step is to quantify how much labor is in your product. The easiest way to do this is to do a "timed run" on a fixed number of rings. Say, 100 rings. Time each step of the operation to make 100 rings: winding, cutting, and knitting. Add all these times together, and divide by the number of rings you made - 100. This will give you the total aggregate time invested per ring.

Let us suppose that it takes you:
2 minutes to wind the coil
5 minutes to cut the coil into rings
12 minutes to close 1/2 of your rings (50 of them)
17 minutes to knit the other half, using your other 50 closed rings.

Total time: 36 minutes. 36 minutes / 100 rings = .36 minutes per ring. = 21.6 seconds per ring = .006 hours per ring

You now know that you invest an average of .006 hours in every ring of maille that goes into your product.

Going back to your example, a standard with 4944 rings in it, we now know that this standard took:

4944 rings * .006 hours = 29.7 hours to complete.

Let's just say 30 hours of labor.

Since we have decided your hourly rate will be $10 per hour, we now know that the standard contains:

30 hours of labor * $10 per hour = $300 labor cost

We now know that there is $300 worth of labor cost in the standard.

3) Overhead
Overhead is even harder to compute, because it is nebulous. Overhead is things like what portion of your electric bill can you attribute to your business? What portion of your water bill? Your rent? How much of the value of your tools? What disposable items did you have to buy to make the good (propane gas, sandpaper, etc.).

Most hobbiest maille makers have no good way to compute all of this, nor are the inclined to do so. As it turns out, the labor is so overwhelming a factor in the cost computation that we can probably ignore the overhead in our computation. Just be aware that by ignoring overhead we are underestimating the true cost of the good produced.

NOW we can compute the true cost of the good, ignoring overhead, of course. We know, from our previous calculations, that your standard of 4944 rings contains:

$3 Material
$300 Labor
TOTAL COST: $303

Something should be very obvious here: The vast majority of the cost (99%) is in the labor. What does this mean? It means that <u>your time</u> is the most expensive part of the good. What it also means is that if you want to reduce the cost of your good the only place you can really do it is by reducing the cost of the labor - paying your workers (yourself) less money.

Now you know why the first thing businesses do when they want to cut costs is lay off workers.

4) Profit
Now we get to the good stuff. Profit is your reward for your efforts. All businesses deserve to make a profit. They have risked time (that it took you to make the good) and capital (the money it cost to make the good) in the hopes that the good can be sold. No business does this for free, <u>nor do they do it "at cost"</u>. Businesses that don't make a profit don't stay in business for very long.

How do you compute profit? It's actually fairly simple. You charge as much for your product as people will pay. The difference between the price they pay and what it cost to produce the good is profit. The goal, of course, is to make as much profit as possible - you want a high profit margin That is, you would prefer to make much more money than it cost to produce the good. Unfortunately, the profit margin on some kinds of products is very small. You might only make pennies of profit per sale. Of course, volumes can make up for this - you might only make $.02 per sale but if you have a million sales that's $20,000.

You will want to adjust your prices so that the demand - the number of people who want to buy your good - matches what you are able (or willing) to produce. If 200 people want to buy your standards but you can only make 1 a week you need to increase your prices. Conversely, if no one wants to buy your product you will need to decrease your prices. This is called the Law of Supply and Demand.

Obviously, if you have to lower the price below the cost to produce the good in order to get people to buy it you are not only not making a profit - you are operating at a loss! It is costing you more to make the good than you are taking in at the sale. This, obviously, is bad. It also, I highly suspect, is where most amateur armourers operate - and most don't even know it.

While the actual sale price, and hence the profit, will be dictated by what the market will pay for your good, let us suppose, for this example, that you wish to have a profit margin of 5% - you want to charge 5% more than what it cost you to produce the good.

We know that it costs $303 to produce the good, and we know we want to achieve 5% profit. This means that the profit would be:

$303 * .05 = $15.15 profit

Now we are able to arrive at the <u>selling price</u> of the good:

$303 Product Cost + $15.15 Profit = $318.15 Selling Price

It's important to realize at this point that even if you sell your standard for $318.15 you actually only <u>made</u> $15.15. That's right - when your customer lays that $320 in your hands all your business made was a lousey $20. <u>This</u> is the primary problem with many small business owners - they don't understand the difference between the amount of money put into their hand at the sale and how much of it is really theirs.

What happens if it won't sell at that price?
The layman's definition of The Law of Supply and Demand is this:

Something is worth exactly what people are willing to pay for it.

