Running a Profitable Armoury - The Three Personas of the Armourer
By: Frederich Von Teufel
(This was originally a series of responses to questions on the Armour Archive. It has been collected here with minor editing for clarity's sake.)
To run an Armoury, or any craft business, you have to first figure out why you are running it, and what kind of worker you are trying to be. You see, this goes to the heart of being a successful armourer, in my mind. You have a choice in this of being either a Craftsman, an Artist, or a Businessman.
I started out, many years ago, to be a Silversmith. I realize that most of you don't really know what that involves, but suffice it to say that you are 90% a sheetmetal worker, and only 10% a jeweler. My schooling was heavy on the Craft of being a Silversmith, with a distinct push towards being an "Artist" (with fairly little explanation of what that meant other than "but what is this piece 'saying' to the people who view it?"), but I did have a couple of people who pointed out that there was an eventual goal of making a living off this as well. But HOW to make a living?
Economics courses came next, then others about how to run a small business, plus hundreds of books read, but they were all pretty useless when you realized that they were mostly "theory" as opposed to what really needed to be done in practice. (It's at this point that I wish I could point to my numerous posts, over the years here, about "production line" armouring as opposed to "hobby" armouring, but I can't. They've all been lost due to the multiple crashes of the board. One of these days I'll learn to archive my own posts. But not right now.)
Most of my internal arguments with myself have been with maximizing my time (and profits), while not sacrificing my "fun", since that is what turned me from being a Silversmith into being an Armourer in the first place. I ENJOY making armour. I love it more than I can express. But having to "punch the clock" makes me want to scream.
So what do I do? I daily try to figure out what weight I should give to the Craftsman, the Artist, and the Businessman.
The Businessman says you never give away so much as a penny. You never make just one of a particular item when you can make 20. All work is billed. You give the minimum that will fulfill the contract and not one iota more. No time should be wasted. The Businessman sticks strictly to the profit/loss formula, and secretly wishes he could do away with the customer because of how "demanding" they are. The Businessman is a prick, and I hate him. He tolerates the Craftman because he needs him, but he hates the Artist.
The Artist is eternally striving for perfection and the lost or hidden technique. He thinks that no surface should be wasted, that only the finest materials should ever be used, and that money should have nothing to do with it. The Artist only ever works on one piece at a time, because to do anything less is to divide ones attention. The Artists "armour" is more of a statement, and he isn't concerned if it actually works or not, what he wants is the piece to speak to the viewer. The Artist despises the Businessman, and thinks the Craftsman is missing the point.
The Craftman is the one who ends up doing most of the work, while the Artist and the Businessman scream at each other. He is happiest when he is watching a technique being applied to a piece, when a piece of good steel is transformed by skill into a piece of armour. He has no real business sense, and no real desire for art. He just wants to make armour. Good armour. Good armour that works. He would never send out a piece that didn't move properly or that gapped, because that would be an insult to himself and his craft.
Do you see my problem now, or is all this hyperbole confusing you all? I can't have just one of these guys, I need them all (although many of you are, no doubt, wondering why I need the Artist; it's because he's the most fun, and the one I want to be the most. He's the one who discovers new ways of doing things, new pieces of armour, not the other two.)
I don't have an apprentice, unlike many armourers. I do have occasional "grunt labor" to help around the shop (usually those who are time-rich, but money-poor, and want to work off the cost of money that way), but I haven't found anyone who has the particular drive (or insanity) of wanting to learn to do this as a craft or a business. That changes how I do things, since there is no one I can feel comfortable about delegating shop responsibility to; I must do it all myself. (I can hear the Businessman screaming now.)
So, how do I do that? I try to keep the Businessman happy by doing assembly-line construction, and refusing to take special orders. I keep the Artist happy by making pretty much whatever I want, making it as pretty or as simple as I want, and having no deadlines (because I never put anything up for sale until it's done. Yup, no orders at all. I sell at events exclusively. You either like what I have or you don't. If you do, you better buy it now, because you won't have a chance until you see me again, and who knows what the Artist will have made that time?) I keep the Craftman happy by concentrating on Articulation (the be-all and end-all of the Craft of the Armourer, IMO), and maintaining the basics of the rest of the craft.
