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If demand so significantly exceeds supply, why aren't folks with these skills raising prices?

by harryh 5y ago

jedberg 5y ago
They already charge a significant amount. But that doesn't increase the supply of master craftsmen. You can't just make more masters. :) Also, there is still a price ceiling. If they charge too much, people will choose the cheaper alternatives even if they aren't as good.
- Gigachad 5y ago
  > You can't just make more masters. You can given enough time. Your second point is more likely the real reason. These jobs might seem to pay lots from the outside but if you dedicated the same time to a more boring job like management you very quickly make a lot more money with almost unlimited room to bump your prices.
  - Sebb767 5y ago
    > These jobs might seem to pay lots from the outside but if you dedicated the same time to a more boring job like management you very quickly make a lot more money with almost unlimited room to bump your prices. This is from a German perspective, but here this is absolutely untrue. Masters earn a hell of a lot of money and business is basically limitless, even for masters. Being charged 120€-150€ per hour plus drive for a master and an apprentice is not unusual. Add to that that they start earning 5-9 years earlier. Sure, they start lower, but they have a lot of time to catch up as well as save money. In my circles, these guys drove awesome cars while us students survived still survived on ramen (or parents). Lastly, you can absolutely scale your business. If you go on to be a freelancer or even make your own company and hire people, you can get very far, if you intend to do so. Sure, the absolute top of white collar workers might earn more; eight digits is probably not going to happen. That being said, that's the 1% of the 1%. Here in Germany, 100k€ per year is already a really high salary and to get there in white collar work, you'll need to make quite some career jumps. For masters, on the other hand, this is absolutely doable if you don't suck at your job.
chaircher 5y ago
A lot of these people prefer the stability of knowing their income over a long period of time, rather than focusing on maximising profitability and therefore losing time working on their craft and also introducing instability longer term. My job is similar to this sort of thing and I have gone down the maximising profit route, and even though I've not pushed it to an extreme it can be difficult to stay disciplined about it. You lose a lot of time to it, as well as intelectual bandwidth - you're bouncing back and forth between business brain and craft brain a lot more. Crafts people also tend to be more community orientated which likely reflects in their pricing.
- harryh 5y ago
  Super interesting answer. Thanks!
OJFord 5y ago
Not to discount the answer you've had, but to offer another factor: 100 * £10 > 50 * £19 It plays into the other really: you have to multiply your fee by more than the reduction in volume to make more money; if you break even on the trade, in a way that's great, less work same money, but now you're not practicing. So there's a trade-off there, and for it to be obviously worth it, there really has to be a significantly outsized boost to fee compared to reduction in number of people prepared to pay it, that just isn't going to happen unless you had it really wrong to begin with. (Maybe if you're already on the very high designer end you can suddenly go 10x or more as a result of being 'discovered' or going 'viral'? But not lower on the ladder, like the difference between DIY shop 'it works' vs. bespoke; carpenter vs. joiner; as discussed above.)
rdtwo 5y ago
Because people don’t actually want to pay 5x-10x for craft items and that’s how much it costs. Craftsmen are in competition with labor in the 3rd world that gets paid 2-10$ a day instead of 50$ an hour

If demand so significantly exceeds supply, why aren't folks with these skills raising prices?

by harryh 5y ago

If demand so significantly exceeds supply, why aren't folks with these skills raising prices?

They already charge a significant amount. But that doesn't increase the supply of master craftsmen. You can't just make more masters. :) Also, there is still a price ceiling. If they charge too much, people will choose the cheaper alternatives even if they aren't as good.

Gigachad 5y ago
> You can't just make more masters. You can given enough time. Your second point is more likely the real reason. These jobs might seem to pay lots from the outside but if you dedicated the same time to a more boring job like management you very quickly make a lot more money with almost unlimited room to bump your prices.
- Sebb767 5y ago
  > These jobs might seem to pay lots from the outside but if you dedicated the same time to a more boring job like management you very quickly make a lot more money with almost unlimited room to bump your prices. This is from a German perspective, but here this is absolutely untrue. Masters earn a hell of a lot of money and business is basically limitless, even for masters. Being charged 120€-150€ per hour plus drive for a master and an apprentice is not unusual. Add to that that they start earning 5-9 years earlier. Sure, they start lower, but they have a lot of time to catch up as well as save money. In my circles, these guys drove awesome cars while us students survived still survived on ramen (or parents). Lastly, you can absolutely scale your business. If you go on to be a freelancer or even make your own company and hire people, you can get very far, if you intend to do so. Sure, the absolute top of white collar workers might earn more; eight digits is probably not going to happen. That being said, that's the 1% of the 1%. Here in Germany, 100k€ per year is already a really high salary and to get there in white collar work, you'll need to make quite some career jumps. For masters, on the other hand, this is absolutely doable if you don't suck at your job.

chaircher 5y ago

A lot of these people prefer the stability of knowing their income over a long period of time, rather than focusing on maximising profitability and therefore losing time working on their craft and also introducing instability longer term. My job is similar to this sort of thing and I have gone down the maximising profit route, and even though I've not pushed it to an extreme it can be difficult to stay disciplined about it. You lose a lot of time to it, as well as intelectual bandwidth - you're bouncing back and forth between business brain and craft brain a lot more. Crafts people also tend to be more community orientated which likely reflects in their pricing.

harryh 5y ago
Super interesting answer. Thanks!

OJFord 5y ago

Not to discount the answer you've had, but to offer another factor: 100 * £10 > 50 * £19 It plays into the other really: you have to multiply your fee by more than the reduction in volume to make more money; if you break even on the trade, in a way that's great, less work same money, but now you're not practicing. So there's a trade-off there, and for it to be obviously worth it, there really has to be a significantly outsized boost to fee compared to reduction in number of people prepared to pay it, that just isn't going to happen unless you had it really wrong to begin with. (Maybe if you're already on the very high designer end you can suddenly go 10x or more as a result of being 'discovered' or going 'viral'? But not lower on the ladder, like the difference between DIY shop 'it works' vs. bespoke; carpenter vs. joiner; as discussed above.)

rdtwo 5y ago

Because people don’t actually want to pay 5x-10x for craft items and that’s how much it costs. Craftsmen are in competition with labor in the 3rd world that gets paid 2-10$ a day instead of 50$ an hour