What this means is that if no one is willing to pay $318 for your standard, it's not worth $318. In fact, if people are only willing to pay $100 for your standard, then it's only worth $100 - <u>despite the fact that it cost you more than that to make it!</u>

What people are willing to pay for a good and what it costs to produce it are two separate, unrelated things. Many people mistakenly think that if they have invested X dollars in a good that they "deserve" to get that money back. This is not so. People don't go shopping for items based on how much money they think the company selling the item deserves to get. They shop based on the alternatives to satisfy their need - in other words they shop based on how much your competiton charges for a similar product.

This may look like a lot of mumbo jumbo, but in fact it is relatively simple for a small businessman to compute a pretty good idea of what his costs are. And this is the only way to really understand whether or not you are making any money. You cannot, for example, work for 6 months on and off on a coif, sell it for $200, and then look at the $200 in your hand and think to yourself, "Wow! I just made $200!!!" If you haven't figured out the cost to make the coif, you don't know how much money you made. In fact, you may have lost money.

There is, however, somewhat of an alternative, and though it's certainly not good enough for real business practices, for something like the market of common, run-of-the-mill chainmail it's probably close enough.

If you want to know how much to sell a coif for, find out what your competitors are selling them for. If everyone else can sell a coif that is essentially the same for $200, you are not likely to command much more than that. Why would customers pay you more for a product they could buy from someone else? In this manner, you pretty much have already determined how much the market will bear for your product. What you will almost certainly find, however, is that if you match that selling price your labor rate is going to go through the floor - you will probably be able to work at Burger King and make more money per hour.

Your only option at this point is to differentiate your product from your competition, to make it more attractive. There are 3 ways you can differentiate your product from your competition:

1) Quality
2) Service
3) Price

Quality
You certainly can improve your quality. This has a couple of problems, though. First of all, improved quality usually means an increased production cost. You can usually cover this cost if the quality is enough to get people to pay a premium for it. But often times, especially with maille, it can be difficult to educate your customer to the point where they can appreciate your quality differences. Trying to convince your market that you have very flush cuts that are far superior to the ragged cuts of your competition can be difficult, for example. Your customers have to see the value in spending the extra money.

Service
Until you have been in business long enough to develop a good reputation, it is hard to demand a premium for good customer service. First of all, in today's environment good service is assumed. Face it - every advertisement in the world has the seller telling you: "We're #1!" "Customer Satisfaction is our goal!". Unless a customer knows you, or knows someone who has bought from you in the past, they have to basically assume that you are going to at least provide what you advertise. Of course, while good customer service is hard to use to increase sales, you had better believe that bad customer service will cost you sales. One bad customer experience will be relayed to 10 others. And in a small market with low volumes an armourer simply can't afford a bad reputation.

Price
Obviously, you can make your product more attractive by lowering the price. But as I hope I've demonstrated in this essay, you really don't have a lot of control over price - especially if you are producing a product very similar to others. You can only alter the price of your product by reducing your profits or reducing the cost to make the product. You don't <u>want</u> to reduce your profits and it's <u>hard</u> to reduce your costs.


Steve

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Forth Armoury
Highly authentic, affordable riveted maille.

The measure of a man is not in the steel of his skin but in the steel of his heart. - S. Sheldon

[This message has been edited by Steve -SoFC- (edited 08-08-2003).]

I started my armoury business with a clean slate. No reputation, good or bad. At this point, almost 3 years in, I believe I have a "good reputation". I've never missed an order, but as I do custom work I'm occasionally late. I've been as late as 2 weeks before, and I just sent out a suit that was 1 week late. However, I keep in frequent email contact, and I'll send things out ahead of schedule if at all possible.
I have a business plan (about a 50 page document), and I was well aware of horror stories about several year waiting lists for some armouries. I decided that I would not let that happen to me. I consider myself more of an "Artizan" than an "Artist"; I make useful things, but I can be depended upon.
Your reputation will reflect your business practices; poor or dishonest business practice will become evident soon enough, and if you're in this for the long term (as I am), then you have to be above board.

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Dalewyn
Dalewyn@dbis.ns.ca
www.AlchemyArmory.com

Thanks for clarification Steve.

I really appreciate the basic lesson in economics too.

Michael, thanks for the compliment. I really appreciate it.

Cheers

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www.hosekileather.com

[This message has been edited by Warren (edited 08-08-2003).]

Mr.Spiers,you are well spoken and I agree with what you say.Thank you for saying it so well.
I've got an e-mail from a buddy I have to forward to you about Roy Rogers,it just screamed at me to be forwarded to you after reading your postings.
James Whitlock