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Realistic Pricing


#1

I have been making custom pieces for about a year now and still have
problems determining realistic prices. ?None of my customers has
complained about the price, but family members and friends have
consistently said that my prices are too low. ?I frankly don’t need
the income, but I am sensitive to the fact that other people do, and
I don’t want to underprice the market. ?I haven’t found items in my
searches that are similar enough to give me an idea of the market
price. ?Also, the usual pricing advice on jewelry sites ?(materials +
hourly wage + 10%) doesn’t seem to apply to items with ?$5.00 in
materials and 20+ hours in time. ?Does anyone in the community have
any advice in this area?

Tom Hammett


#2

For retail custom our labor is 35$ per hour. Times that by 3 and
then discount if you must. 20 hour labor will be $2100 without the
materials. Of course no one is going to buy a silver item for 2
thousand dollars but gold they will. If it’s a hobby then who cares,
right.


#3

Think retail and what the price would be if you had either the
expense of running a small store or consigned your work at 2 times
what you would otherwise sell it for. This should be the price from
which you discount should you want or need to. Contact me off line
and I will send you my pricing spreadsheet. It addresses the
indirect and fixed cost elements that your current formula does not
address. I too don’t need the income derived from my jewelry
activities, but I also have a lot invested in it in time, material,
knowledge, tools etc. and don’t want to give it away. Finally, you
need to create a market for your work not just follow the market.
This is not a new discussion, so search the archives. Good luck.
Thanks. Rob

Rob Meixner


#4

Hello Thomas,

“Frankly, I don’t need he income”- if this is correct, why then are
you asking about realistic pricinge? A well as asking family,
friends, etc- who I presume are not jewelers- about the issue? It
make no sense to me …but that’s just me! One either needs to recoup
the costs plus labour plus overhead, plus consultation time for
custom design and fabrication work or simply-prices things according
to what seems to be reasonable compensation for the enjoyment
attained while engaging in one’s hobby.

If it were a business(an ongoing service or provision of goods
offered to clientele expecting some semblance of regular hours and a
place at which they can seek the goods or service(s) the profits
thereof sustaining the members of a household, in all likelihood,
exclusively and) which those profits insure that the business helps
the household meet, an at least subsistence level, above poverty one
of the mot important operations i attention to effective profit and
losses that help the owner(s) project goals for the future - not only
of their ‘brand’, but for growth, marketing, and human resources
determining the success or failure of that business to remain viable
as an Independent compared to, for instance, truly /strictly retail
situations that typify the vast majority of reselling jewelers and
jewelry chain stores that outsource practically all of their 'custom’
work perhaps changing watch batteries or links in a band! Honestly, I
always find it -funny or perplexing if not questionable- when
individual’s profess that they “don’t need the money” but conversely
have a business of some sort ! That said, The materials, and I mean
ALL the materials,: from the obvious precious metals costs (even base
metals if that is the media your custom job requires), stones or
replacement stones, or matching stones to be set, and the consumables
like solder (which in the case of plumb golds of any karat or even
silvers - to replace an inventory item you may have bought 10 years
ago is a quite different line item/cost today. So you have to account
for the replacement cost of your consumable bench chemicals, goods
and tools (ie. piercing saw blades)when you are inventorying and
calculating the costs involved in fabrication and finishing all the
way to packaging. I note “inventorying” because many independent
jeweler’s skip this step, and don’t realise how much they loose not
only per job, but in any period one accounts for in terms of
profitability at the bench and in marketing of which packaging is
part! For example, one bottle of Cupronil Flux (admittedly, my
favourite! and in my opinion the hands down best on the market!) may
cost $15.00 for a quart but without flux you can only perform cold
connections, and the consistency of your workpieces will not be
maintained if you use something else “in-a-pinch”- so it’s value
transcends the 15$ and becomes at least $1.00 per use since
consistency and reliability of your joins is an important factor in
the reputation you have built with clients or are building. in other
words, the little things are often overlooked.

