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Real-World Pricing

Hi, Melanie,

Not to turn all sales-y on you, but this kind of question is exactly
what I am trying to deal with in my webinar (Dec 11th 1pm MT, I
think – to my dismay, I can’t find anything about it on line!) I’m
happy to talk about what I turned up, whern time (and copyright)
allows, but several artists responded thoughtfully right here on
Orchid in the last week or so. I especially urge you to look at Jo
Haemer’s and Jim Binnion’s notes earlier in this thread.

Noel

Melanie - a while ago i condensed the real world pricing according
to my world. Yours goes in the same direction, with the possible
exception of a larger number for profit. It is in the Orchid
archives.

https://orchid.ganoksin.com/t/tutorial-on-pricing-jewelry-for-wholesale

It’s just three parts - direct costs - those directly attributed to
this piece, overhead costs - the stuff you have to pay no matter what
you do, and a profit part. The nuisance is figuring out all your
overhead costs and attributing them to your hourly rate.

Judy Hoch G.G.

Melanie- It’s easier to go down than up in prices. Price your work
so that you can give yourself a living wage and pay taxes. Go as high
as you can until folks balk. Then adjust downward.

Any craftsman that has more work than they can do should raise their
prices until they have a comfortable work load and life style.

As I have stated in the past…Tim and I keystone our materials
cost and charge $75.00 to $100.00 per hour at the wholesale level. We
then let the gallery or store make up as they wish. Never let the
retailer tell you what you should charge. Remember jewelry is a
luxury item. It’s all about perceived value on the part of the
customer.

Have fun and make lots of jewelry.
Jo Haemer

Melanie -

I adjust this percentage per piece, depending on how much wasted
material I had, or any materials I didn't actually calculate, like
jump rings or whatever. 

Why would you not include the cost of “jump rings or whatever” in
your price calculations? Materials are materials, and leaving out
some of them from your calculations will give you a false price.

You have to pay for them: they are part of your costs, and really
should be included.

Also - I’m really intrigued to know what you might consider to be
"whatever" !

Janet

Hello Melanie,

Don’t get too wrapped up over your friend’s rejection of your
pricing formula. When starting out, pricing is mostly a guessing
game with some comparison shopping thrown in. You seem to have a
feeling for what an attractive price is for your work, since your
formula results are close to your ‘gut pricing’. Respect that
instinct.

For validation of your pricing, ask 2 or 3 friends who like and BUY
jewelry, to offer an opinion. I think this is especially helpful
when your materials are not precious metal. At least my experience
bears this out when I began making a line featuring copper. My
jewelry-astute friends all said my initial price was too low. I
bumped the price up another 30% and sold out.

A wise Orchidian once said, if you sell out, the price is too low.
so I bumped my price up ANOTHER 25%, and sold most of the pieces.
That is a good place to be; good sales, but not a sell out.

Good luck with your fledgling business,
Judy in Kansas, where it’s a cool, cloudy day with welcome rain in
the forecast. Yea preciptation!

For anyone who is interested, here is a link about my webinar:

http://www.ganoksin.com/gnkurl/ep81oi

Most of what I have to say has been covered in this thread!

Noel

Janet,

You are correct, they really should be calculated. Really, the only
reason I did it that way is because I have no idea if 10% is too
much for the overhead that I actually pay for, and the price of a
couple of jump rings is minimal.

The ‘whatever’ that I was referring to included other very small
items similar to that, more specifically a few rivets or grommets.

But you are 100% correct. And, I am actually in the middle of
putting together a spreadsheet that will allow me to quickly plug in
either the current market value or the price that I paid for metal
(now that I also started keeping all my receipts - I really am that
much of a beginner), and the amount that I use, so that I can easily
calculate the cost of ALL the materials in my pieces. But I still
have the problem of trying to figure out how to better estimate a
realistic overhead charge since I have been doing this for less than
a year, meaning that I have no way of getting an annual average cost.
So, even if I include the cost of the jump rings or rivets or
grommets into the materials, I still feel like I have kind of a false
price… :frowning:

Melanie

Thanks Judy in Kansas! You are very sweet. I’m already going over my
mental ‘list’ of friends for the best guinea pigs, so to speak. :slight_smile:
-Melanie

Not to turn all sales-y on you, but this kind of question is
exactly what I am trying to deal with in my webinar 

Noel, I’m glad you went sales-y because it sounds like your webinar
will help clear a lot of things up! :slight_smile:

I especially urge you to look at Jo Haemer's and Jim Binnion's
notes earlier in this thread. 

