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Survey of Custom Jewelry Pricing


#1

Since I started reading and occasionally contributing to the Orchid
archive I have heard the subject of pricing come up on numerous
occasions.

I think it would be helpful to everyone on the list if we did a
small survey of custom jewelers on the list to see how they price
their creations.

My suggestions would be to mention how you sell your jewelry such as
at shows ( retail or wholesale ), through a retail website, in your
own store or gallery, by private appointment or through someone
else’s gallery.

  • How long have you been making jewelry ( experience level )

  • What type of jewelry do you make ( gold, silver, platinum, beads,
    traditional, artist style etc ).

  • How much do you charge per hour ( is this wholesale or retail )

  • How much do you mark up your materials for wholesale and retail.

I think this will be a good learning experience for those on the
list that think their work is over or under priced.

Happy Holidays
Greg DeMark
www.demarkjewelry.com


#2

Greg,

While I am always encouraging everyone to raise their prices and
while I wouldn’t mind giving people privately some of the details of
how I price my work, I think everyone on list needs to remember that
this is a public forum. Look at what happened when people could
suddenly find out what the dealer cost is on their car. Suddenly
everyone who is buying decides they can decide how much profit they
think you should make (I’m aware that car sales are much more
complicated than the dealer price but it still goes to the point). I
don’t think I want any trolling customers going through an Orchid
posting with this kind of from me and then coming in and
trying to haggle with me about how much I might be marking something
up, regardless of how justified my prices might be. Most consumers
don’t understand the true costs associated with running a business.
All they do is say well if this is costing you $100 you can sell it
to me for $105 and you’re still making money. Everyone needs to
remember that Orchid is a public forum and that everything you write
is available to anyone with a computer.

You are also going to find that costs of doing business vary widely
from area to area. A jeweler in New York City (or in the Boston area
where I am located) have much higher costs of doing business than
someone in Montana. Therefore our markups are going to have to be
higher regardless of any other factors.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
www.spirerjewelers.com


#3

Greg… I love this as I was just thinking of revamping how I price
my jewelry. Some tips were given to me by a new friend who has been
designing/selling (w/s & retail) for about 7 years. I was trying to
figure out if her tips would work for me…

I’ll put down what I currently do and what my new friend has
suggested.

My suggestions would be to mention how you sell your jewelry such
as at shows ( retail or wholesale ), 

Strictly Wholesale at this point. Looking at some local retail shows
for next year.

- How long have you been making jewelry ( experience level ) Wax
carving for 12 years. 

Wholesaling (started out part-time with a job and one local trade
show) for 6 years Full time wholesaling for 2.

- What type of jewelry do you make ( gold, silver, platinum, beads,
traditional, artist style etc ). 

Sterling (wax carved pendants, rings, etc…) with beads. Evolving
to get rid of the beads stringing and wire-wrapping (too much!). I am
adding 14K and flush set colored diamonds to my line for next year.

- How much do you charge per hour ( is this wholesale or retail )
Never figured it out like that. 

My line is a production line- nothing is one of a kind- yet. Am
curious to see how the artists who do one- of-a-kind and who
fabricate everything from scratch figure it out. I’m taking some
fabrication classes and am thinking of expanding my line in the
future.

I used to multiply my cost x3, add labor plus 15%.

My new friend has told me to follow this formula, which I think I
really like except for one thing that’s confusing me, which I’m
mention in a sec:

Cost of materials X 28% for overhead.
+cost of labor
multiply everything by 2.2 and that’s your wholesale cost.

*I was a little confused as to why one would multiply the 28%
overhead by 2.2. Is there a reason why one would take a 2.2 markup on
the 28% overhead? Isn’t that already a mark-up?

So, I’ve been following her formula, but I haven’t been taking the
2.2 markup on the 28%. Am I still undercharging?

I’m really curious to see what others do!

Great thread!
Amery


#4

I work in a small, independent retail jewelry store. I am the only
goldsmith in the store.

I have been making jewelry for 26 years, with 4 years of art school
before that.

