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Pricing a piece


#1

Hello,

I have made several sterling pendants that I would like to price out
for sale in the market.

Here is the average breakdown for each pendant:

Wax for carving: $0.50 or less
Usage of tools (files, flexshaft, etc): cost ??
My labor: 1.5 hours
Casting (includes cost of silver, casting fee and shipping) : $18.00

Given the above info, how much would you ask for each piece?

Thanks for any suggestions!

-Chris


#2

You know the cost of the silver, $18. If selling retail multiply x 3
to get material selling price. Then figure how long it took you to
make each piece, average it. If you could make 20 pieces in a day,
manufacture, clean up and polish, then figure labor selling price
from $65 to $85 per hour. 8 hours x $85 = $680 daily retail labor
requirement. Divided by “20” = $34 in manufacturing labor.

$18 metal cost x 3 =$54 Labor selling price = $34

Add together each item retails for $88

this is minimum, test the waters. Round up to $89? How well does
selling at $99 affect sales? if not much use that price point.

David S. Geller


#3

I am just starting out so take my advice with a grain of salt (or a
pound)

This is how I would price it out.

1.5 hrs = $54

Cost of silver = weight of completed piece multiplied by three then
multiplied by current market price (I don’t keep a lot of stock so
this is quite accurate for me) 20.00/oz final material price = $30

$84 x.15 = $12.6,
$12.6 + $84 = $96.6

boxes .50 each,
cloth bags: .50 each = $1.00

Casting fee: $18

Shipping (I do complementary shipping) $5

Plus Etsy and Paypal fees (if applicable) = $123.6

Keep in mind that this is wholesale price for me, if I was selling
through a gallery for instance and their cut was 30% I would probably
double my prices throughout the board (Etsy, show, and website prices
would match gallery’s)


#4

Chris- 1.5 hrs of labor seems a bit low to make a pendant.

Are your labor costs for wax carving only? Did you include your
finishing and stone setting costs?

Here’s how I’d price the job…

Labor 1.5 hrs at $75.00 per hour = $112.5
Casting costs $18.00 keystoned =$36.00
Total price wholesale $148.50
Retail for $297.00

Tools purchased should be listed with purchase costs and listed for
depreciation on your taxes.

Have fun and make lots of jewelry.

Jo Haemer
timothywgreen.com


#5

If you use the 5 times rule, the prices isn’t too shabby. CIA


#6
You know the cost of the silver, $18. If selling retail multiply x
3 to get material selling price. 

The price for silver from casters Is around $1.80 a gram. I do not
know what the piece weighs, $18 was for silver, shipping, casting
charge and wax. Under 1 gram, I charge $1.80 a gram and $2 to shoot
and sprue. Everything else is $1.80 a gram x weight.

I retail purchased sterling goods at $6-9 a gram. Purchased chains,
sometimes 1.5 grams, I charge a minimum of $15 for the chain. Cost
of goods and time to make the sale, try on one chain, then another,
which length, yada, yada…

Things I cast from a mold, my design, about 6x silver cost for tumble
finished pieces. 3grams x $1.80 = $5.40 x 6 times mark up = $32.40.
I would price it at $28.88.

My wife said 88 was a fung shui number, I could not care less, but in
her memory, I still do that.

I have pieces, part cast, part fabricated and the materials,
sterling and a bit of 18kt gold, a 6mm garnet or Ame or citrine,
material cost is $40-50, I retail for $398-498. I wholesale for 60%
of retail, what get for consignment. The sum of the whole is greater
than the sum of the parts, you just have to make it look like it is
worth considerably more that the parts.

Richard Hard
Denver


#7

Interesting to see how everyone arrives at their price. Thanks for
your input.

Not sure if I understand the 5x rule. Is that 5x $18 ?

$89.00 retail to $297.00 retail. that’s a big difference. Is one
retail pricing scheme more appropriate for one type of market vs.
another? Say like selling on Etsy vs. a higher end bricks and mortar
gallery?


#8

5x. Yep that’s what I was told to price at, although I think it’s a
little steep, but this came from very senior jewellers.

Metal cost times 5, this covers labour, and resources. Stones such
as diamonds are on apro, so the customer pays for them directly.

Originally I was pricing by what I thought was reasonable and fair,
but I was apparently short changing myself.

Regards Charles A.


