I’m sure my questions are probably getting annoying by now, but I was wondering if you all charge a profit margin to your customer on the stones in their pieces? So say you pay $50 for a stone, do you charge a percent on top of that to the customer? If so, how much? I know labor is firm, no discounting there
I think this has be covered a number of times in the archives. In my opinion it you have to buy something for a project you have to charge something for it. Your time and effort in finding the right piece of material for the job head to be worth something. The fact that a customer values your art has to be with something. We aren’t at the Star Trek replicator age where everything is free for the asking. And the customer has to pay something for the art. Take a look in the archives. I think you will find some good suggestions there.
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I do not know your situation.
When I had a retail brick and mortar
store, I had overhead, rent, utilities,
consumable products used in making
jewelry, property tax on equipment…
When you have your car repaired, do
you think you are charged the price for parts
that the repair shop pay for them. Of course
Depending how good you are at sourcing
stones depends on how much you can charge.
If one company charges $50, and another
company charges $100 for the same thing,
you have work with the budget of the customer,
and part of your job is to give the best value to
the customer for the money they are spending.
I used to quote from a company that has
high prices. If the customer was okay with the
quote, I would try to find the exact same quality
from another source that cost less, and I would
either charge the customer less telling them
I got a better deal, make them happy I saved
them money, or I would make more profit
on the stone, I paid myself for the work I did
to find a lower prices stone.
Mark up on stones is 50-150 %.
Depends on the customers budget and how
good you are at shopping.
I always scratch my head over questions like this. Are you not buying the stones and other materials then selling them to your customer? What possible reason would you have to sell something at your cost?
As others have said, you must make a profit if you are going to stay in business.
I’m not sure where the concept that is so prevalent these days comes from, that somehow it’s unfair or unethical or even evil to make a profit, but you aren’t doing anybody any favors if you simply pass along your cost to your customer. How do you plan to stay in business without earning a profit? Won’t it be just as unfair or even worse if you no can longer serve your customers because you can’t afford to pay your own rent? How are you supposed to buy things that will allow others to make a profit and buy things for themselves - like your jewelry?
To add to what Richard said (and every word he wrote is absolutely spot on), an old adage my mentor taught me is that “it isn’t what you sell something for that makes you profitable, it’s what you pay for it.”
50% to 150% markup is the industry standard for markup, depending on what cost level it is. Obviously you can’t mark up a $10,000 sapphire 150%, so common sense should prevail. When in doubt, check around or online for comparable pricing. If your pricing seem too high compared to the average market for similar items and your not marking up very much (say 50 - 100%), it’s likely that you are paying too much as opposed to charging too much.
Check the archives. There has been a lot of really good advice on Orchid over the last decade concerning pricing.
I’m 1000% with all of you that we need to charge for all the things that go
into making that final piece of jewelry, including the parts that can’t be
worn by the customer. The reality for many of us, though, is that 1. We’re
faced with customers trained to want to pay as little as possible for
everything, and 2. Some jewelry makers can’t afford to pass up a sale.
- In following retail articles closely these past few years I’ve noticed
that discount/off-price retailers are winning in all categories (not even
specifically jewelry) which gets customers in the “pay as little as
possible” mindset. No one wants to get screwed on price (whether you’re
buying a house, a car, or jewelry), and the prevalence of sales, discounts,
and “bargain” stores like Walmart and Amazon makes people wary of paying
full price for anything. I was in the car yesterday with a friend going
clothes shopping when she said, “I just refuse to pay full price for
anything,” and I got really sad. That sentiment bleeds into all categories,
This kind of consumer is obviously not anyone’s ideal client, but that
leads me to…
- For lots of small businesses, especially those just starting (my own
included), there isn’t enough capital or financial cushion to be able to
turn away clients. I just launched my own business, scraping together money
to buy my supplies, materials, tools, etc, and every dollar helps. I hope
to get to a place where I can say, “Sorry, this is exactly what it’s worth
and I’ll wait until I have the right buyer for it,” but that’s not
financially feasible for me yet. I just did a large order of earrings as
bridesmaids gifts, and I only charged wholesale because it was better for
me to only get half the money than no money at all. I hate having to do it
and hope to get out of that as soon as I can, but that’s the reality for
many people just starting out.
