So, I am a beginner and have recently spent countless hours trying
to figure out how to price my pieces in a way that I feel comfortable
with. I have a hard time with multiplying the cost of materials by
some random factor, since everyone seems to use anything between 2-5
with no real reason for which one. This just feels too arbitrary for
me. I kind of like the idea of finding your average over a year for
overhead and such, but since Iâm just starting out I canât really do
that. What I have finally adopted that makes sense to me is:
materials + 10%
I adjust this percentage per piece, depending on how much wasted
material I had, or any materials I didnât actually calculate, like
jump rings or whatever. The 10% base usually covers wasted materials
and overhead (I donât have a whole lot of overhead just yet, so it
would just be saw blades and what not).
labor + X
I put in my hourly rate, and then if any part of the piece required
me to go to a studio then I add some extra overhead here. If I can
calculate how much time I had to pay for at the studio for a
particular piece then I will add that, but usually when I go in to
the studio I am working on multiple pieces at a time, so I will just
add a percentage according to what portion of the piece required
studio time.
Once I have these base costs then I add a percentage for profit to
the total in order to get my wholesale cost. Right now this number is
close to 10% because I donât feel like my craftsmanship warrants
anything more yet.
And, because I currently only use very inexpensive materials. Mostly
copper and brass with highlights of silver. However, when I feel more
comfortable with my craftsmanship and I start consistently using more
expensive materials, this percentage might go up.
After calculating my wholesale cost, I simply double that price to
get my retail cost. The prices that I get using this formula seem to
match pretty closely with what I had in mind for how much I felt like
the piece is worth.
This formula gives me the assurance that if I sell my piece at a
gallery, I will still recover the money I spent on materials and
overhead, I can pay myself a wage to live off of, and then I get some
money that I can use to invest in new tools or classes or whatever it
may be that will help my trade.
So, this pricing scheme makes total sense to me, however, I recently
had a friend who has been doing retail for a long time tell me that
my pricing formula was wrong and that it doesnât work for the real
world. Iâm not sure if she thinks my prices are too high, or if I had
just pushed some buttons because I was using a formula that she
wasnât familiar with despite how much longer than me she has been
doing retail. Either way, aside from irritating me to high heaven,
this did not deter me from my pricing scheme for two reasons. One is
that when I applied her formula to my pieces (which was 3x material +
labor, period, for retail) and then I subtracted the 50% that a
gallery would take, I found that it wouldnât even leave me enough to
cover material and pay myself a living wage. And two, I had just
spent a lot of time researching pricing formulas and reading blogs
from artists and jewelers more experienced than myself. And, much of
what I read emphasized how too many beginners (and seasoned sellers
for that matter) price their items too low because they undervalue
their work and their time, or because it is just a hobby for them.
And that pricing too low not only undervalues you, but it undervalues
all jewelers and artists if buyers can get quality items for cheaper
elsewhere.
So, since this thread is about âREAL-WORLD pricingâ, Iâd like some
more opinions about my formula. I feel like itâs totally reasonable
(and perhaps even too low), but at the same time I understand the
importance of not pricing yourself out of the market. I donât think
Iâm pricing myself out of the market, but when I look on Etsy at what
others are charging for specific items the prices seem to have quite
a range. So, what say ye seasoned Orchidians? Is it wishful thinking
that I could charge enough to cover my materials, pay myself a
salary, and have some money left over to invest in furthuring my
craft, AND that people would pay it?
Thanks for being so helpful and awesome Orchid community!
Melanie