Plus, I have really been trying to put all the advice from Orchid into practice-- doubling materials and adding my hourly rate PLUS profit.
Noel, there is still something missing here, what about your
overhead? Who is paying for that expense? Is the operation of your
studio space free, or do you just include it at no charge?
Michael David Sturlin
I keep reminding myself of the advice I got years ago (and have quoted here before)-- if your toes don't curl when you quote the price, you're not charging enough.
Indeed, that quote is now the ‘saying’ in our shop. That, coupled
with David Gellers book has made an immense difference in our method
of charging and the profit we make.All for the better I might add.
Because I am a natural born coward when it comes to charging, I sort
of drift to the back of the workshop when Anne, my wife, grabs the
‘Blue book’ and quotes the price in there with a face as bland as a
pan of goats milk.My height increases by an inch as my toes curl.
And all that happens is the client says “Fine, when will it be
finished?” Best money I ever spent…
Cheers, Hans.
Also, people _expect_ Jewelers in Jewelry Stores to be successful. People think of people who do craft fairs for a living as artists. And most people think artist = unsuccessful.
I think your own prejudices are showing through here. There are many
fine artists in the store fronts and commercial shops and a lot of
mass production hacks in the craft show circuit. If you sell your
work you are a part of the “industry” whether you wish to self
identify that way or not.
I thought Rachel might be asking about the viability of making a living on the crafts show circuit, or otherwise, outside of the industry, so I answered in that vein.
As for success it has become almost impossible to make a real,
unsupported by spouse (or otherwise helped along) living in the
craft shows. The promoters and venues charge too much and the number
of shows has diluted the draw and appeal for the buying public. There
are also demographic, and economic changes that contribute to the
reduced viability of working the shows for a living and the reasons
can be debated for hours. But however you look at it the reality is
that it is gotten much harder to make doing the shows work. Yes there
are still folks out there doing it but it gets harder every year and,
many like myself have given up on selling at shows.
James Binnion
@James_Binnion
James Binnion Metal Arts
360-756-6550
No matter how much or little you charge, there is always someone that will do it for less. You must convince your customers that your work and jewelry are worth more, but first you must convince yourself. Don't be afraid to let them walk; their loss is greater than yours. This has been a hard lesson for me to learn in making the transition from price oriented wholesale to trust sensitive retail. If there is one piece of advice I could give someone just starting retail, I would say, do the very best work you can, charge for your work and be confident. Your time and talent are worth it.
Dave speakeths the truth…Ive been in the jewelry industry for a
bit more than a decade. Granted It is in the body piercing industry,
but making jewelry none the less. I personally saw and felt the
influx of overseas jewelry flood the market during the late
ninetys. I was the only one that raised our prices during that time,
and have since raised them twice more.
Sure we lost quite a number of clients, but you know what? Those
were all the fly by night clients that would go anywhere to save a
couple of cents, these were the same clients I despized dealing with.
Currently we are only dealing with the best in the industry, no
questions asked. You know what? I am so much happier dealing with
these individuals understanding they are getting the best jewelry on
the market, KNOWING they can get something similar for 1/10th the
price.
Taking this same phlisophy into the latest endeavour with my current
jewelry, I realize I have something unique and that I have a talent
for working in stainless steel. Sure its not the easiest material to
work with, but making it my own is precious to me. Valuing the skills
that I have are important to me…not to mention the overhead and
other expenses dealing with this material. I do not undersell myself,
period.
P@
PS: One little interesting factoid about the metals market, and this
concerns stainless…we/I pay surcharges on the material per pound.
Since 2003, the surcharges have gone up approximately 1500%, this is
the industries adjustment for metals prices…so now stainless
steel is quite the precious metal.
Noel,
Maybe you could try pretending you are selling for the fabulous
artist, Noel Yovovich. Try not being you-- Imagine you are selling
the work of a friend you admire. In the early days I used to do this
with a friend. We would switch and sell one another’s work. I agree
with Dave–you aren’t being unreasonable in what you are charging.
But in the posts you sound sort of apologetic and the clients will
pick up on that and feel something isn’t right. Before you start
showing customers the metal price charts, get yourself a copy of the
latest Vogue magazine and check out the prices of a few blouses and
shoes and handbags!!! Just for the perspective. I’ve only seen a few
pictures of your work so I can’t say about the whole collection but
from what I’ve seen you offer work that is unique and has emotional
appeal – these are the aspects to connect you to your clients and
where you can focus your energy.
Recently a woman came in to find a chain for a gold pendant she had
purchased elsewhere. She liked a chain I had which is a very basic
cable link chain which I used to be able to buy by the foot many
years ago. It is a very dense chain and I can’t get it any longer.