As far as metals 2.5 x cost is fairly standard and if it is anything
more than cut from a sheet or wire (i. e.- roll printing) that
entails a fabrication charge on top of the base price to the client
or for a small production run when figuring a job.

Stones are far more variable: is it old stock that has been sitting
in your safe, or purchased especially for x job?, is it replaceable
(i. e covellite is a good example of a stone of which many mines are
closed and must be sourced from overseas suppliers unless “you know a
lapidary…” kind of thing and have connections that won’t rip you off
given the rarity or availability-if not lack of it - of a given
stone?Does it need to be cut just for your deign ?If precious stone,
are you replacing with a lesser quality than the original, even if
they are accent tones? In short, stones are far harder to figure if
they are anything other than a 6mm x 4mm oval of a common
semi-precious material. In general (and I mean a vast sweeping
generalization) you can charge 3x the cost provided it is easily
replaceable. In fact, let’s say your client “loves tigereye”- (you
personally wish it were wiped off the face of the planet!). The
stone that will fit your setting/design cost you $1.50, 20 years ago
and still costs under 2 bucks per piece however you would never
charge a customer $1.50 or even 3.75 because of perceived value- Set
a minimum for that material on your inventory. Yes, it is replaceable
and cheap relative to say, high quality and grade amethyst which is
relatively common as well. But the perceived value represents a key
to marketing and to the client, a 'treasured ’ part of the piece they
are paying you to create, so depending on the size (i. e-pretend it
is a 7mm round cab: not to common, and large-ish compared to the
myriad ovals generally seen) and the cut price the stone that cost
you $1.50 at at least $12.00. If you wanted to figure it
rationalising the inflated price jut think about the petrol used in
transporting the material to the factory where it was cut, then off
to a wholesaler- maybe shipped across an ocean, then transported to
the place you bought it, and your gas to and from that buying point-
I’m betting it alone is far more than the $12 bucks you list the
material at on your inventory! So consider the perceived value when
listing the cost of any material, and then factor in the realitie of
delivering the tone to your client a part and parcel of the deign and
fabrication. It also gives you a point for 'wiggling" or offering a
discount on the price: your bottom line may turn out to be $5.00 as
an inventory line item, but you are getting 12.00, a still reasonable
and affordable price for anyone ordering custom work, so you offer
the client a 20% discount on the material- you are till making a
profit- all is good! I hope thi helps you really think about your
procedures and encourage you to make and maintain an inventory that
will not only reflect the current cost:profit of any given supplies,
metal, consumables, as well a time involved in terms of monetizing
your overhead and breaking it down to an hourly cost and then adding
that to your standard charge for labour (32.00 an hour is pretty
common for simple fabrication) then, in the case of custom or
commissioned work consider not only the consultation, but rendering,
proofing (time involved with the client) the design and then any
other time spent directly counseling the client regarding the
workpiece- it does quickly add up and some clients spend as much time
discussing the project(taking up all the time they can) as is
possible. Occasionally individual’s exceed the norm and you can see
them coming, so-to-speak, o write into your contract/jobbing order 1
hour of deign and consulting- that will limit those few individual’s
that presume you have nothing else to do on the day and time of their
appointment.

Limit walk-ins for custom work by setting appointments unless you
truly don’t “need the money” and have all the time in the world to
discuss a client’s desires- Consulting is also a line item for your
inventory! So consider it weighed against the jobs on the bench and
even the time of year (some are busier than others for most art
jewelers /metalsmiths) and have an appropriate “menu” of services
that is seasonal so you are at least, compensated accurately for your
time, material and overhead so in growing your hobby into a business,
its profitability supports your projection for growth, expansion,
even being able to hire additional help to decrease the day-to-day
chores involved in maintaining a successful business (ie.- insuring
no metals are walking or blowing out of the shop and you maximize
your collection of scrap to maximize the returns you see after
refining) with happy happy clients! Best Regards. rer If you have any
questions or need clarification feel free to contact me off list.


