The Order to Run the Numbers In

The six calculators on this site connect: each one's output is the next one's input, and running them in the right order turns a set of guesses into a coherent price.

Start with what the year has to earn

The hourly rate calculator is the foundation, because everything else is measured against it. Take-home income plus overhead, grossed up for tax, divided by the hours you can actually bill.

Forty thousand of income, eight thousand of overhead and a 25% set-aside means 64,000 of required revenue. At 20 billable hours a week over 46 weeks that is 69.57 an hour — a floor, not an aspiration.

Then find what a piece costs to make

The materials calculator converts bulk purchases into a true per-piece figure by costing the fraction consumed and dividing by the batch.

Keep this separate from overhead. Materials scale with production and belong in the cost of a specific piece; studio rent does not and belongs in the rate.

Price the piece

The pricing calculator takes both: hours at your rate, or area at a per-unit rate, plus materials, plus overhead, plus a markup.

Whichever method you use, check it against the other. A size-based price implying an hourly rate below your floor is a size rate set too low.

Work backwards from the channel

A price is not final until it accounts for who sells it. The split calculator inverts the commission: netting 800 at a 50% split needs a retail price of 1,600, not 1,200.

Set the price so the highest-commission channel you use still clears your floor, then hold that price everywhere.

Quote commissions from the brief

For commissioned work the commission calculator replaces the whole chain, building from a base rate through complexity, subjects, revisions, licence and deadline.

The base rate should itself trace back to your hourly floor — a base that cannot cover the hours a simple piece takes is a base that loses money every time it is used.

Check editions separately

Prints and product lines are a different problem, and the break-even calculator is the one that governs. Contribution margin per unit, fixed setup cost, units to break even.

A negative contribution margin returns no break-even at all, which is the correct answer to "how many do I need to sell?" when the answer is that no number works.

The order matters

Rate, then materials, then price, then channel. Working the other way — starting from what feels sellable and reverse-engineering costs to fit — is how a practice ends up busy and unprofitable at the same time.

Every figure here is an estimate and none of them knows your market. What they give you is the floor: the number below which making the work costs you money, which is the one thing you cannot afford not to know.

The chain, with this studio's numbers

One: the rate. $35,000.00 of take-home plus $9,000.00 of overhead, grossed up for tax and divided by 920 genuinely billable hours a year, gives $63.77 an hour.

Two: the materials. Every consumable, at the share this batch used, divided by the batch size.

Three: the piece price. Hours at the rate, plus materials, plus overhead, plus markup — or the same thing by area.

Four: the channel. The retail price that still nets what you need after commission. To take home $800.00 at 50% the piece has to retail at $1,600.00.

Why the order is not negotiable

Each step is an input to the next. The rate needs the billable hours; the piece price needs the rate and the materials; the retail price needs the piece price and the commission.

Start anywhere else and you are guessing at an input. The commonest version is starting at step four — picking a retail price that feels right for the market — and working backwards to discover the rate it implies. That is worth doing as a check and it is a terrible way to set a price, because the answer is frequently below minimum wage and there is nothing to do about it once the price list is printed.

Run it once a year

Overhead drifts, materials get more expensive, and the billable-hours figure changes as a practice matures. A rate set three years ago is funding a life that cost less than the current one.

The whole chain takes an hour with real numbers in front of you, and it is the hour that decides whether the other 920 are worth anything.

What changes and what does not

The rate is the slow-moving number: set it annually and leave it. The materials figure moves per body of work. The retail price moves per piece.

So the annual hour is spent on steps one and two, and steps three and four are a two-minute calculation each time you make something. Treating all four as an annual exercise is why price lists go stale; treating all four as a per-piece exercise is why nobody does any of it.

The one-line version

Rate, then materials, then piece price, then retail. Each number feeds the next, and skipping a step means guessing at an input rather than saving time.

What to do with the output

Write the four numbers on one page and keep it where you quote from: the rate, the material cost per piece, the piece price at your usual size, and the retail price for each channel you sell through.

Almost every pricing mistake is made under time pressure — an enquiry that needs an answer today, a gallery asking for a price list by Friday. A page you worked out calmly in an hour is what stops those moments from setting your prices for the next two years.

The first time is the slow one

Gathering a year of overhead and one honest materials batch takes an afternoon. Every subsequent piece takes two minutes, because three of the four numbers are already on the page.

That asymmetry is why so few people do it: the cost is entirely up front and the benefit arrives quietly, one correctly-priced piece at a time, for as long as the practice lasts.