I work in gold and platinum only. Most of my custom work involves
carving waxes, sometimes purely of my own design, and sometimes to
reset customer’s stones.

I charge $90 per hour retail for repairs.

I charge $115 per hour retail for custom work. That includes design
time, except for the 15 to 30 minutes I might spend talking to the
customer throughout the process. Usually the salepeople can get a
good idea of what the customer wants beforehand, so I don’t waste
time. I mark up materials 2 1/2 times, except if the work involves a
large diamond, which is marked up very little these days. That would
be priced by the salesperson. If a customer is particularly price
conscious, I might only go 2 times on the metal cost of platinum,
since it’s outrageous right now.

I usually slightly overestimate the cost to give some room for labor
variables. If it comes out to less, I lower the price accordingly.
Customers do not like to pay more than what they’re quoted, and
they’re pleasantly surprised when it’s less.

Since metal prices have become so volatile, on a custom piece where
the metal is a large part of the cost, I have been telling customers
that the quote is dependent on the market price of the metal.

I would say 95% of my customers proceed with the work after a cost
estimate, and the vast majority aren’t put off by the price.


#5

My setting book printing charges have gone through the roof, so what
do I do? I have now decided not to publish anymore “on paper”, why?
Colouring gets too darned expensive per sheet and am almost never
satisfied with the final results…so I’ve transferred all of my
essays onto a CD.

Because of this decision, I have now even supplied more essays
without the need of printing costs being raised each month. I have
even supplied videos on “Graver Shaping”.

The reason for this notice, if your costs are zooming upward,
re-think your options! My gravers are slowly inching upward as well.
But that will have no effect on my Orchidian friends and their
needs…I have finished working on another “plan of attack” to make
future graver orders even “more accessible” to all…(to
follow very soon)…

Gerry!


#6

I don’t have an hourly rate. Thinking in terms of hourly is a trap.
You want say, $35 an hour? So you’re ecstatic when you make 45. What
if I told you you could make $300/hr? $3000?

Depends on what you spend that hour doing. One could toil away making
what one thinks is a nifty looking thingie, set some low cost stones
in it, sell it(hopefully!) make a few bucks. One could also talk to a
client, make a few phone calls, talk again with the client, rattle
the torch around, and make a much bigger pile of money. And have
enough free time left over to leisurely peruse the Orchid Archives
:wink:

The money is in the product. The labor supports the product. If
you’re self employed look at the big picture. Supply and demand.

30 years, retail storefront, mostly 18K and platinum.


#7

OK Greg, I’ll bite. I am interested in how others price custom.

I was strictly wholesale for 27 years and have been primarily retail
for the last 2 years. We have retail, fine jewelry stores. I’ve been
goldsmithing full time, sole support of my family, since 1978. We
focus on gold/pd/pt, diamond, engagement and wedding jewelry.

Pricing custom is tricky business. Our situation is a larger shop
that usually will have three or four people working on each custom
job, one sketches, one carves or mills the wax and casts, one sets
it up and finishes it and one polishes it. I think that most of
those steps are undervalued by the outside world because they don’t
understand them. As an example, when we create a model on Matrix and
then mill it with Revo, we don’t charge a whole lot more than we do
when we carve a wax by hand. But in checking what our wholesale
costs would be if we jobbed out the CAD CAM work, we found that they
would be $250-$400 just to create the wax! I have a friend that has
a little retail operation and he charges $1300 retail, before the
stones or metals are factored in, for any custom job that is created
using a CAD CAM system. He takes the time to help the client
understand.

When you make something in house, from scratch, you absolutely can
not compete the the prices of mass produced overseas merchandise.
Goldsmiths are a limited resource, they only work 8 hours a day.
When we tie them up all day on one job we need to be charging enough
to compensate ourselves for the loss of that resource. I like to
compare that to buying merchandise for the cases. When buying that
merchandise you are only limited by your line of credit, you can buy
as much as you can afford. But when custom making merchandise, it
doesn’t matter how much money you have, we can only make as many
pieces as we have hours in the day…its a supply and demand thing.