#5

I’m not in the trade anymore, but I can tell you the quickest way to
bankruptcy is pricing too low. It is hard for most of us, but you
gotta workout a system and stick to it. If you can work in gold and
find your market it is easier. Silver is just the pits if you are
trying to feed your kids. The competition from amateurs and offshore
shops is intense in silver. so, you really have to have something
distinctive and price it right. You’l never pay the bill unless you
at least keystone it for wholesale and triple key it for retail. And
with silver thats poverty wages. Everybody struggles with pricing
and you just have to find what works for you. Read up on consumer
psychology and pricing. it sounds odd. but there is a market segment
out there that just LOVES to pay a lot forstuff. If you have
distinctive pieces… often they will move much faster at a higher
price. You can’t totally ignore the market, but you arenot selling
peanuts or apples either. You are selling art. Figure out what you
need to survive and double that at least. There are two ways to keep
your head above water. sell a LOT of lower priced items, or sell a
few higher priced items. You can’t compete with the offshores in the
former. you don’t need the folks who buy jewelry by price as your
customers anyway. Its tough.


#6

I have read these threads regarding realistic pricing with great
interest. My brother and I have discussed this between ourselves a
few times. I am sure he discussed this with our father just as I
did. Dad had a pretty complicated method of pricing his work. Rob
has a very good spread sheet calculator that I like and use now and
then. I tend to use a variation of the Dominie Craft Shop
multiplier. And Rob and I come in about the same price for similar
parts of our work. One thing Dad said that I have stuck to over the
years is this, Even if it is a hobby you have to treat it like it is
a business. “It” can be jewelry, music, painting, just about any
craft endeavor. Treating it like it is a business means you take
your work seriously.

Don Meixner


#7
For retail custom our labor is 35$ per hour. Times that by 3 and
then discount if you must. 20 hour labor will be $2100 without the
materials. Of course no one is going to buy a silver item for 2
thousand dollars but gold they will. If it's a hobby then who
cares, right. 

I will tell you trade shops charge $65 to $85 an hour. This is
wholesale. Drop the $35 idea. $65 to $85 an hour and double it or
2.5 times. My price book retail is based upon charging retail $125
to $150 an hour

Low priced materiel is 3 to 5 times cost

Suggest you price things in two columns
One column is LABOR only

the next column is MATERIAL only So add the two columns separately
and then combine them for a total if a customer says “can you do
better?” the answer is "as you know we can’t discount labor, but
maybe I can give you a break on the materiel. Discount parts only,
Don’t discount labor.

David
jewelerprofit.com


#8

Attached is my pricing spreadsheet. A number of you have asked for
and I have lost track of who I sent it to. It is fairly large. If it
can’t be posted as an active spreadsheet, I have also sent it as a
pdf.


http://www.ganoksin.com/ftp/CP7.17.15.xls

Thanks. Rob


#9

This is in response to the Meixner post about pricing and to many
others who are under pricing. You can say “I’m retired.” or “It’s
only a hobby.” Just remember, you’re undercutting the prices of all
the people trying to make a living at it.

If you’re going to sell your jewelry, produce professional quality
and charge a professional rate.

Dick Stromberg


#10

I will charge whatever I want, to whomever I want. I also give away
as much of my work to local charities and individuals as I sell. I
believe that we just had a discussion about paying it forward. Don’t
lecture me in this public forum about how I choose to run my
business. I have done it this way for over forty years and I am not
about to change. I am sorry if the way that I do it is a problem for
you and possibly others, but deal with it because there are a lot of
us who are fairly good at what we do who are retired, working at it
as a hobby, or just don’t need the income. The fact that we make up
part of the competitive landscape is your problem. When making
jewelry and, more importantly, pricing it, is governed by a shop rate
book that we all must follow, I will find something else to do. Until
then I will continue to exlore new designs, materials, tools, and
processes, challenge myself, and try to meet the needs of my
customers as honestly and professionally as I can. I apologize to the
Orchid community, but this reply had to be made. I look forward to
whatever response it prompts. Thanks. Rob

Rob Meixner


#11

A few of the many things I took away from my father’s example as a
silversmith running a business are these.

