Doubling labor for wholesale price

Jewelry Discussion
21

To all:

Here is another consideration about pricing.

I have two points.

First is, does anyone else sell something similar? Most likely yes.
You know have a price comparison. This at one time was called “Market
Research”.

Your assessment must now include a competitors price. All the hourly
wage formulas can go right out the door.

Doubling your time formulas also.

The question may come down to how fast can I make this piece? Sorry,
but even in the Craft/Artist market this pricing reality is here.

If you are already famous for your beautiful style and image you
charge the most you can.

The point is that there may already be prices set up for you. You
are not alone.

Second, I many years ago matching a competitors price which figured
out to formula of doubling my material cost.

This was a 14 karat wedding band line.

For the most part I was making about $100.00 wholesale per ring and
selling about six to ten rings a week.

Not too bad for a about 25% of my weekly work load. This was 2006. I
was happy with the doubling of my material cost and gave my retail
distributor the ability to add their percentage.

With the gold spiking at almost $1900.00 per ounce, my doubling
formula would have been great to maintain, but people did an
interesting thing.

They stopped buying gold jewelry and instead went to the store and
sold their gold jewelry. In fact that’s how many stores survived that
period of time. Many of these same places are now out of business.
Being a gold guy is not the same a s being a retail jeweler I guess.

What I switch to was a new formula that really did not work. I just
tacked $100.00 on to my material cost whatever that was per ring.
This was in essence lowering the price to deal with the changing
market prices.

With the market going up and down like it will, we can’t have some
of the same strategy. With the prices lower and a bit more stable we
think we can go back to the old days and we cannot.

As for me my prices are competitive on the custom pieces. I’m
thankful the stores have to charge so much for the overhead they
have. I can always sell better quality for 30% less and make a
profit.

My sterling silver line is priced to match or beat any similar
piece. People will only spend so much.

I do always show more expensive pieces and at the end of the season
the pieces are all gone, but I cannot plan on it.

Bottom line is there is no one formula to go by. You have to make
whatever you can. Sometimes it’s more sometimes it’s less.

Just my experience and opinion.
Regards,
Todd Hawkinson

22

Hi Emma,

I am still trying to find my market. I do not want to (and don't)
make low priced pieces of jewellery to satisfy the tourists coming
into town off the cruise ships (Portland, ME). However finding the
market I am aiming my pieces towards is clearly the more difficult
route. I will persevere! They have to be out there somewhere :-)

Don’t be too quick to pooh-pooh the cruise ship crowd. Remember that
many if not most of them paid $3000 or more per person for four days
of pampering and shopping. They’ve got the correct change. Cruise
ship passengers have gotten a reputation of buying only cheap goods,
but that’s not an entirely accurate picture. It’s mainly because
that’s what most people try to sell them. They can, and sometimes
will, drop several thousand dollars for something they think is
pretty on no more than a whim. Your neighbors (ME and NH locals) for
the most part will very, very seldom do that. Been there, done that,
so I speak from experience.

One thing to consider when trying to find your target market is the
financial standing of your year-round neighbors - the locals, and
their priorities. I got my start in northern New Hampshire back in
the 70’s. That was when there were gas lines, the paper mills were
all closing and the economy was dying, but the truth remains the same
to this day - the vast majority of folks living in northern New
England put personal adornment items, especially things like high-end
jewelry at a pretty low priority. Things like snowmobiles, four-wheel
drive vehicles, skis and related items like season passes and all
sorts of other outdoor pastimes beat the pants off of jewelry when it
comes to competing for disposable income for nearly everyone that
lives near you. That’s part of the reason they live there, the
outdoor life is so rich. It’s tough to make a living there to begin
with, and then be able to afford the all the things they love to do
and still have enough money left over to allow substantial
investments in personal adornment just isn’t part of the equation for
most people living on the Maine and New Hampshire coast or inland. If
you can’t eat it, shoot it, drive it, hike with it, make camp with
it, fish with it or ski on it, it’s pretty much worthless in most
locals’ eyes.

