Newsletter - December 17, 2009

The Jewelry Crafter

A newsletter for the home jeweler

This newsletter will be published every 2 weeks, and will include hints and tips for your jewelry business. Any feedback or comments about the topics presented here are always appreciated. Click here to e-mail us.

If you have an idea for an upcoming article, or would like to submit an article for the newsletter, please contact us. Anyone who submits an article will receive a permanent link to their website in a special section of our link pages.

Pricing Your Jewelry

by

Mary Harvey

Determining what price to charge for your jewelry creations can be a very confusing undertaking. How do you know if you are charging enough, or too much? You have to make enough of a profit or you won’t be able to stay in business, but you don’t want to price yourself right out of the market, either. This week, we will discuss how to determine what to charge for your creations.

To get an accurate idea of what to charge, you have to know how much the piece cost to make. There are many different pricing formulas out there, but all of them use the same things to come up with a calculation:

• Price of materials – keep good records of the materials used in your project. You have to know how much that wire is per foot, how much the stone or beads are, and don’t forget the findings
• Labor cost – this is a mistake a lot of artists make: they don’t charge for their time. Your time isn’t free, so be sure to charge for it. Many artists charge from $10 - $20 or more per hour. Keep track of how long it takes to finish a project, and calculate the labor cost.
• Overhead – Packaging, utilities, rent, insurance, shop or booth fees, etc. all cost money. You should add a small amount to your base price to help cover these expenses. How much to charge depends on your expenses. You can either add a fixed amount to the total, or calculate a percentage of the parts and labor cost. Either way, you should add something to help cover overhead.

One formula takes your cost of materials, multiplies it by 2, adds in your labor cost and the overhead percentage to get a wholesale price point. Multiplying the materials by 4 gives you the retail price.

Another formula takes your cost of time and materials, and multiplies that by 2.5 (to cover supplies and overhead), to get the wholesale price. Multiplying by 4 gets you the retail price.

These are just 2 examples. there are many pricing formulas out there, but all of them take into account the 3 points listed above. What you charge for your jewelry will vary depending on many things: complexity of the design, unique materials used, market conditions, and your expertise. All of this must be taken into account when determining what to charge.

A great way to figure out a selling price for your jewelry is to use a pricing program. There are several out there that will help you price your creations. One is Eni Oken’s pricing calculator for Excel. Another is Jewelry Designer Manager. Both of these are great programs. You can also find free calculators by doing a Google search.

However you calculate your jewelry selling price, you need to be sure that you charge enough so that if you sell something at wholesale, you are still making a profit. But the most important thing is to know how much the piece cost you to make, including your labor. You don’t want to work for free, and you need to be able to make a profit to stay in business.

HAPPY HOLIDAYS FROM CUSTOM JEWELRY SUPPLY!

Custom Jewelry Supply - Supplies for the Jewelry Designer or Wire Artist

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