Yes, Jo’s comments were quite helpful (I assume you were talking
about the one mentioning to never say sorry for your prices…),
although it’s a little different when a more experienced colleague
balks at your pricing formula than when a customer just balks at your
prices.

I could not however find the message from Jim Binnion…

Thanks,
Melanie

For all interested in pricing…

MJSA Expo New York March 8 - 10, 2015 at the Hilton New York

Sunday March 8th
Pricing at the Bench with David Geller
Author of Geller’s Blue Book to Jewelry Repair & Design

Bench jewelers and custom designers commonly admit that they don’t
always take into account all of the costs involved in charging for
their work. Frommaterials, labor, and subcontractor costs, to
valuing your years of experience, training, and other factors, there
is a lot involved. This informative session will help you factor in
all of the costs, even the hidden ones.

Orchid members get a special pre-reg and are always welcome!! We
could even have an Orchid get together!
http://www.ganoksin.com/gnkurl/ep814o

Corrie Silvia Berry
MJSA

Melanie- It's easier to go down than up in prices. 

I read an art business blog and on there it says that it looks bad
if you lower your prices. I’m not saying the blog is the authority,
just saying that NOTHING is very clear when you’re starting out. sigh
The ONLY clear thing is that I love to make stuff with metal and
stones!! haha

Thanks for your response! You are always helpful and encouraging! :slight_smile:

Melanie

Thanks Judy! That formula is logistically very similar to my formula
but with the added bonus of having a lot more details for overhead,
which will come in very handy once I’ve been selling longer and can
reasonably figure out my annual overhead expenses. That is the
biggest reason that right now I’m just adding 10% to materials, in
the hopes (and wild guess) that 10% might cover it. Time will tell.

Thanks again,
Melanie

Last week I promised to send a copy of my pricing spreadsheet. We
went away on vacation and it never happened

they are attached as both a PDF and XLS spreadsheet

http://www.ganoksin.com/ftp/CP.xls

Rob

[Edit]

Sharing files and pictures with Orchid is easy - Simply attach them
to your Orchid post.

[/Edit]

Pricing has always been a problem for me. However, figuring all the
costs involved in making it is not the problem, it is figuring out
the perception of its value that the customer brings to it, and
adding that to its selling price.

I learned this some years ago when I had a wide, hinged sterling
bracelet, overlaid with 24 K gold Keum boo, and set with 5 lovely
stones. I priced it at $250 (that was when gold and silver were way
way downin price. I was just starting out selling my things and
participating in a show, when a good friend, who was also in the
showcame up to me and said “That price is ridiculous.” “Well,” I
replied, being new at the art of selling, “how much should I reduce
it.” “Reduce it” she snorted, “No, you need to raise it” She then
askedme for another tag, tore off the one I had on it, and doubled
the price.“It will never sell at that price” I said, to which she
replied, “Trust me.”

How glad I am that I did. About 20 minutes later a customer came to
my booth, and bought the bracelet without blinking an eye at the
price. It is a perfect demonstration of what Jo means when she talks
about perceived value.

Of course that was years ago, and with the downturn in the market
for luxury items at least in some of the shows in which I am
currently participating, I find myself adding more inexpensive items
to appeal the customer who is looking for something less that $200.
Alma

If you can figure out who you are and how you want to live and work,
you can design your business around that. What matters is making it
work for you. There are no rules that you must follow. Although it
can be interesting, it doesn’t much matter how other people do it.
Even though they may tell you that you are doing it wrong, other
people really don’t care how you do it. Don’t make the mistake of
building a business in hopes of earning status or the approval of
peers, that can be an empty dream. It’s much more fulfilling to find
a way to earn what you need while doing what you love, then build on
that.

Mark

http://www.ganoksin.com/ftp/CP.xls
http://www.ganoksin.com/ftp/CPCP1.pdf 

I failed to mention on my spreadsheet that you start with the weight
in grams of silver (see the black box with the white text). The
spreadsheet will do the rest. You can change any of the parameters in
the top section to suit your needs and the spreadsheet will adjust. I
usually just treat lapidary as silver by weight and account for it
that way in the final price. You canals add it as other. Feel free to
ask questions if you have them. Thanks. Rob

Rob Meixner