I'm in a position (at the moment) where I'd like to be making more money, but I'm surviving, and I really have never been happier in my life. 'Course, who knows what'll happen next month when the Artist finds some new technique, or (heaven forfend) brings up 'gold-depletion gilding' to the Businessman again....
But how do you actually run the day to day stuff of being an Armourer? Read on...
As many of you old-timers know, every once in awhile I'll get a bug up my butt and make a post about how to run a shop (although usually it's in response to someone asking "How much should I charge for this?")
This time it isn't. It's just been something that's been on my mind recently. If you aren't interested, by all means go on to another topic. I'm going to be throwing formulas at you, so you've been forewarned.
Let's go back to that question I just mentioned. "How much should I charge for this piece of armour?" This is really easy, because you know exactly how much it cost you to make it, right? What? You don't? Oh boy.
Here is the formula you need to figure out how much it cost you to make something.
Materials are everything that went into making the item. That is the sheet metal, rivits, barstock, etc.
Labor is what YOU, as the business, are paid, otherwise known as the Shop Rate or Hourly Rate. This includes things like Overhead and cost of running the business. You know how much the Shop Rate is, don't you? What? You don't? Oh hell, I'll get to that in a bit, so just hold on.
Profit is the percentage of the previous three items (Materials, Labor, and Overhead). The reason this is included is simple. If it isn't included, then you are giving away things like Materials AT COST. All business are entitled to make a profit off such deals. Remember that we are talking THE BUSINESS here, not YOU the armourer. The business should be making a profit off your Labor, the Materials, and the Overhead. This profit should go back into the business to allow it to expand, and to account for the unforeseen.
Now let's have an example here. ABC Armoury has just made a helm. Using the above formula, the armourer knows that Materials cost $20.00, the Shop Rate was $25.00 per hour (and it took 15 hours to make the helm), and the Profit is 5% (quite small actually, most retail stores have a Profit of 50% or more, although that Profit is usually based solely on the Wholesale Cost of the item, and doesn't include things like Shop Rate.)
Now we have Materials ($20.00) + Labor (15x$25.00=$375) + Profit ([20+375].05=$19.75) = Cost of Helm ($414.75) This would normally be rounded up to $415.00
Now, that should be (crosses fingers) fairly straight forward and easily understandable. But how to figure out Shop Rate?
Well, there we get a bit more complex. You see, Shop Rate isn't just what you are getting paid per hour, it includes a whole lot more.
Let's use an example here. ABC Armoury has read a few books, been to a few classes, and has a friend who is a CPA, and knows that, if he wants to have a business, he needs to run it like a business. He totals up his entire expenses for his business and figures out what money he is going to be paying out each month. Here are his totals:
That's quite a lot, now isn't that? Remember now that these are all YEARLY TOTALS of the charges. It might look something like this:
Insurance - $800
Bank Charges - $180
Loan Payment and Interest - $1000
Shipping Costs - $200
Utilities - $2400
Advertising - $400
Rent on the shop space - $1800
Maintenance and Repair - $300
Consumables - $250
Travel Expenses - $600
Supplies - $150
Workman Pay - $27,000
Other Taxes - $600
Misc. - $150
Now, to figure out how much the Shop Rate should be, you divide the Grand Total by the number of man hours worked in a year, 1,440. (I'd like to point out at this point that the single largest cost in the preceding list was Workman Pay. Take notice of that again; the single largest expense was due to employee costs.)
35830/1440 = 24.88. Round up (NEVER down) to the nearest whole dollar, $25.00. See where that came from now?
So now, how much are you going to charge for that suit of armour you're building right this second?
Now to the next part! It isn't enough to know how much to charge for stuff, NO! You must now work on the other parts of the equation (yes, I know, you are probably sick of equations by now, but really this one has no math.)
