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I still question my pricing formulas


#1

I have been a jeweler for 37 years and sometimes I still question my
pricing formulas. With the current prices of gold and silver, what
is a good formula in determining the retail cost of handmade silver
and gold jewelry with or without

Thanks for your input!
David E


#2

Hi David,

I think it’s good to question your pricing formula.

What I have noticed with the larger companies over here, that deal
in precious metal products, is that they base their daily price on
the current price of the metal.

For example: an Albert clasp may be $5.50 today, but may be $7.20
tomorrow.

The price of the labour hasn’t changed, the price of marketing
hasn’t changed, the only thing that has changed is the price of the
metal.

Kindest regards Charles A.


#3

David- We’re mostly wholesale and do custom. We keystone or double
our metal, material, contract labor, and supply costs and add labour
at $75-100 per hour. What the retailers add on is up to them. Our
bottom line is what will make us money not how much the customer
pays at the end.

Also what we charge our customers is highly dependent on their
attitude. We add in extra for the “Jesus” factor. When we say “Oh
Jesus! Here comes Mr. So and So.” we add on 15% just for them being a
PITA.

Oh, and don’t believe one of the three great lies in our biz. “Can
you cut me a deal on this mounting. I’m not making any money on this
sale.” Trust me, they are making plenty.

Have fun and make lots of jewelry.
Jo Haemer
timothywgreen.com


#4

Having a formula puts you ahead of the game, too many people look at
what others are charging to set their prices and then hope to make
money. I think the most important thing is to really understand your
actual costs. In addition to material and labor costs, you need to
figure out your overhead costs per hour and include that in your
pricing formula. It’s good to take a month or two and list the time,
materials and labor cost of each task you do, in order to get an
accurate idea of your actual costs of each task. You can then use
that to create a price list of routine tasks.

The labor portion of your formula needs to be more than you expect
to make per year. That’s because you don’t work every minute of the
day, you’re only generating income when you’re at the bench. So if
you bill $100 per hour (which should translate to 200K per year) you
really will net much less, maybe less than half of that.

We also have to remember that our businesses need to make money not
just us. We need capital to operate.

Mark