# Pricing a piece

#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

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

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

Regards Charles A.

#21

Hi

I use a very basic approach. I sell from \$20 in sterling up to
\$1000+ (for custom orders in 18 kt).

A \$20 ring costs five dollars or less in silver and takes ten
minutes to make. \$60 an hour profit.

A \$50 ring costs ten dollars and takes one hour. \$40 dollars an hour
profit.

A \$600 dollar wedder costs \$400 and takes a ten minute phone call to
supplier. \$1000 dollars an hour profit.

A \$1000 ring costs \$600 and takes 2 hours to make. \$200 an hour
profit.

The award rate for bench jewellers is about \$20 an hour.

We all price to the market we sell to. If I sold in a city, instead
of a poor rural community my prices would be double or treble what
they are now. But the cost of living would be 2 to 3 times where I
live.

Richard

#22

When posters talk about 3 or 5 times the cost of materials, are they
talking about grams/oz. of pure silver or gold in the piece? It
makes a big difference if you are buying pure metals and doing your
own alloying, alloying with a premixed alloy purchased in shot form,
"materials"?

Janet in Jerusalem

#23

Hi Guys,

question about pricing a piece comes up an awful lot on this list.

There are no hard an fast rules.

I chose the 5x cost of materials, because it was suggested to me by
some well respected teachers, it’s simple, and labour cost is covered
by that rate (you don’t need to incorporate them into your price).

Another way you could work out your pricing policy is to work
backwards from what you need/want to be paid over the course of a
year. Rent, superannuation, cost of materials, insurance, a whole
swag of business expenses etc. You can end up with an algorithm that
is tailored to your lifestyle and circumstances. The down side is you

There was a suggestion a while back (on another list), that there
should be a universal scale, and for obvious economical reasons the
suggestion was quickly retracted.

Regards Charles A.

#24

Hi Janet,

In my case it’s the cost of raw materials, whether I purchase alloys
or do the alloying myself.

For example if I, if I want some red gold, I will have to make it,
getting a metal merchant to do a special alloy run is expensive. If
I want carat yellow gold, I’ll just buy it.

So basically it’s 5x whatever raw material I use. It works out for
me.

Regards Charles A.

#25

I am surprised at the amounts given in answers - I have been doubling
wholesale cost. Retail, whether sold at an art fair, at consignment
gallery or through my website, is double the wholesale cost. I’m not
making it. Reviewing others’ pricing formulas is illuminating, to say
the least. I can raise my prices, but think I’ll also have to make
better stuff, because I have a hard enough time selling what I make
at my (too low?) prices. So I thank you for the formulas already
given, but here is my question - how does one price items when one
starts working in gold? My skill set is the same, do people who work
in gold really double (or triple) the costs? Does labor remain the
same rate? Any insights are very welcome.

Blessings,

Sam Kaffine
Sterling Bliss, llc

#26
``````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.
``````

Don’t you mean “on approval”?

Al Balmer

#27
``````If you are buying pure metals and doing your own alloying,
alloying with apremixed alloy purchased on shot form, or simply
``````

Janet, If you consider your time, effort, equipment, etc. involved
in doing your own alloying, rolling, etc., the cost of materials
the price it would cost me if I had to replace it commercially.

Jerry in Kodiak

#28

I find this thread interesting and it sure will help me look at
pricing my work. However, I notice that no one has discussed price
research into comparables, which is one way an appraiser would price
your work (the other being some form of what you’ve been discussing,
cost of materials plus so much labor and markup). No matter what
formula you use for computing your labor and costs, if you find true
comparables going for much less, it is going to impact what you can
sell. Sometimes people will just respond to your salesmanship, to
how you treat them (if better than they get treated elsewhere they
can buy the comparables), to your guarantee, etc. But they are not
going to pay a whole lot more for your item if something similar is
available for less elsewhere.

Fortunately, if jewelry is made in a sweatshop in China or Bali or
wherever, and labor cost there is low, someone down the chain is
usually greedy and boosts the price to make an exorbitant profit,
thus charging closer to your price. However, I think you neglect the
price point and the comparables at your peril. If you are making
really impressive one of a kind jewelry and/or costly items which few
make, you may be in a different league, because there are few true
comparables and you may have clients who are your patrons and buy
just from you.

#29
``````Don't you mean "on approval"?
``````

Nope, but it basically means the same thing CIA

#30

Hi very good point Roy

``````If you are making really impressive one of a kind jewelry and/or
costly items which few make, you may be in a different league,
because there are few true comparables and you may have clients who
``````

I make simple sterling rings with bezel set stones, cabs and faceted
hollow backed. The comparables have ring shanks 2 mm or less wide and
1 mm thick half round. They will bend out of shape or if cast snap
easily.

My ring shanks are 4 mm wide and 2 mm thick, I like to use an oval
comfort fit profile, even more unique.

The width of my ring shanks shows the polished quality of sterling
very well and is extremely hard to deform.

Puts me ahead of the comparables. The customers can see very quickly
that my rings are far better than the comparable rings from Asia.

Had a lady want me to size up a ring she bought that was supposed to
have been cast in Australia but was hand made in India. Spend decades
looking at jewellery and you can very quickly tell where it is from.
Shank a bit over half a mm. I said no sorry. " But why you are a
Silversmith?" Yes I am and experience has taught me that a lot of
jewellery from India is not\ sterling and this shank is too thin to
be worth doing because it will only break in the near future. If you
had bought a ring from me it would have a lifetime guarantee and be
of the highest quality and guaranteed Sterling. Also half the price
for that stone and my garnet would have been better quality. And it
would have fitted.

If the ring had been of good quality I would have sized it up for
the lady. For a good price.

She was very upset and took the ring back, told the guy it could not
be resized like he said it could and got a refund.

I made her a beautiful rhodolite cab, not cheap and nasty, badly cut,
almandine garnet like the Indian ring for the same price. She is now
a regular customer.

Mister “cast in Australia” really hates me now and I am just getting
started on him. By the time I finish with this con artist he will be
broke or in gaol or both. My friends who are silversmiths and I are
making a very big effort to support quality regardless of where it
is made and promote Australian made foremost. I have a friend who has
a workshop in Nepal, a family of old time jewellers, quality is great
designs are good too, I refer people to him for jewellery I do not
make or stones I do not use. He does the same for me. Quality
traders get on well, we play design wars, best design sells and we
never copy each other. And we sure give the crp artists sht.

Quality is quality and crap is crp and never the twain shall meet.

Richard

#31

Hello again Charles,

Don’t you mean “on approval”?

``````Nope, but it basically means the same thing ;-)
``````

The use of words being one of my own most enjoyable and important
areas of craftsmanship, I like to see it done well. Consequently i
am sometimes moved to quibble over proper usage, much as I hate to
appear like a nit-picker.

II think we understanding the process of ordering goods “on
approval”, the reasons for it etc, but I (and apparently someone
else as well) wrote to quibble over your assertion that the term
"apro" is a shortened form of “apropos”. “Apropos” is not at all the
"same thing" as the word “approval.” They are just two different
words with quite different meanings. If parties to a transaction
understand the process then you might say they can use any danged
word they want, no matter what it means in the dictionary or in
common usage, as long as they personally agree on the terms of the
transaction. That’d be like the queen in Alice in Wonderland who
said that any word she used meant what she intended it to mean. But
really, the two words are so different that it makes no sense to say
"apro" mean s"apropos". This is just my personal bugaboo, my tiny
attempt to hold onto a little linguistic integrity - not any quarrel