That should be your watch word if you expect to be profitable. Think of it this way, is it more efficient to make just enough batter to make a single cupcake, put that batter in a cupcake mold, bake the cake, remove it, let it cool, and then go back and do it all over again for the other 23 that you want to make? NO! So why are you building your helms one at a time? What? It's a custom order? What has that got to do with it?
Okay, time to put on my Work/Motion Efficiency hat. Now, you DO have patterns that you know work perfectly, right? (Go and work on them until they are perfect, it will save you tons of labor in the long run.) Now that you have a pattern that works, you have to lay it out on the metal. But wait, I'm not talking about laying out just enough pieces to make one elbow cop (or even a pair) I'm talking about laying out enough to make at least a dozen pairs. Why? Well, you know you can sell them, right? Sure, not all at the local small event, but you know that they will all be sold in a reasonable amount of time. THAT'S why you lay out that many. But wait, there's more! Look! There's space still blank on that sheet of steel. You now lay out the pieces for the other 6 patterns that you know will sell for you. You lay out enough to replace anything you are out of stock on, and enough to anticipate sales for the next short time (this can be 4 weeks or 4 months, depending upon your sales.) That should mean that you are laying out enough to use up several sheets of steel. You do all that before you go on to ANYTHING else. Only when you have marked down all of the pattern pieces do you move on to the cutting out. You then take all those sheets of marked up steel and you cut out EVERY LAST ONE OF THOSE PEICES. You proceed like that from station to station throughout the whole process. This is the most efficient use of your time, and creates very little wasted motions.
This will also drive you abso-fucking-lutely insane. It is much more reasonable to delegate these kinds of things between you and whatever help you have. It doesn't take a Master to trace around a pattern, so these things can be given easily to whoever is there. Dishing, however, requires some skill, so only give that to those who know how, or are learning. Also switch positions between people several times a day.
What you will have is bins of various pattern pieces being moved from station to station as they are cut out, the edges ground clean, holes punched, etc. Likewise you (and whatever help you have) will be switching from station to station, performing the requisite action then moving the completed parts to the next station.
BUT WAIT! What's all this about "station to station"? Well, think of it this way. Your dishing stump/bench/whatever is a "station", i.e. the place where you perform that action. You should try to put your stations so that they flow from one to the other. You know that the edges of the pattern pieces with need to be ground clean once they are cut out, so put the grinding "station" next to the cutting "station". Likewise, the polishing should be next to the rivit-setting/assembly station, the hole punching next to the dishing, etc.
Now, I hear you say, what's this about not doing custom orders by themselves? How else would you do them?
Not only do I say that you don't do them by themselves, but that you should do multiple copies of that custom order. Why? First, if it isn't a piece you normally do, you might find that the first one doesn't work the way you thought, and that you might (heaven forfend) screw it up. Second, it doesn't take twice as long to do two of a piece if both pieces are done at the same time. And finally, you'll find that you learn and get better at a piece the more you do it, so the first one may not be too good, but the fifth one is excellent. Best of all, it gives you multiple pieces to sell, where you'd only be selling one otherwise.
Now why am I harping so much on efficiency? What does it matter if it takes 10 minutes longer to make an elbow cop one way rather than another?
The reason is that the time required to make a piece of armour is the single most expensive part of the whole process. How much does a sheet of steel cost? How much of that sheet does it take to make an elbow cop? We're talking about, what, $2 or $3 of steel here? How much do a few rivits cost? What about the consumables, the sanding belts, electricity, and whatnot? Another couple of bucks total? And how much does that elbow cop sell for? $40 or more? Why? Because it took $35 of TIME to make it, that's why!
Now what if you could lower that time, so it only took you $30 of labor to make that cop? You could either lower your price and sell more of them, or keep your price the same and increase your profits!
Now do you get it?
Think "factory"; think "assembly line"; think "efficient". Once you are thinking those things, the profitability of your shop will soar.
Something's wrong. You carefully (and laboriously) worked out what you needed to charge for your armour so you could stay profitable. You meticulously set up your shop so you could run it as efficiently as possible. Now you sit with dozens of helms, legs, arms, and what have you, stacked around you and you don't seem to be selling it. What could be wrong?