Now they like to sell chain which is sort of fluffy – looks bigger
than it is, or bigger than it weighs, actually. The chain in
discussion has a handmade clasp arrangement but that is not the whole
reason for the price which was $1200. Partly I am not at all anxious
to get rid of these chains which have a handmade look and which I can
no longer get. The lady went looking online for chains and found many
that were much cheaper and she wanted to know why this one was so
much. And I told her what I have said here-- that the chain is very
dense and solid, that it is no longer available. I also said I would
be happy to furnish a much cheaper and still nice chain which I can
easily get at a local supplier –
She bought the $1200 chain. I have absolutely no apology in my
attitude about that chain. In fact, my attitude is that she’s lucky
I will sell her that chain!
Okay, that’s enough lecture. But my point is that your attitude is
everything. If you don’t believe in your pricing neither will your
customers.
Best luck at your show,
Janet-- who would love to be thinking about jewelry but is instead
deep in the planning of the Christmas window. 5th grade art projects
forever.
I have really been trying to put all the advice from Orchid into practice-- doubling materials and adding my hourly rate PLUS profit.
Doubling materials is “probably” fine. Most people don’t come out
well doubling labor.
Doubling Costs:
“COSTS” has an invoice. You KNOW your costs. Its on paper. Please
share what you consider you “costs” to be on labor. Is this what
you’re looking to pay yourself?
If you’re looking to pay yourself $20.00 an hour and you CHARGE $40
an hour, you’re screwed. I’ll assume you’re wholesale and you’re
selling to other jewelers/boutiques, etc. (Retail sellers next)
So at $20 an hour, selling for $40 an hour, you’re looking to have 2
numbers left:
$20 an hour to pay YOU.
$20 an hour left to have as profit to pay your company’s
overhead.
If you’re self employed your $20 an hour pay shrinks. Because you
pay your own taxes, and your own matching Fica, right off the bat
your $20 shrinks by 15.5%. Thus you get only $16.89, then pay state
taxes.
The $20 an hour profit has to pay for any benefits the company pays
for you PLUS rent (if you don’t work at home), phone bill,
advertising, job envelopes and then SHOP SUPPLIES. That would be
gold, silver, platinum supplies for repairs and manufacture, solder,
buffs.
There’s one more thing you have to pay for out of the $20 an hour
profit. This one bites your butt.
MISTAKES
(Like you don’t make any)
Mistakes are more often miscalculation on time. You THINK it takes 3
hours to make the piece. But it took 4.
In making my price book I found out that an 8 hour a day jeweler
ONLY works at the bench pin 5.5 hours a day. And you’re not any
better.
So in pricing I’ve added 25% to the TIME for mistakes and I added
25% to the jewelers pay for our matching taxes and benefits.
So see how it affects things.
YOUR WAY
PAY $10 an hour
TIME took 1 hour
Therefore to do the job costs $10.
Double everything = $20.00 selling price.
THE WAY I ENDED UP DOING THE PRICING:
PAY $10 an hour + 25% ($2.50) = total figured pay costs: $12.50 TIME
1 hour + 25% padded = 1.25 hours to do procedure.
Therefore the costs to do the job is $12.50 X 1.25 hours = $15.62
Double everything = $31.25 selling price
The difference between $20 and $31.25 is 36%. This is a HUGE ERROR
in pricing.
This is why I declared bankruptcy in 1987. My shop’s income was 75%
of total store income of $830,000.00.
That meant of 3 out of 4 dollars that came into the store I was
mis-pricing a good to bit to a LOT of every sale. I’m sure many
things were profitable but bigger repairs and a lot of custom I lost
my rear end.
(Side Note: That summer I met a watchmaker/accountant who showed me
how to price, we withdrew the bankruptcy and came out of it all).
As everyone posts, I am correct repairs are not price sensitive they
are trust sensitive and custom design runs a close second to that. My
custom survey shows that.
On repairs and plain out custom design everyone should use my price
book. But even I know there are areas where you won’t use it.
Especially in making things for resale. So my suggestion is to pad
everything. Big companies do.
On material costs double is fine. On labor, taking everything I
posted above, I’d suggest 4 times labor costs. No less than 3 and
that will take care of the paragraphs above.
These apply to folks wholesaling. If you’re doing this for retail,
direct to the customer, I’d triple material (up to a certain price
point) and 4 times labor. My newest price book is based upon a
jeweler being paid anywhere from $42,000 to $55,000 a year. That’s
$20 to 426 an hour pay and the book CHARGES $100 to $125 an hour.
