Hello, hello. I had someone set stones for me and am wondering if there is a standard markup on contract labor. Anyone have any advice? I know I should markup some, but my inclination is 10% , but I’ve been told otherwise. Thank you!
I usually just factor it in as a cost, like with materials. Usually I use x1,8 (~45% of the sales price). You can’t live on 10%, it’s not sustainable business. If you pay 100 bucks to the setter and only charge your customer 110, the 10 can’t possibly cover all the work you have to do (customer service, getting the piece to and from the setter, explaining to the setter what you want done, billing your customer, paying the setter, packaging, accounting). And you probably also have other costs like rent, electricity, website, phone, payment solutions, jewelry displays, marketing etc.
I repair and I set as a contractor these days.
I expect my customers to at the very least, double my price, because the price that I charge is not their only cost of doing business.
I ran a retail store, so I try very hard to support my retailer base now.
I use the Geller Blue Book to get a general, fair price, adjusting for each job, a bit. I charge roughly 1/3 of that Blue Book price, expecting my customer to do at least “keystone” this cost, while still allowing them room to show their customers a “discount” from the “list price”.
I continually find myself trying to teach several of my customers how to actually make some money from the work, rather than just "doing favors ", and losing $.
Repairs, like Custom work, can and should produce a great deal more profit than retailing ready made products that are easily “shopped around”. Few jewelers seem to understand this concept, and see repairs as a loss leader.
With that attitude, repairs can very quickly become a true Loss!
Most retailers I ever worked with did a 3 x mark up on repairs. That was because on occasion they would use free repairs and sizings to gain customer satisfaction. The extra mark up covered the freebies. For custom work it was always 2-2.5 x markup at retail.
At the wholesale level my husband Timothy and I do a 2 x markup on all materials and we charge a minimum of $75.00 per hour. $100.00 if the piece requires a lot of engineering or is in platinum.
When the retailers complain we remind them that when they keystone or double the higher costs they make more money. 2 x $100.00 is a lot more than 2 X $40.00
One of my favorite quotes from David Geller is “Repairs are not Price sensitive but Trust sensitive.” It’s the same with custom. The more you charge the more customers think “Wow! That much!? Oh. You must be really good.” With time if your work is good, both you and the retailer will develop a reputation for high quality work and goods.
Never ever succumb to pressure for a discount. That person will never be a faithful client. They will always end up going to the next cheapest craftsman or retailer.