Perhaps it's that no one knows you are an armourer? Perhaps it's that you don't go to events or fighter practices, don't have a catalog, don't advertise your website (and don't even have a website), and don't tell people that you are an armourer? There is a very old saying, "build a better mousetrap, and the world will beat a path to your door." Bullshit. If you want people to buy your product, YOU have to find THEM.
Let's talk some realism here. There are more than 6 BILLION people in the world today. Unfortunately, most of them don't want your product. Almost ALL of them will never hear of you, no matter what you do. If you are lucky, you can get a tiny percentage of North America and Europe to know you exist. However, with proper marketing, you can get more customers than you would ever be able to build for.
Okay, let's start simple. You're on the internet, so set up a website. There are dozens of places that will give you web space free of charge, and will even show (and guide) you through the steps of setting up the page. But wait, you aren't done yet. How are people going to find that page? That's right, search engines. Go to all the major search engines (no, I'm not going to give you a list, you'll have to figure this out for yourself) and submit your site to them. Don't bother to pay some idiot "company" to submit it for you, that's nothing more than a waste of money. It doesn't take that long to submit your site, one evenings work will get you set up with all the search engines you need. THIS WORKS. It may take a week or so for them to process your submission, but then each and every time someone puts in "ARMOR" they will have YOUR site in the list. If you want to improve your standing in those lists, there are MANY sites that show how to work your HTML so that the search engines like you more.
Do you have a catalog? Why not? It doesn't have to be a 50 page 4 color glossy leaflet with professional photography and super-models, it can be just a single black and white photocopied sheet. Keep it cheap, you're giving these things away here. Selling your catalog might pay your duplication costs back, but it's restricting your clientele to those that are willing to buy catalogs.
As a brief aside, photos are essential. Even the best description in the world, written by the world's greatest novelist himself, won't sell as well as a single photo of that product. And when you do have a photo, make it a photo of the highest end version of the product, the one with all the gewgaws and bells and whistles, rather than the basic lowest end version. If the customer can see it, they are more likely to buy it. Remember, materials costs are cheap, you want to sell LABOR, that is where your profit is.
Now, go to where the customer is. Go to events where fighters will be. That can be LARPs, SCA, Acre, Darkover, whatever, just so long as there are fighters there. Set up and run a merchant booth (doesn't have to be big, it can be a dayshade with armour set out on a blanket.) Go to fighter practices as well. You can find out when and where those events/practices are by hitting the websites those organizations have. Remember to bring not just finished pieces, but catalogs and photos of your other works. The more a customer can see of your work, the more likely they are to buy.
Now, consider putting an ad in magazines directed towards those that participate in the medieval lifestyle. This can be expensive, but it the long run it pays back more than you have put out. Avoid publications that aren't specifically targeted towards your market. Cosmopolitan may have a huge readership, but how many of them would buy armour? Try to find those publications put out by the pertinent organizations themselves, such as Tournaments Illuminated, which is delivered to those in the SCA, look for small local monthly newsletters as well, and also find the more mainstream publications directed to those who recreate medieval periods, and those targeted to the Renaissance Faire market.
Speaking of Renn Faires, you may want to explore becoming an exhibitor at one (or more). Many of the more popular Faires can have over 60,000 customers attend A DAY. Imagine that many potential customers, along with the fact that the Renn Faires can support a much higher price point. Renn Faires can be very difficult to get into however, so you may want to see if you can find a merchant who is already approved and see if they are interested in carrying your stuff.
I'll also point out that those involved in pen-and-paper Role Playing Games buy armour too, as well as those into Sci-Fi/Fantasy. You might consider Game Conventions, either exhibiting or at least dropping off a stack of your catalogs on their advertising tables.
How about museum gift shops, antique stores, interior decoration shops, knickknack shops? All those places might be interested in having a piece or two of armour to sell to a customer. You might also consider selling to the Art crowd; try local galleries and such. The possibilities are myriad. Don't necessarily limit yourself to the "using" crowd, there are those who might want it just for the "cool" factor.