You almost have no choice but to court the tourist trade if you are
trying to make a living selling jewelry in Downeast coastal Maine,
at least in part and indirectly (read that wholesale). If you love
the area enough to stay there regardless of the economic trials,
consider starting to market to the tourists. There’s a reason
everyone else around you does.

Dave Phelps

23

Todd. thanks for your brilliant input!

One issue I keep running into when comparing prices from competitors
is that there seem to be many on that famous online selling outlet
(first letter E) that offer “similar” pieces at ridiculously low
prices. I don’t understand how they get to these prices. I play
around with the formulas to try but for the life of me I cannot see
how they reach those prices. Do they get the materials for free or
what?

If I were to price my pieces as low as this, I would be making a
serious loss. I hate to think what they would do should someone
approach them about WS prices!

Some customers are looking for bargains so they are bound to home in
on these less expensive items and perhaps question why others price
a lot higher. Part of me thinks, well these people are not the type
of customer I want, they probably don’t even consider that items are
handmade etc etc.

But those selling at these low prices are surely undermining the
work of many other artists and in end effect are underselling those
artists!

So how is it possible to offer comparable pricing if they are simply
too low? I sort of know the answer but it baffles me nonetheless. I
don’t want to feel that I have to adjust or justify my prices. My
profit margins are minimal as it is.

Excuse the rant.:slight_smile:
Emma

24

If no one has mentioned it yet tourists are not buying jewelry, or
paintings, our even T Shirts. They are buying memories and reminders
of memories and there has to be a price for that as well.

Don Meixner

25

Emma - I sell there, and also on eBay. I actually had someone
message me on eBay complaining that my prices were outrageously
high, and I was “hurting” other chain maille makers. Hah! Reported
them for improper communication to eBay and blocked them.

Point being, your prices are your prices - they are what works for
YOU. Honestly, on both of the “e’s”, I firmly believe there is a
significant amount of, at the best, misleading labeling - flat out
fraud at the worst. Pieces are priced below actual wholesale cost of
raw materials IF they were actually what they are purported to be.

The “E” you refer to has recently expanded their meaning of
“handmade”, so that it now, in fact, includes manufactured goods
:(So if it is made in Asia it is definitely going to be cheaper than
what you are making!

How to deal with this? One option is to make things that are
sufficiently unique and hand-process oriented that nothing very
similar is going to be coming out of factories anywhere. Another is
to make things at a sufficiently high skill level that most folks on
these platforms simply can’t make it. Yet another is to make things
that are quite clearly hand made, and really focus on HOW you make
in your descriptions and photos, so it is quite clear that you,
yourself, made the piece.

I do sort of a mix of these. I discuss my process in generalities, I
offer in the listing to custom make something if this piece spurs
their imagination but isn’t quite what they want, and a lot of what
I make would be incredibly time consuming and/or difficult to mass
produce.

Then I don’t worry about it. Honestly, I almost never look at what
anyone else is charging - for me, that is only relevant at the stage
where I am determining if a certain market, show or venue is “right”
for me and my work. Plus you have, especially on the big E, quite a
few hobbyists, who have no clue how to charge to cover things like
overhead and labor! They are having fun, and selling it for enough
to buy supplies to make another - and for them, that is sufficient.
Which means they can price at a significantly lower level than
someone actually doing this for a living. Thankfully it also
generally means their skill set is pretty limited, and usually
fairly basic. So create things beyond what they can do. and quit
worrying about them :wink:

Good luck!

Beth Wicker

26

Dear Emma

I would guess that what you see is from China. Labor there is $35.00

  • $50.00 per WEEK.

No one can compete with those prices.

The Chinese government is also paying all the postage of many
products leaving their country. Try to compete with those prices and
free shipping anyone? I have stopped making some of the pieces that
are similar to the imports.

Not necessarily because of the Chinese, but because someone here in
the states sill buys the stuff and claim to make it.

A good example are those stone ducks at some shows. Cute, but not
made by the person showing them.

I would encourage you to develop a style unique to you and see if
you can have more success.

You cannot compete with China.
Best regards,
Todd Hawkinson