Designing unique jewellery and creating at your bench is just the start of your jewellery journey. Pricing your finished pieces is important if you want to be successful selling on any platform, or even to your friends. There are many “formulas”, thoughts, and practices when it comes to pricing jewellery, but I hope this post will be a helpful reference to anyone looking for a starting point when pricing their jewellery.
Pricing your hand made creations can be extremely daunting, even for a seasoned veteran. I have been selling my work for about 10 years, and will gladly admit that I still struggle with pricing my jewellery. I will jump into a fairly technical formula for pricing jewellery, and then I’ll add my two cents about what I’ve learned by being out there selling in the real world.
1. Keep track of your costs
First and foremost it is imperative to keep track of how much your supplies cost. This also includes all of your ‘extras’ like business cards, packaging materials, website fees, gas to and from markets, booth and table fees for markets. This stuff adds up quickly! The better you keep track of these expenses, the easier it is to break down the cost of making each piece of jewellery. If you buy 5 feet of 20 gauge Argentium Sterling wire to make ear wires for $20.25 and you make 10 pairs of ear wires, each pair cost you $2.04. This needs to be added to any pair of earrings using these ear wires. I keep a ‘project journal’ in which I keep track of how much of any given material I use and a ‘recipe book’ of sorts with all my costs for supplies to make items. This may seem like a lot of ‘book keeping’ but it truly saves a lot of time in the long run. Oh, and always remember to KEEP ALL OF YOUR RECEIPTS!!!
2. Keep track of your time
This is just as important as keeping track of your cost. If you’re like me, when you’re making earrings you make a few or many pairs at a time. So, keep track of how long it takes you to make all of them and then divide by the number you’ve made. If you’re making a one of a kind piece, jot down in your project journal how long you work on it each day. The difference between a hobby and a business is whether you get a paycheque. By keeping track of your time, you can pay yourself a wage for your work. The amount you decide to pay yourself will ultimately depend on you, but keep in mind things like how long you have been making jewellery, your training, and your portfolio. JUST BECAUSE YOU ENJOY MAKING JEWELLERY DOESN’T MEAN YOU SHOULDN’T GET PAYED TO DO IT!!! You should at the very least pay yourself a minimum wage.
One big hurdle for many is believing that your work is ‘worth it.’ When you love making jewellery, it can be difficult to pay yourself for your time. It is important to value your own experience, training and talent and to charge appropriately for it. It’s important to realize that the creativity and artistry of making jewellery is not something that the vast majority of the population can do. What you do is special. People are willing to pay for things they like that they can not make. It seems like a relatively simple idea, but as I said, it can take some time to grasp this. So now, when you’re pricing your jewellery, always compensate yourself for the time it took you to make it.
Ok, time for a (little?) rant. I can’t tell you how often I hear vendors at markets or craft fairs telling me “well there is no way to make a living doing this. It’s just for fun. No one will pay enough for this to pay me for my time.” Ugh! this drives me nuts. For one thing , if we all charged for our time, yes the prices would go up, but our products would be valued. When a vendor sells their work for the cost of materials without charging for their time, it undercuts any vendor who is actually trying to make a go of this business. Your average consumer isn’t going to understand that vendor A is doing this as a hobby and only wants to cover their supply costs, and vendor B who is selling a similar product is trying to put food on the table and shoes on their child. Vendor A is not valuing his/her talent!
3. Calculate the price
I have over the years come across many ‘formulas’ for pricing jewellery. Using a formula will give you a good starting point and you can tweak it as needed. The formula you choose will depend on whether you are selling retail (directly to customers) or wholesale (in larger volume to stores for example).
BASIC FORMULA:
Time + Material = Cost
Cost x 2 = Wholesale
Wholesale x 2 = Retail
So this formula works pretty well, but in my opinion, it really doesn’t account for ‘other EXPENSES’ like website fees, business cards, marketing material, packaging material, market/craft fair booth fees, and your STUDIO. Getting your metalsmithing studio set up is a large, but worthwhile expense. You need to have the right tools and equipment to do metalsmithing. Factoring in the cost of your tools and set up is an important expense to consider in your formula. So how do you apportion all these costs to your pieces? What I do is “charge” a studio and other expenses fee of $70 for a 7 hour day (or $10 per hour in my studio) to cover the cost of my original set up as well as tool replacement costs, ongoing supply costs, etc. Charge what you think will work for you, but remember to include your studio and all other expenses in your formula.
So, tweaking the formula like this makes more sense:
Time + Material + Expenses = Cost
Cost x 2 = Wholesale
Wholesale x 2 = Retail
To fully understand this formula and why I think it’s a better option, I want you to go read this article I love how she explains why you shouldn’t charge your wholesale price unless you are selling to a wholesale account! Don’t cut yourself short just to “break-in” to the market (e.g. selling to customers at wholesale prices). This will only get people used to cheap prices, and it will be difficult to raise them later on, jeopardizing your chances of ever making your business profitable. It’s better to redesign or reject pieces that don’t cover their costs.
4. Market research
This is a very important part of coming to your final prices. I am always looking at what others are selling their products for, and how successfully they are actually selling them. Search the web and visit stores that are carrying similar products to what you make and take note of what they are selling them for. It’s important to keep your pricing within a reasonable range of what’s already on the market. I tend to start with the highest price that I think the market will bear; it’s easier to lower a price slightly than to raise it. Also, ask for help from friends and co-workers. What would they pay for a piece of your jewellery? Examine past experiences. Have you tried to sell your work at a certain price without success? Did your work sell quickly? Look at past sales and evaluate what works and what doesn’t. I am constantly tweaking my pricing to find that sweet spot. Another great idea is to ask someone else who makes and sells jewellery to evaluate your prices. Sometimes our peers see our strengths and weaknesses better than you might be able to, and having an educated second opinion can be very helpful.
There is also the whole psychology of pricing. I’m definitely not an expert on this matter. I do know however that it’s important to keep your prices consistent. If your prices end in .99 then make sure they all do. I choose to end all of my prices with a 2 or an 8 (not sure exactly why, maybe I like 2’s and 8’s) but I am consistent.
5. Re-evaluate
It is imperative that each one of us takes a step back once in a while to look at the big picture. Not only to make sure that our work is going in the direction we want, but to make sure we eliminate the things that aren’t working for us. This includes re-evaluating pricing and determining whether or not certain pieces are worth making.
6. The big picture
When pricing your work, there are so many factors to consider. Spend a couple of minutes and think about where you want to be at the end of this year, five years from now, 10? You don’t have to decide right now if this is the ‘career’ for you, but if you want to see growth and sustainability, and ultimately profitability, then making sure you include everything in your pricing is imperative. Remember that you are the CEO, the production department, designer, marketing department, salesperson, accountant, and janitor! I wouldn’t do all those jobs for no pay!
What you charge for your work is up to you in the end and when all is said and done, you need to be confident with your prices and feel comfortable charging them. Don’t be afraid to try. Get your work out there and give it a shot. Remember the greatest failure is the failure to try!