One final note about advertising. While it's certainly okay to promote yourself, and say how wonderful an armourer you are, it is very bad form to do so by putting down your competitors. In other words, it's okay to say that your gothic fluting technique is exceptional, but not to say that you armour fits and moves better than XYZ Armoury's armour.
Figuring out Market Price
Now, figuring out how much to charge for a piece of armour was the start, but it only gives you a base price, a guideline. You should NEVER price your work under the base cost of that work. Remember, the base price of an item is Labor+Shop_Rate+Profit. However, that may not be what you should actually price the work. Think of it this way, while you NEVER go under that price, the market demand may allow for a higher price. But how do you figure out what that price is?
Now, I'm going to be heretical here. I'm not going to use any math or statistics to figure out what the market demand can support. I'm simply going to use logic and actual practice. But first, let me give you my philosophy on selling what you make. You should be able to sell everything you make, but not one piece more. In other words, the market demand should exactly meet what your creative output can create.
Let me give you an example here. (These figures aren't real, just for discussion purposes.) Armourer X can produce 25 helms a year, 100 knee cops a year, and 100 elbow cops a year. He sells the helms for $150 each, and the cops for $25 each. At those prices, the market would buy 50 helms, and 150 cops of each type. Now, if Armourer X RAISED his prices to $175 for helms, and $35 for cops, the market would buy 25 helms, and 100 cops of each type. THAT is the price he should be charging. If, instead, Armourer X raised his prices to $200 for helms, and $45 for cops, he would only sell 15 helms, and 75 cops of each type, which is raising his prices too far, as he wants to sell EVERYTHING he makes. Does that make sense now?
But, how do you figure out what is too high, and too low?
Simple. Sell your armour. You already know the base price to sell your armour at. Try a few events (or a bunch of events) at that price. It'll establish you as an armourer, and get your name known. Watch how quickly various pieces sell. Do you always sell out of helms before you sell out of elbow cops? Do you sell out of gauntlets before selling out of pauldrons? Is there something that you don't sell out of? Keep records of what you sell and what you make. After a few events, you'll probably find that there are things that sell better than other things. You may find that there are things that sell out very quickly, while other stuff hangs around throughout the entire event unsold. Ideally, what you want is EVERYTHING to sell during the event, but not so quickly that you run out of stock. If the last items sell the last afternoon of the last day, then you've reached perfection.
But that is unrealistic. What may actually happen is that all of your elbow cops sell out the first day, while your knee cops don't sell out until three days later. And what if you're doing a one day show? How do you tell how things are selling? Remember when I told you to keep records? This is what that's for. Build up a record of how much selling at events you've been doing, as well as mail order, and compare that to what you've been making. Over a period of time, you'll notice that certain things sell VERY well, while others sell only moderately or poorly.
Here's the secret. On the things that you consistently sell well, raise the price. Whoa! Was that too complex for you? It's not really difficult, if the market is consistently buying a product at a particular price, they are saying that they feel it is a good deal. Market demand is high. If you raise the price, you are lowering the market demand. WHICH IS WHAT YOU WANT. You only want the demand to meet the level you can supply, and not one iota more. You will probably find that there are items you make that will never sell for more than the base price, while some will be in high enough demand to double their market price, and others will fluctuate in price depending upon when it's being sold and where.
Catch that last bit. Some prices will fluctuate. The only way you can tell if you've priced something too high is to watch your records. If something stops selling well, you need to drop its price back down to where it will sell again (excepting if that would drop it below it's base price.) If something won't sell for it's base price, then it isn't worth making.
To wrap this up, let me give you a real life example. I can make baskethilts, but I don't like the result unless I gas weld them. I just don't like the look. However, gas welding is a lot more time consuming than if I were to arc or Mig weld them. If I try to sell my baskethilts, I'd have to charge a minimum of $55 for them, up to $85 or more for the fancy ones. However, in my experience, the best price point for baskethilts is between $35 and $45. I just don't sell many of them at a higher price. If I spend the time making arm harnesses (of which I can sell all that I make) that I spent making baskethilts, I make a better return for my time. If my profit is better on arm harnesses or helms, then it would be silly for me to make baskethilts. That is why I don't make baskethilts.