That’s a 4-5 time markup on labor.
I spent last week with my 90 year old Uncle Irv at a car dealership.
They have many dealerships. GMC/Buick; Infinity; Chevy and brought my
Uncle up to help train the salesmen to close more sales at a higher
profit margin. In 3 days he did just that. The GMC dealership brought
my uncle up because the salesmen are under performing. The salesmen
make $32,000 to $60,000 a year. That’s LOW for car salesmen. They
told us the SHOP pays all of the overhead, ALL. The mechanics are
100% commission.
The mechanics are higher paid than the salesmen. They typically make
$60,000 to $90,000 a year.
I smiled when I asked "how are they paid?
They charge $125 an hour for shop time.
The mechanic is paid $26 out of the $125 an hour. They are paid 20%
of the retail charge, that’s a 5 time markup on labor. So if they
charge you $125 to do a job and the mechanic gets $26.
If it takes him 1 hour he’s paid $26 an hour.
But if he can do it in 45 minutes he’s making $34.66 an hour.
If he can do it in 30 minutes he’s making $52 an hour. And that’s
exactly why they make $60-$90,000 a year.
Hope this helps.
David Geller
www.JewelerProfit.com
But however you look at it the reality is that it is gotten much harder to make doing the shows work. Yes there are still folks out there doing it but it gets harder every year and, many like myself have given up on selling at shows.
Yes, times have changed. We do casting work for two people who do
shows. One is on Orchid and one is not - I won’t name either mostly
because it doesn’t matter. Both of them are doing relatively high-end
work. One is opals in gold, and the other is very fine colored stones
in gold with very high design AND craftsmanship. Neither would have
any difficulty selling to good stores either. Here in N. Cal. there
was a time when there were galleries all over that showed and sold
so-called art jewelry (whatever label you prefer), and now there’s
only one that I know of that’s really doing it well, and they sell
many things besides jewelry, too - Velvet DaVinci. As Jim says the
reasons could be debated for hours, and it wouldn’t mean anything in
the end anyway. And as I said before, in order to make a living
people have to buy your product, and if they are not it’s not their
fault - you have to make something that they want to buy. It’s not
just my opinion that the academic jewelry trade has been stuck in
time since the sixties - many have voiced it. Andy Cooperman is a
good example of someone who comes out of that world but is doing
something good with it - it can happen. I was in Albuquerque in the
days when turqoise jewelry became a worldwide fad for a few years. It
had moved well before, and still does today, but that skyrocket thing
came and went. I fear that the gallery jewelry thing has done the
same… One can make $25 silver earrings all day long, one can make
a $50,000 diamond ring all day long. I fear (I don’t know, I fear)
that the days of making $5 worth of silver into a $300 piece and
selling it consistently are largely past, though. I think the factors
are pretty simple: The big selling WAS a fad - at the time it was
fresh, but fresh only lasts for 3 days. A large portion of the US
population is grown up, has more money and more sophistication and
demands more for their money. “I never liked diamonds before but now
we have some money…” There is still a market for most
anything that’s stylish and well made, but I think, as many have
said, that the show thing and even that whole segment of jewelry is
like trying to swim upstream. The essence of making a business work
is that people have to buy your product. If they’re not, it’s not
their fault, it’s yours.
David, this is the best tutorial I have seen about pricing. I have
been using this method for some time and still am having a hard time
making any money. My problems are due to sales volume.
A certain amount of sales volume is necessary to achieve a good
income. When I talk to people who are interested in making jewelry
for a living or any one wanting to start a business, this is a big
part of what I talk about. If I have no historical records then I
have to make educated assumptions about sales volume. I personally
changed my business model pretty drastically and had to go by gut to
build back up my business but I always maintained my pricing model.
My business model changed due to divorce and being a full time
parent. My main focus has been to build sales volume and maintain
quality.
Also I found the break even point very helpful in understanding your
pricing method. The break even point can also be used to make
decisions about individual items I make as well as services I
provide or one of art work I will produce. Break even is something I
pay attention to when making decisions about equipment purchase. My
questions is always," when will this equipment pay for itself?" in
terms of pieces produced and time saved and do I have the sales
volume to support my purchase? To purchase equipment any other way
is business suicide.
As an artist I bristle at the idea that pricing may effect my
designs but, then I have to get real and make hard decisions about
whether to produce something if I don’t have the client base to
support the pricing. I do occasionally make things anyway that my
business model can’t support and that is on me and that is all good
and well if I can survive with the investment with out return on
investment. I don’t do that often, I can’t afford it.