We have a few different ways of arriving at our custom prices. I
have been doing this so long I will look at a job and think, that’s
about a $300 piece without the diamonds (wholesale), or that one is
worth $650 plus the stones (wholesale). Then I calculate the cost of
the stones and add 20%. I will add the stones and the ring together
and that is my wholesale. I multiply, using a sliding scale from 2.8
to 1.7, and I have my retail. That probably sounds like seat of the
pants pricing but we can check it and we do.

A more simple method that gets us to about the same place is this.
First you need to calculate your cost, and that has three
components. Material cost (findings, metals, solder, stones), Labor
cost (time the job takes multiplied by an average hourly wage) and
Overhead costs (you really need to figure that out, it may be $10 to
$30 per hour, you can get yourself into trouble if you don’t
consider overhead accurately).

Once you have your cost calculated you can mark it up. For wholesale
we multiply by 1.6 to 1.8 depending on difficulty.

Retail mark ups can be done as follows;

Cost x 3 for low difficulty (fitted wedding bands, no stones for
example).

Cost x 3.5 for moderate difficulty (diamond fitted wedding bands for
example).

Cost x 4 for difficult (prongs and channels, compound curves for
example).

Cost x 4.5 for very difficult (two tone, pave, hand engraved for
example).

This method works just fine as long as people can accurately project
costs (not that easy to do).

Here is an example;

A 14k yg diamond wedding band with 7 =.18ct tw. channel set
diamonds. 

.18ct x 500 p/ct = $90 (diamonds) 

2.5 dwt. x $24 = $60 (gold) 

4.5 hours x $45 per hour (labor and overhead) = $203 

Total cost $353 

$353 x 1.6 = $565 (wholesale)
$353 x 3.5 = $1236 (retail)

I guess it’s possible that this may seem like a large mark-up to
some, but you need to consider all of the down-time, mistakes,
chipped melee and days when absolutely everything goes wrong. I have
been doing it like this for years and it never seems like enough to
me.

Mark


#8

In pricing there are three factors which make up the product cost:
materials, labor, and overhead. It doesn’t really matter if the
labor is in house or subcontracted, or whether the cost is based on a
wholesale or retail perspective. The overhead calculation should
account for all of the costs involved in making and selling the
product which aren’t included in the materials and labor columns.

None of these by themselves accounts for a profit, profit is
something additional that needs to be factored in as a markup to the
product cost. This is usually applied in 2 categories; profit on
material investment, and profit on business enterprise.

If some part of your product is produced offsite you can be sure
that the subcontractor is including their proportional overhead, plus
profit, for the work they are doing, in the price you are being
charged.

If a person perceives a portion of their price as a profit and yet
that money is actually being paid out to cover overhead costs, or any
other expense, it isn’t really profit is it? It is part of the cost
of = production of whatever is being produced. Not Profit.

Additionally, if a portion of your wages are being paid out from
your pocket to cover part of your overhead, as a deduction from the
hourly rate rather than an inclusion in your hourly rate, then how
much are you actually making per hour for your labor?

The September 2007 issue of MJSA Journal has a good article on this
topic by Gerry Davies called “The Price is Right (Or Is It?)”.

Michael David Sturlin
www.goldcrochet.com
www.michaeldavidsturlin.com


#9
I don't have an hourly rate. Thinking in terms of hourly is a
trap. You want say, $35 an hour? So you're ecstatic when you make
45. What if I told you you could make $300/hr? $3000? 

As another said, too - I don’t watch the clock. I think about my
cost in materials, and price things by intuition, basically. I look
at a piece and say, “That’s worth $1000” - bang. If it did it per
hour the same piece would be 2/3 that much. I price it as art, and
take into account what I call the “zap” value. Two pieces can take
the same time, but one is just a commodity, and one is simply
exquisite - I price accordingly. It’s not how much you make per
hour, it’s how much you make per year…

http://www.donivanandmaggiora.com