Jo,
I would like contribute an introductory comment for your class:
It’s easy to make a small fortune making jewelry. First start with a large fortune.
Cheers
Rick Copeland
Rocky Mountain Wonders
2 Likes
Hi gang,
I’m not sure where this will turn up in the reply stream, but I have two comments:
A) DEFINITELY suggest hiring a bookkeeper/accountant. Lee and I both use bookeepers to keep ourselves straight. (Lee for Knew Concepts, me for Eisenring, which is my side-gig.) One of the most important bits of wisdom is to know yourself well enough to know what your strengths and your weaknesses are, and where your time is best spent. Fussing with tax tables is not what I should be doing. Better by far to let someone who does that well do it instead of me. On that note, Quickbooks does have a locality sales tax module, but my memory is that it’s a subscription extra. Ours gets handled through our web-store, and dealing with those is part of the percentage we pay them for.
A bookkeeper is ultimately just another tool, like a hammer. If the business isn’t generating enough revenue to pay for the tools required to keep it going, it’s not really a going concern, and you should be honest with yourself about that.
B) speaking of tax tables… KC and Eisenring mostly sell wholesale, so this isn’t entirely apropos to most of you, but the tax laws as we’ve come to understand them, doing several thousand internet sales every year, is that you’re liable for sales tax collection only in those locations (states) where you have (or have had) a physical presence. For us, California.
The hitch is that some states classify even a single sale at a tradeshow as having established a presence. (Google “Tax Nexus”.) Some states (usually the smaller ones) make things easy by having single event salestax forms, figuring that 10% of something beats 100% of nothing, but many of the larger states (NY) figure, rightly or wrongly, that you’re going to the show anyway, so there’s an even chance they can get a bite of everything if you’re not paying attention. (The only state I know for sure is NY, because we almost had trouble with them because of MJSA a few years back.) But as long as you don’t actually sell anything while physically present in those states, you have not generated a tax nexus, so they can’t ding you. Even if they do ding you, they can only tax you on sales into their state, not all sales.
Of course, the usual disclaimers apply. Doubly so to tax stuff. Check, double-check, and and then have somebody else check again, and see if you all come up with the same answer.
FWIW,
Brian
Wow! Thank you all for your input on this subject. You all have generously given me lots to work with.
Jo
One of my many topics is “Pricing Basics, #1” Do you know how many
students who are looking to get into the jewellery selling have just no
clue at how to price a piece they just made…Some even suggest $25.00 per
hour!! Heck, Sanitary Engineers a.k.a.(garbage collectors) bring home
$40.00/hr. I draw a mid-line on my white board and ask how much do you
charge each hour? The answers are just ‘mind-boggling, to so very sad!’ At
mid-line at $50.00 hr. I say you might just make it! Some say upwards of
$75.00. I get into the topic…those below $50.00, get another job! Those
who are below, $35.00 you will stone-broke in one year!!! I suggest at
least $100.00 as the ‘break-even’ point. Safe to say, the medium-range must
be $125.00…then I supply reasons why that number will/must rise each
year!!
Gerry Lewy
(1-905-886-5961)
(1-855-564-0003)
Hi Jo,
here is my topic suggestion:
For jewelers who are just starting out, I think a good topic would be about the basics of selling online, and the basics of SEO and how search works, to get “found”…it is a huge, ever changing topic, so perhaps the the basics to create a list for later more in depth research after class…
I have many friends, with beautiful jewelry and beautiful websites, that get no traffic…at all…of course, their websites were created for more than that…also serves as a calling card/ business card…but much much more…!
Having a standalone website, while much less expensive and easier to set up than in the past, can still be difficult to drive traffic to…of course it can be done very successfully, but I believe it takes the knowledge.
I suggest that Etsy is a good way to start out…mainly because the shop template is more basic (not neccessarily a long term plus) it is easier to list a small group of items say 3 across x3down =9 items…or 3 across x 6 down= 18 items, as opposed to perhaps feeling the need to “wait until” a whole “collection” is created…I guess I am saying that someone can just jump in and “do it”…versus the added challenge of “creating the perfect website”…one can start experimenting, getting feedback, judging results, adjusting, learning, improving…at a low setup cost…especially if they are like me, and always feeling like “I am not quite ready yet…”
A new feature (Pattern) allows you to select from a template library, create a website with your URL, and sync your Etsy listings to it…so you have both.
There is a ton of helpful information on Etsy, for selling on Etsy, that discusses the basics and can be very helpful, even if one doesnt open an Etsy shop…
(,I don’t mean to come off as an Etsy commercial, but I do feel that it has merits…)
…and then there is Social Media connection…! a whole "nother thing to learn about!
just my two cents…
Julie
I tell people that there are three elements to pricing. Time, overheard and materials.
Time - figure out how much you want to earn each year and divide that by 2000 (that’s 40 hours times 50 weeks per year, although most work much more). For example, $100,000 per year is $50 per hour.
Overhead- calculated, estimate and total all of your annual overhead. That’s rent, biz insurance, tooling, work travel, phones, professional services, office supplies…everything. Then divide that number by 2000.
These two numbers, added together, are your hourly rate.
Materials- determine your material mark-up. Most of us have a sliding scale based on material cost. More of a mark-up on less expensive material, less on more expensive. Decide what yours is and stick to it.
Then as you complete work your pricing is easy to figure. It’s your hourly rate (time plus overhead) plus materials.
Theoretically the materials portion of your formula should be providing needed capital to your business. The time and overhead should cover living and operational expenses.
As time goes by, if you find you’re not making enough, just increase your rate or mark-up.
After awhile you won’t need to calculate your charge, pricing will become nearly automatic.
Mark
2 Likes