  1. Charge a price that is fair for you and your customers. By doing
    so you make a living and you develop customers who will come back to
    you for jewelry and repairs. So I charge a price that is fair for me
    and I always make money on a sale and over the years I have had many
    return sales. He also said, You have to pay for the art so I charge a
    bit for arts sake.

  2. Dad also said don’t be stingy. The people in your community are
    your friends and on occasion someone may need a hand. So following my
    Dad’s example I give away jewelry for raffles to help the fire
    department, church fundraisers, library sales, Cystic Fibrosis has
    been need my family has supported for years. One year it was 16
    bracelets with a average of 18 grams of silver.

  3. And lastly he said make sure the work is finished and it is safe
    to wear. You never got anything from a Meixner’s shop that wasn’t
    polished and in Bristol Fashion. And I have a very strict rule on
    safety when it comes to jewelry. If it is dangerous to polish it
    isn’t safe to wear.

I charge what I have to charge to pay my bills, pay my taxes, any
feel like my time was worthy and well spent. I don’t look at what
others charge very often. I don’t view it as a competition. Dad said
there is always room for another smith. My brother and I live a mile
from each other. We learned a lot from our Dad and a lot more on our
own. We sometimes talk jewelry but more often talk about the kids and
grand kids. We don’t feel we are competitors but smiths doing similar
work.

I am surprised at the direction this simple question has turned.

Don Meixner


#12

Robert, Well said. I am in the same position as yourself. Retired and
making jewelry as a hobby business. My work cannot possibly effect
the mainstream jewelry market just because I can price lower than
them and still make a dandy profit. It’s not like we are
undercutting Exxon and making billions because of it. I’m sure that
your jewelry is just as hand made as mine and at the same time I
doubt if most of the jewelry industry can truly claim hand
made…

Much of what I make is not available in the majority of jewelry
stores, but if it is, I pride myself on being able to give my very
small customer base a great deal. I like you have a pay it forward
attitude, especially to some with cancer and to organizations I want
to support. Thank you for all that you do

Steve Wandt
NaturalGoldJewelry.com


#13

A timely topic for me as I have just retired as well and had hopes
of selling a few items at craft sales etc. Up till now my pieces have
been given to family members or donated to charity. I thought I would
do some checking into what a hobbyist has to do to “legally” sell his
craft:

-If you sell even one piece you must charge and remit the sales tax,
even if you are not registered you must self

  • remit

-If you go over $30,000. You must remit GST as well (however you can
then claim your GST input)

-The big change for me came with how it affects your home insurance,
as a hobbyist they have no problem with me using a oxy/acetylene unit
in my basement and if I have a break-in my rough and finished pieces
are insured.

Even if I sell one piece then I may have to purchase commercial
insurance as my stock and finished pieces would be considered
inventory and not covered under home insurance. There also could be
problems with using oxy/acetylene in a basement commercial operation.

-of course if you are successful there is the additional problem of
reporting you income etc.

After looking at what I would have to do I decided it was not worth-
while, unless I took my chances and did not report any of my sales.
That is an option I do not consider and I will keep doing what I have
in the past at the benefit of family & charity.

Gerry
live.


#14

Hi all

Just remember, you're undercutting the prices of all the people
trying to make a living at it. 

Are we really? I have found too many make very basic jewellery and
think they should charge master craftsman prices. I have also found
that many work too slowly and want far too many $ per hour. I have
been silversmithing and goldsmithing for over 30 years and was
trained by a master. I work very fast and charge good prices for my
work keystone at least.

all the best
Richard


#15

Here is a job I did recently for a jeweller in Dusseldorf in
Germany.


I booked ten hours labor out to make the ring from scratch,
including the setting of the stones.