Again, I agree with everyone that we need to be able to cover all our costs
when selling jewelry, but I want to raise these points to help widen the
discussion and see it from all sides.
We always double our materials replacement cost at the wholesale level. Unless it’s over ten thousand dollars. Then we go down a little.
Remember it’s how much it costs you to replace the metals or stones. Not how much it cost to buy it. We then add our labor.
If you are selling retail then double again all of your labor and materials costs.
It’s all about perceived value. The more you charge the more folks will respect you and your work.
Have fun and make lots of jewelry.
Unless we’re willing to pass up a sale to get what we need, we’ll never get a retail price. I make and sell in Mexico where our tourists think “Everything is cheaper in Mexico.” and we have many “jewelers” who bend wire at our markets and sell it for the price of the wire without even considering the cost of driving to buy the wire. I’m proud to say that in the years I’ve been turning away people who want to pay “Mexican prices” I’ve established the reputation of caring about and giving top quality. It’s really paying off.
I just say “I can’t bargain because I know what I need for this piece.” Most just pay what I tell them I have to get for the piece. Of those who walk, I’ll bet 50% of the come back and pay my price.
If you’re too scared to turn down a sale, you’ll wind up giving your stuff away forever.
I’m no expert, but I’ve survived by selling quality in an open air market for about 10 years now. It can work. I’ve even told people to go to WalMart if that’s what they want. But my stuff doesn’t look like WalMart and amazingly they want my look.
Hang tough. Richard Hart is right. He’s never led me astray.
All the best everybody.
Ah Mexico! Where “C” on a faucet means HOT, and “M” on a restroom means THE LADIES ROOM.
I met a studio owner last week, I asked her how much does she charge for
her time? Would you believe $35.00 an hour? I lost my cup of coffee she
just then made. I told in no uncertain terms, “you must charge a minimum of
$125.00/hr. or close your doors!” She changed her mind that day & thanked
me…with another cup of coffee…:>) And stop selling those $16.00 silver
rings…she now is doing that!!!
*Gerry Lewy *
- (905) 886-5961 *
Awesome! That’s how I look at it. I do the research and all the “shopping”, so to speak.
Thank you all so much! Your advice is so valuable! I’ve adopted the notion that everything I do is marked up and that’s what I’ve been calculating. It’s just the percentages and numbers I wasn’t sure about. Like how much I should be paying myself per hour on the piece (definitely not $35/hour), or how much to mark up materials. I think I’m right there at 150% for my stones
I’d like to answer and comment on your post. To your first point, if you give in and sell at your cost, who actually is “training” your customers that they can buy your stuff below your asking price?
To your second point, I think you are going to have to decide if you are doing this as a hobby or as a profession. If you are doing it simply because you love it, that’s fine. Paying for your materials and buying the occasional cool tool really is all you need to worry about. On the other hand, if you are doing it to put food on your table either now or later, you are going to have to stop training your customers that all they have to do is apply a little pressure and you’ll give in. You are also going to have to train yourself that what you are selling is worth what you are asking for it. In other words, you will have to learn that it’s OK to let people walk sometimes.
To your next point, if discount and off-price retailers are doing all the winning, how do you explain Tiffany and Co? or Mercedes Benz? Or any number of high-end restaurants? I’ll bet your friend that never pays retail for anything can’t get a discount at the gas station. And I’ll bet her argument that she can get bread cheaper on the other side of the supermarket doesn’t get her a discount for the high-end bread in the Deli Department. What one thing do all of these have in common? None of them are afraid to say NO to bargain hunters.
To your next point concerning financial cushion, if you think that selling your wares for your cost of materials is going to improve your cash-flow, I’m afraid your are going to be disappointed. It may improve its flow, but in only one direction - away from you.