#9

I read this thread with much interest. Over the years many people,
myself included, have posed this question to the forum. The one
thing that is always lacking is that few people really talk about how
low the 3x material & your labor rate pricing model really stinks for
wholesaling. To me that model really only works if you own your own
store and produce all your own jewelry not for people who are in
galleries, other jewelry stores, etc. This forum often talks about
not selling yourself and your work short so I would like to pose this
question. how many jewelers on this forum are successfully using the
3x materials + labor rate for retail cost divided by 2 to equal the
wholesale cost model. It seems to me like a model set up for failure.
unless your work is being mass manufactured in China or whatnot.
Richard’s model of multiplying by 6 then selling wholesaling at 60%
of that number seems much more livable.

I welcome discussion on this!

R/
Kennedi


#10

Pricing pieces of wearable art!

One thing I will do, is to allow for ‘cost over-runs’. These will
happen 200% of the time.

My diamonds are priced in US funds, then I gotta make a calculation
into Canadian dollars. I put on 2% extra as the posted currency will
change during the course of the week or even a day. If I miss any
minor cost, I allow for this at 18% costing in ‘cost over-run’.

My time at the bench, or dreaming up another design & figuring out
how to assemble it at 4:00 a. m. is another simple process,
‘Consulting Fee’…I use at least 36% for this label. Some designs
might take up to a year to get into a real-time product. I allow a
high-commission for my salesperson @18%. Why so high? I use this as
an ‘incentive’ to sell my ultra high-end 18kt goods. But my many
salespeople (of any gender) should have some casino contacts prior,
no cold-knocking on any door.

The last phase of calculating is “10%,wiggle-room”. “Wiggle Room” is
another name for charging high & allowing to give that
discriminating buyer a benefit of asking for a discount. No one gets
hurt in this phase, not me, or my salesperson.

So now you all have my equations on how I price my ultra high
merchandise.

It isn’t rocket-science, but ‘we’ have to take into consideration
invisible unforeseen costs that will occur.

An example of ‘cost overruns’ is my Cad fellow might hit me with a
high cad-fee. Or my caster will charge me extra for his time in
preparations of special wax spruing or one flask casting fee. He also
charges me 13% tax.

If I don’t allow for these hidden fees, I won’t be making a decent
drawing of funds!!! Some of my patterns need specialized setting
tools. woops! How about the costs of making a $36.00 colour brochure?
I’m making 25 of them. The ‘over-run’ list just keep on adding up.

You MUST ALLOW at least 36% to keep your mind at rest in case of an
additional last-minute fee. Don’t be timid in using my method. It
just might help when you are subjected to those unforeseen costs.
They will 100% happen… Gerry Lewy.


#11

I’ve generally used the 3x materials method when pricing sterling
pieces to establish the wholesale price. If I am retailing it myself
then I double the wholesale price.

For pieces with carved gemstones I triple the materials cost plus I
add an hourly rate to establish the retail cost, then I half that
for wholesale. Notsure if this is really logical, but it works for
me.

For gemstone carvings there is another factor. I use the above
formula to generate a price, but then I consider how the item fits
in with my general body of work. Some pieces just fly together and
the whole project is like magic, and some projects get bogged down.
Once I have the formula number comparing it to the rest of my work
helps keep my from feeling like I’m under- or over- charging. I
suppose the same can be said for the 3x materials formula. By
removing actual labor time you flatten the bell curve.

Pricing my etched copper pieces happened from the other direction. I
originally created only commissioned work, both retail and
wholesale. When I started selling from a booth at shows the cheapest
item on my table was $300, which did not work with my audience
(Celtic Festivals, Renaissance Faires, and such). I quickly added a
line of sterling with gemstones which priced at $20 -$100 using the
above formula. After a while I began to realize that I needed
something in the $10 - $20 price point. I started creating the
etched copper pins and selling them for $12 for the 1" diameter pins
and $15 for the 1.25" pins. Actual time and materials cost played no
part in determining the price, I just made them up to fill the price
point. Over the years I have ramped up production (etching 50-60 at
a time) and now make a living wage from wholesale orders. In the
beginning I wouldn’t sell them wholesale because I couldn’t afford
to (etching 3-6 at a time).

Epaul
gemartist.com


#12
I would like to pose this question. how many jewelers on this
forum are successfully using the 3x materials + labor rate for
retail cost divided by 2 to equal the wholesale cost model. It
seems to me like a model set up for failure. 

Well, we do 2.5x materials plus labour = minimum wholesale. We
frequently go higher, but never below that price. Retail is usually
times-2.5.

