Hi Roberta,
I am certainly no expert here, and I struggle with pricing issues as
well. I often think that is one of the most difficult parts of
making jewelry. The pricing formulas I read here seem quite low to
me, more for wholesale pricing than retail. First, a note on
formulas: I use them as a guideline, to help me compare potential
prices of pieces, to compare materials costs to time spent,and so
on. They make me feel better, and give me a concrete basis for the
prices I use, but they are a guide, but not a rule. Feel free to use
them and then to ignore them. That said, my formula is pretty
simple:
Time (in $/hr) + materials cost x 1.5 - 2 (your choice in the range
between 1.5 and 2) = wholesale price. Wholesale x 2 = Retail Price
You need to decide what you would pay someone per hour to make the
piece, and set your hourly rate. Then, keep approximate time figures
for making a piece of a particular length. You also need to know how
much wire and other materials you are using in a piece. The
multiplier of 1.5 - 2 is a number I came up with for myself only,
based on my own relatively low overhead, combined with a profit
margin. This formula yields a basic charge for a wholesale price,
covering your materials costs, labor costs (whether you pay yourself
or someone else to make the piece), overhead (helps defray all of
the “hidden” costs of a business, such as tools, consumable
materials, studio, advertising, shipping, office costs…) and a
profit (which is generally returned to the business to help it grow
- maybe you will buy a new pair of pliers, maybe it will contribute
to a new drawplate for your chains…).You may want to use 1.5, or
even, as suggested earlier, 1.3 to start with, if you don’t have
much in the way of overhead costs. Your overhead will change as you
grow. DOUBLE this for retail sale, and there you have it.
Ex - If I were to use $10 in materials, and spend 1/2 hr on a quick
piece, my lowball price might be $10 mater. + $7.50 (I usually
figure my time at $15/hr) =$17.50 * 1.5 = 26.25 for wholesale,
around $52.50 for retail. More reasonable might be $17.50 * 2 =$35
WS, $70 retail. At the same hourly rate, the same $10 in materials
used in a more complex piece, that takes 2 hours to execute, might
retail between $120 and $160. You can see the range this offers, and
of course, based on your expertise, you may pay yourself more or
less per hour as well. If I am not comfortable with the price range,
I may sell the piece for a bit less, but I will also think about
what I could do to reduce either the materials or time cost if I
were to make more of these. I also tend to play around while working
on one-of-a-kind pieces, and the time I charge for is usually
estimated based on what I think it would take me if I were to repeat
the design, not a first-time execution.
Don’t undercharge. Selling retail to a friend or co-worker is nice,
and seems to have few background costs. But if you were to sell
retail at a craft show, for instance, build a nice booth, buy
display cases/risers/etc, get packaging equipment, pay a merchant
credit card service for bare bones services, rent a space in a
decent show (300-$800/weekend?), and spend the entire weekend
loading, driving, building, setting up, selling, packing, tearing
down, accounting, etc, print basic business cards, packing slips,
receipts… you can see where the extra costs come from.
Lots to think about. Sorry to go so long. Play around with some
numbers, and don’t panic. Good luck with your first sale, and have
fun!
Lisa W.