Please don’t be afraid to say no. I know that it feels counter-productive and counter-intuitive to turn down money when it’s offered, but I bet you wouldn’t sell your house for any less than its appraised value, or your car, or anything else you own. Why should what you create be any different?
No matter how cheaply you price things, there will always be someone that can sell at a lower price than you can. It may not be the same thing, but the bottom feeders don’t really care, they’ll tell you it is anyway. Bread is bread at the supermarket, right?
You must find a way to validate your prices and of the value of your work. The first person you must convince is yourself if you are to have any chance at all of persuading anybody else. It’s not any easy thing to do, but it is absolutely necessary if you want to be anything like successful. You must develop enough confidence in yourself and what you create to not cheat yourself.
I would suggest that you study some sales training books. Anything by Zig Ziglar is a great start. Contrary to popular belief, salesmanship isn’t about talking people into buying things they really don’t need for more than they should pay, it’s really the opposite. It’s about listening and helping people fill their needs. There’s too much to get into here, just look up Zig Ziglar.
All the best to you Sara.
I love this Dave! I work very hard to make pieces that will last long after the “cheap” mass produced stuff out there. I just sold a silver ring in process for $200 to cover my materials, time and tools needed to get the job done. I’m learning that if people want the quality of handmade, they seem to be more willing to pay the handmade cost. I definitely don’t run a production line where I can make 50 rings in 1 day. I’m working on my speed and skill to make one in a day or 2. But I’m not rushing that. Eventually, I’ll get to the point where I can make a piece in a day, but for now, I’m working on making sure my quality is high and I’m producing a beautiful piece of jewelry that’ll stand the test of time. And for that, I should reward myself with the profit and overhead that my pieces deserve. I’ll tell you, when starting out, this skill is not easy. It’s absolutely rewarding though, I can tell you that much. I’ve fallen in love with the craft and I’m not stopping any time soon!
I would charge 150% for the stone or gold etc. If on consignment the store will be taking 50% of that.
Gerry, I read your response with interest and awe. I can’t imagine paying myself $125 an hour…I’ve been smithing for 3 years and I just started paying myself $30…and even then sometimes I drop my price if the end price is too high. I don’t know if it’s my work that doesn’t appeal to most people or if it’s the “something for nothing” mentality - especially on Instagram, where most of my sales come from - either way it’s not working for me and I’m seriously reconsidering whether or not I’m on the right career path.
Are you working for only $35.00 an hour?
Would YOU pay someone with a skill and talents that amount? Go out into the jewellery world and see how much they would charge you??
My other solution is to open up a school and have “travelling artists” give classes. You could learn from them while they are teaching!
Gerry! On my Teaching iPhone!
LMAO Gerry! You’re awesome. I’m only worth that, really…I haven’t been in the game that long and I work with sterling, not gold or platinum or any other metal worth a lot.
Don’t think small! Tiffany sells silver jewellery and they won’t sell for $35.00 an hour. Do you have expenses? Do you think your rate per hour will cover tools, shipping, telephone & more? Oh yes, new new silver for fabrication?
Let’s hear what the other Ganoksin folks will say!
Gerry! On my Teaching iPhone!
Here’s the fundamental problem I struggle with: My experience, and hence my skill and speed, is limited compared to so many of you here. What would take you an hour to produce might take me five hours or more. Putting aside the fact that my creation probably won’t compare to yours in terms of quality (Tiffany would hire you, but they wouldn’t hire me), applying a $125/hour rate would make my work very pricey. Even if you’re charging $500/hour, my 5-hour piece still would be priced $125 more than yours.
So there’s got to be something more to the formula, a basic chart of how much time a ring should take to make, a bracelet, a pair of cuff links, etc. Something.
when I was in school…a while ago, I was taught to price at 3X the cost of
materials…weight of finished piece excluding gem weight…but as a basic
rule…it seems to cheap these days but it gives you somewhere to start