I especially appreciated your story about declaring bankruptcy, it
makes me feel like you put your money where your mouth is. I always
read your posts.
Sam Patania, Tucson
I think there are a couple of factors at play here first it is the relative rareness of the turquoise and its quality compared to turquoise in general from all places. A good stone is a good stone no matter where it's from turquoise or not so in that regards by all means get what you feel it is worth.
Agreed. Most people in Colorado are unaware there is turquoise in
Colorado and is a good selling point. Of course on the opposite side
of the coin there are people who remember when they used to grade the
dirt roads in Cripple Creek with the mine tailings. Every time it
rained people would walk the roads looking for turquoise. It got to
be a safety problem with people bending over in the middle of the
road not paying attention to auto traffic. Given that there are very
few operating Turqouise mines in the US and precious few producing
turquoise hard enough to cut without stabilizing. The price is only
going to go up.
These pieces are well worth the price and just need the right
customer to come by and appreciate it. A Christmas craft show at a
local high school is unlikely to have such a customer. Although I did
sell one of my nicer pieces made with Rutilated Quartz in the first
sale of the morning to an older couple who knew something about
minerals as they were able to identify quite a few of the stones in
my jewelry. Obviously they knew the value of the stone.
Regardless of the show there is always going to be at least one
making comments on things priced too high. I can draw the same
parallel with the price of gas. I’m old enough to remember gas at 29
cents a gallon and gas wars driving the price down to 24 cents. I
wasn’t old enough to be driving but old enough to remember my dad
complaining about losing money at his coin operated gas pumps. That
and slugs (counterfeit coins) were some of my early memories of
conversations with my dad.
I was in Crested Butte this summer and came across Lapis from the local deposit. While some of it was of good quality when compared to Afghani Lapis a lot of the quality was substandard when compared to Lapis in general but... It was mined there and the gentleman selling it was doing quite well and getting much more for it than he could have probably gotten else where because it is a local commodity. It is a good marketing strategy in certain situations.
I’ve been trying to get a hold of some Colorado Lapis for 3 years
now. It’s from a claim on Italian Mountain near Crested Butte. The
family that owns the claim have protected it at gunpoint. Rumors and
speculation over the years have been that it is mined out to the
latest that they were still mining but not selling locally. Last time
I bought any was at the Cotin Tail show in Buena Vista and the
seller’s name or company name was Zaccharia Zypp. Probably the same
person you met in Crested Butte. He seems to have the inside track to
the stuff. I have a precious few pieces left. You’re right that it
doesn’t hold a candle to Afhagan Lapis. It’s more of a grayish blue.
Difficult to get a polish on. But goes well with Cripple Creek
turquoise. Which gives me and idea for a bracelet I need to make…
Rick Copeland
Silversmith and Lapidary Artisan
Colorado Springs, Colorado
rockymountainwonders.com
Please share what you consider you "costs" to be on labor. Is this what you're looking to pay yourself?
Actually, I charge $60/hour for wholesale, double for retail. I
don’t tell anyone that-- I don’t want to get into it. That has to
cover all those overhead costs you spoke of. What I “get paid” is
what I can afford to take out of my business account after all is
said and done, and it ain’t that much.
In the real world, I set my prices by what I perceive the market
will bear, then I do my calculations to see whether I can afford to
keep making the piece (or type of piece). I do continue to push
these numbers up-- it takes courage. It helps a lot to have one or
more really high-end ambitious pieces in my booth, on the order of
the teapot most of you have seen (in my Orchid gallery). This gives
credibility to the smaller pieces-- or at least to my confidence.
Noel
Sorry for the lag, had some shows…To all who responded to my thread
somewhere in this post about being able to survive on one’s own as a
jeweler, thank you. I appreciate it. I knew it wasn’t going to be
easy getting into it then again I wasn’t really figuring on 5 years
in order to turn a profit (amazing how quickly you can burn through 3
years of ‘real job’ savings!) I plan to keep on keeping on and see
what happens. Working for myself and having a tight budget still
outweighs a nice salary with benefits where I was unhappy. Best of
luck to all Orchid members with their continuing endeavors and hopes
for big sales for you all this holiday season!
Cheers
Rachel
Dear Rachel,
It’s been interesting reading the responses to your questions as I
am hoping to start selling my jewellery soon. There are tales from
both sides of the fence and reading between the lines, one can make
it work if one is determined enough and has the correct attitude.
Good luck in what you decide. Let us know if you do decide to go it
alone and how it goes. Since joining Orchid, I have found the members
to be of enormous help and encouragement and I’m sure they will
continue to be of great support to you in your venture.
Helen
UK