So that’s EU500.

The EU500 is inclusive of 19% VAT.

The ring has a further story attached, but suffice to say that this
price is what you charge or you don’t get the work.

And the ring gets scoped out with a microscope, so don’t think you
can get away with shortcuts.

It’s a tough world these days.


#16

That’s just lovely, Hans. Are the stones Peridot? I can’t quite tell
the exact color on my laptop monitor. I’d pay for that - really
stunning work. Just wish I could wear rings again sigh.

Sandra Graves


#17

Robert, thank you for your excellent pricing sheet! That is
definitely going to help me as I start to enter the market.

I’d like to share something from a beginner’s perspective. I have
been working with metals only a few years and am just starting to
work on very basic stone setting. I’d like to sell my pieces to make
this hobby sustainable so I can continue to improve, and maybe turn
it into a career.

As such: frankly, it would be unfair and I would be *so uncomforable
*if I tried to sell my pieces for a price similar to what Hans or
Gerry would charge. I agree that we should charge what is both fair
to us and our customers. As it stands, anything more than $10/hr
labor charge to my customers would be unfair (i’m so slow!! lol). You
get what you pay for. I am aware that my quality is nowhere near
being close to a master jeweler’s work, so I’m far less concerned
with keeping up with the market pricing and instead am concentrating
on covering my materials/tools + a little extra for myself.


#18

Hans- Please tell me that was for labor only.

Jo Haemer


#19

Hans Meevis

So great in seeing that inside of the “V” claws, you Bright-Cut the
metal.

.Hooray!!!..:>) Some local setters here don’t even do this little
finishing, this process adds so much to the quality. In the craft of
Diamond Setting, there are ‘no short-cuts’.

Hans, great workmanship!!! I use a little phrase…"Price, Quality &
Speed, pick two!!"

*Gerry *


#20

You folks prove like i did in the 70s, almost talking me 10 years to
almost go bankrupt You have talked yourself into low prices. The
person who said they price low because they are slow and learning
will not have the brain power to double their price when their speed
doubles $10 an how. No Matter if you’re in usa, England or Australia
that’s so underpriced. I had a fellow jeweler tell me years ago he
wouldn’t buy my pricing guide but instead decided to use my thought
process.

Mainly doingg repairs, he world a 60 hour week So he told the
staff"tale of price list and add a dollar every day. On Monday
solders are 10 dollars, on Thursday they are $11, Wednesday $12. Etc"
He figured some day in the figure prices would be so high that some
customers would drop off but income would increase he’d take in the
same dollars with the less hours 2 weeks later he told me a $10
solder was now $25 and he was TAKING ON THE SAME NUMBER OF JOB
ENVELOPES

Stop it!

Don’t tell me where i live is different. Everyplace is different In
a small town in Missouri a repair jeweler (with 2 sales staff) had a
heart attack. Or of work 3 weeks His friend had a copy of my price
book, went to see him on the hospital and told him nor to worry. He
would pick up repairs twice a well, do them and drop them off. Twice
a week. He’d collect from his friend when he went back to work. He
told the staff to “charge these prices” 3 months later the jeweler
returned to work and paid his friend who charged him wholesale.
Result’the store made MORE MONEY with the boss in the hospital even
parking the other jeweler to do the work. repairs are not prove
sensitive, they are trust sensitive. 90% closing radiocustom design
comes in a close second with a 70 to 80% closing ratio My father
used to tell me"What you don’t know would fill a library" If he were
alive today he’d day"What you don’t know would fill an ipad" No
matter, this is not an ad to sell my bookyou folks have talked
yourself into poverty You can only increase productivity 25%to
increase income 50% or more charge more Male your own product? Double
or triple Markup. On silver about 5 time markupthem charge 85 to 125
an hour for labor. When figuring Labir time no matter what you come
up with work add another 25% because you’re always wrong and
customers must pay for down time. You don’t work an 8 hour day at the
bench pin but must charge for the 8 hour day David Geller