My customers and I are both struggling with the price of metals and
the resultilng huge cost of jewelry.
I have used a simple pricing formula in the past, but now I wonder
if I’m way off base.
What do you think of this formula?
Actual cost of materials x 2 plus+ design and labor wholesale cost
Wholesale cost x 2 Retail price
I like it because of its simplicity and ease of use when bidding
pieces.
Thanks for your thoughts.
Carla
Actual cost of materials x 2 plus+ design and labor wholesale cost Wholesale cost x 2 Retail price
Carla, I use a similar pricing formula, but instead of just labor
cost, I charge a studio rate into which I lump labor, cost of doing
business (tools, equipment, gas, keeping the lights on, photography,
etc.) and, at least in theory, a profit margin and then multiply
that rate times the number of hours in a piece. The profit margin,
like in any business, should be for crazy things few artists seem to
have such as savings or retirement accounts, but it’s also there
when the cost of buying materials goes up exponentially.
Cost of doing business and profit margin were hot topics in the
Professional Development Seminar during the SNAG conference last
year. Harriete Estel Berman has from this talk on her
website (scroll down past this year’s agenda).
http://www.ganoksin.com/gnkurl/9d
Hope this helps.
Victoria
Carla, I have been struggling with gold and silver prices, too. For
some of my heavier pieces, I am now marking up the silver by 1.5
instead of 2, for wholesale. This still gives me profit, but makes
the pieces more affordable. I understand that 3-key for retail is
common in higher-end jewelry, anyhow. I guess that silver is getting
a bit higher-end nowdays, huh?
Also included in my pricing formula is design and labor, and a 15%
studio overhead fee to keep the roof over my head, buy gas & oxygen,
etc.
M’lou Brubaker
Minnesota, USA