We have a dedicated set of pieces that sell well and are easily
fabricated with low cost materials for wholesale. Problems pop up
when our wholesale clients want pieces from the direct-sale
collection. But these do not support a decent profit for both of us.

60% of “times-6” equals 3.6 - which is fine as long as the retailer
satisfies himself with the remaining 40%. Not likely.

Part of the problem with discussing formulas is probably the
diversity of participants here on the list. Part-time jewelers, often
funded by another income, don’t need profit. Their profit often is
the satisfaction that someone actually bought an item.

This group typically buys materials or services at the retail price
of their supplier. Double these again for wholesale and double again
for retail just does not work. Formulas for the industry break on
hobbyists.


#13

I personally use 5 x the cost of materials for retail prices. not
3x. I have done well over the years using this formula.


#14

Charles, what is an apro?

Kennedi, you hit the nail on the head.

I wanted to express that for people like me trying to start out at
this moment in time perhaps a new pricing model is necessary.

So, with virtually very little overhead, I can put my jewelry up for
sale on a sight like Etsy. Maybe this is an excellent opportunity for
someone just starting out? Grab some sales, generate some cash for
the business while I still work the day job to keep the lights on.
One problem that I run into is say I use the 3xcost plus labour
model. This may work on Etsy for pricing but not if someone were to
approach me with a wholesale opportunity. In my original question,
one pendant costs $18 to produce plus my labour($35 hr). So, (3x$18)

  • (1.5hr x 35) = $106 retail. Say I wholesale at 50% which is $53.
    Given material cost, I would make $35 selling wholesale. This
    wouldn’t cover labour fees. Off the wholesale price, I would make $88
    (more fung shui)… More liveable. If I make the $106 my wholesale
    cost and $212 my retail, this would seem a better model for selling
    wholesale but doesn’t entirely mesh with prices on Etsy where it is
    the Wild West of pricing. On Etsy, people sell great stuff for much
    cheaper than they should sell it for mixed in with people trying to
    sell at a more liveable price mixed in with a lot of random junk.
    Perhaps Etsy is not the way to go but I’m strapped to my day job at
    the moment. Etsy is a way for me to get my jewelry out there to some
    degree while I have time in off work hours.

My point is, pricing for Etsy and pricing for wholesale to galleries
don’t seem to entirely mesh. It would be nice to sell online and to
bricks and mortar but the pricing needs to line up. If I retail at
$106, this is a price that works better on etsy but not for
wholesale. If I retail at $212 or more this is a price great for
wholesale but not for Etsy. This disjointed pricing doesn’t work well
if you want to start at etsy and transition to physical retail.

Also, another difference between the two, Etsy and a physical
gallery, is Etsy lets anyone sell whereas a gallery can be highly
selective. They are both at extreme ends.

Hmmm. We need an online market place like Etsy but one that forces
people to price their jewelery at more liveable prices and not at
giveaway prices.


#15

I concur - for wholesale here in England the mark up is more likely
to be between 1.5 and 2!

Annika


#16

Kennedi, I find pricing to be one of themost difficult aspects of
this business! I have used the formula 3 times materials, plus labor
for WHOLESALE. Double it for retail. Even then I usually add a
little bit to the wholesale price (I have been told 20% but rarely
add that much). I’m just now getting back into jewelry after a 3
year hiatus (moving/building a house) and I have lost some of the
confidence in my ability to price appropriately. The first gallery
visit will tell. Always guessing, Pegi


#17

Hello Kennedi,

Richard’s model (multiply costs x 6) is a good starting point. In my
case, when I’m using silver purchased then the price was US$ 5/ oz, I
also factor in current replacement cost for the metal. The changing
metal price has been a bugaboo for which to account.

Now I just weigh the metal and calculate cost based on current
prices.

judy in Kansas


#18

Ok so I have mathematical IQ that is roughly the equivalent of that
of an eye of a potato.

I really don’t understand why folks figure out the retail price and
then work backwards from there.

I just figure “This is how much I want for my work. What you sell it
for is your business.” Have fun and make lots of jewelry.

Jo Haemer
timothywgreen.com


#19
Charles, what is an apro? 

A shortened form of apropos, in this case, is where the stone is
given to the jeweller for the client to inspect. No money has changed
hands.

Basically the client pays for the stone, the jeweller does not.

Kindest regards Charles A.

P. S. Some opal dealers will do this also.


#20

That’s quite correct, a sale is an agreement between the seller and
the buyer.

You can sell a stick of gum for $1 million dollars if the client
agrees to the price.

Regards Charles A.