Here's the final part of the whole equation, and what might just be the most critical part of all. It doesn't matter how much you price your stuff, how good it is, or how broadly you're able to advertise it. If you don't treat your customers well, then you won't have customers at all.
Let's look at the portions of your work where you come in to contact with your customer.
Now, taking them a step at a time, let's look at what you should be doing to make sure that your customer service is good.
First, when your customer is looking at your catalog, you need to make sure that your catalog answers as many of their questions as possible. You need to put yourself in your customers place and think of all the things they would want to know. What's it look like, what's it made of, will it fit me, does it meet regulations, how long will it take for me to get it, etc., etc., etc. Try to place the answers to all of the questions in your catalog, as this will help them make their decision as to where to buy from you or not.
Second, when you are meeting your customer at events. You will have many, many, MANY, people who will just want to look at your stuff, or ask questions about armour in general. Almost all of them will not be buy anything from you, however it isn't a waste of time to deal with these people. Leaving them with a good impression might bring them back to buy in the future. Be friendly and don't hardsell. Make sure that you are actually around to answer questions that customers might have, rather than in the back shooting the shit with your buddies.
Next, when a customer actually buys from you, be pleasant, thank them for buying from you, and let them know if there are any problems they encounter with the armour that you will assist them with fixing it.
Fourth, and here is where things can start to fall apart, when a customer orders something special from you. Make sure you actually know what it is your customer is ordering. There is nothing worse than making a custom piece for a customer, only to have them unhappy because their pigfaced bascinet isn't pointy enough in front and is too pointy in back. I request specifics of design from my customers, and photos of pieces that they want their suit based on. I also ask probing questions about what, specifically, they like about the piece. Is it the brass trim? The pattern etched into the brass trim? The shape of the skull? Do they want alterations made, and if so, specifically what alterations and why?
Fifth, your customer will like to know how things are going on their piece of armour. They would love to know when it's been started, when it is being worked on, when it's ready for delivery, and have daily updates on all of it. This, of course, will drive you crazy. I have invested in postcards that I can initially send to my customer to let them know when the deadline for the piece is, and then to let them know when the piece has been finished and is ready to be shipped. You can also use email, but I find that bulkrate postcards are cheap and are immensely satisfying to the customer. Having a piece of paper in their hands is reassuring. And, as a craftsman, having the customer out of my hair so I can work is worth every penny. There is a rule of thumb when dealing with business correspondence; all emails should be answered within 24 hours (even if it's just to say, "I don't have an answer for you at the moment, but I wanted to let you know I had received your mail and am working on it."), and all snailmail should be answered within 48. Do your best to stick to that rule of thumb and you'll have happy customers.
Finally, expect to have customers come back for help after buying your armour. It would be nice if they only came back to compliment you on a job well done, but those customers are few and far between. Usually it will be because the armour piece has had a problem, or they need advice in strapping and such. As much as you may not want to take the time, help them anyway. This is the after-care that fosters such good will in your customer and future customers. The modicum of time invested in fixing the problem is worth much more than the time saved in not dealing with it. A happy customer may tell a couple of his friends he is happy, but an unhappy customer tells everyone how much you suck.
Do keep in mind that there is such a thing as too much customer service. You need time to do things in the shop, and to do things just for yourself. As long as you are doing stuff for the shop when you should be doing things for the shop, don't feel guilty if you spend an evening doing nothing more than watching TV or reading a book. During that time, ignore the shop phone if it rings, that's why you have an answering machine, and deal with those calls when you are actually back in the shop the next day. And try to actually keep a reasonable shop schedule, where you are in the shop from 10 to 6, so you can still get stuff done for yourself. Postscript
Does doing all these things guarantee you a successful shop? Nope. Unlike certain proverbs, building a better mousetrap does not guarantee you success, it merely means you personally won't have lots of mice. The best you can do is to walk the road to success, have fun along the way, and hope you eventually reach your goal.
Here's to a good journey,
Frederich Von Teufel