Viability of Selling $100-$200 Jewelry Pieces Online

Jewelry Discussion
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As a one man company working from home, I am researching the viability of starting an online jewelry business in which I sell jewelry made with Sterling Silver and semi-precious gems (my designs and labor). My idea is to sell jewelry that costs me ~$50 in materials plus 1-2 hours of labor per item. I will sell them for $100-$200. My marketing would be limited to free PR that I drum up by emailing fashion and jewelry websites/blogs. My short term goal is at least 1 sale per day within 6 months.

I understand that this may be impossible to answer… but based on the minimal info I have provided, does this plan seem reasonable so far? What am I assuming that is naive/unrealistic?

Thanks!

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This plan seems to work, but I don’t think there is anything like free promotion. I would suggest you to offer blogs admins some kind of goodies or a fee, then they will write a ghost post for your business. Having said that, you can use google shopping ads and setup CPA ad, as per thumb rule, you should bid with ROI of at least 500%. Further, if you plan to sell it on marketplace like amazon, then try creating coupon and broadcast it among different discount sites. And if you plan to setup standalone website, then Google shopping ads along with a jewelry blog and Facebook shop might work. And I would recommend you to go live with at least 50 products. If you consider increasing your inventory you can contact us or check out our weekly auction at http://affordcrt.com/current

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What is your profit margin? If your materials are $50 and you add your labor cost and you sell at $100 per piece, how are you making a profit and able to pay yourself a salary? What are your overhead cost? Do you have a business & marketing plan written out? What are your selling cost?

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Regardless of your prices - which appear to be too low to make a living, where are you going to find 30 customers per month. You will spend a lot of time marketing your work and at a minimum, you need to have a lot of work for people to choose from. Have you considered the work to get pictures of your items, along with descriptions, fulfillment, prices of packaging, tools, overhead. You can maybe do it three years, six months seems a bit unrealistic.

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Thanks for the feedback! I do think my stated prices vs. materials and labor are low.

But this seems to be the upper limit of pricing I have seen for this range of jewelry online. In fact, $200 is very high compared to most of the the Sterling Silver + semi-precious gem jewelry I have seen online. Even handmade stuff.

I have been using reviews and ratings of jewelry to guesstimate sales online. I read that on Etsy, about 1/3 of customers leave reviews. Based on this, very few item in the $100-$200 range sell. Even on sites like Mejuri, Catbird, Vrai, etc. most of the best selling stuff is below $100, with materials around <= $50, I figure.

Finding 1 customer per day to spend $100-$200 on a piece of jewelry seems very difficult. Pricing above that seems even less likely. I wanted to see if I was missing something. This post is part of my business plan research.

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Shawn…an interesting topic to me and to many of us hobby or part time silversmiths looking to expand beyond giving presents to family and friends…a few comments… there are so many factors that I think you just have to do a lot of advance planning and research on your potential markets and marketing practices and then jump in and see what happens. I was surprised at how many books there are on selling on Etsy, Ebay, through websites, etc. It sometimes seems the whole world wants to work from home.

As an analogy, I found posts by David Geller here very helpful. He’s an expert on jewelry store productivity and pricing. Not that you are in that traditional market, but he discusses all the hidden costs in time, materials in labor and you can apply that to your own one-person-shop situation. As others have mentioned, it’s not the 1-2 hours of labor on each piece that’s going to make or break you, it’s the marketing, customer care, fulfillment and shipping, assembling supplies, etc., that are the bugbears. So having as good a business plan as possible at the start and then constantly refining it is going to be key.

Another thought I have is that you do have to find your market and methods to reach those people. I work in silver, like you, but also do gem cutting, both cabs and mid to high end faceted stones. Different markets which require different marketing strategies. As far as silver jewelry, you have several options. Yes, $100-$200 might be too high if you are looking for volume. Have you considered items which you could bang out in 20 minutes each or less? Then you would be in the impulse buy range of ~$20 to $75. Rings, pairs of earrings and small pendants can go out in a padded First Class mailer for cheap (“free shipping”), so you could look at boxing up and shipping five of these in an hour each morning…or you could look at silver with gold accents, which seems to be pretty popular now, but is a different niche market. I’ve seen it at museum shops and galleries…not an on line item, but perhaps you can find galleries to feature you.

So, yes, as you say, do a lot of business plan research, see what others seem to be doing, see what you can find on jewelry marketing in books and on line discussions. I’ve read some books on setting up a jewelry business and, since everyone seems to use a narrative form for writing now, you can find some case histories in such…they always seem to want to tell you what they did wrong as well as right…good luck! -royjohn

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Welcome to Orchid.

Folks here on Orchid have taught me that we are not selling commodities, we are selling art, which is subjective. Therefore, our success is based on how our work is different from all the other jewelry in the marketplace.

What sets your work apart will help you find your target market. Casting a wide marketing net by keeping prices affordable is a commodities game, and your focus will be on quantity and dealing with customers who purchase jewelry based on the value of the raw materials. Furthermore, when you raise your prices, your target market will change. Time is short, why not start your business the way you visualize operating it for the duration of it’s life?

Think about everything that drives the purchase of jewelry in order to not limit your future success.

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Thanks for the insight! I hadn’t heard of David Geller. He shares some great knowledge!

I’ve determined that I need to be at a higher price point for the stuff I want to make. Now I need to figure out how to find these customers. Etsy and Amazon don’t seem like a good fit.

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Greetings,

My market is mainly local shows, people who make appointments, and return business from customers who collect bracelets from my family. I do not do any internet sales beyond an email request from someone who saw us at a show. I am not sure how the internet market place works. With all of the other similar businesses on the net how would anyone know to look for me? (Thats over simplified but it it is a real question to consider)

What to charge for our jewelry has always been a topic of conversation between Rob and I. We both have different methods of determining the price but we have the same results with in a few dollars. I believe Rob has a cost/profit calculator he has posted here in the past.

My show prices are really what I would consider wholesale prices but they range from $10.00 to $500.00 with the average sale in the $100.00 range. Many times is was the sale of 50 - $10.00 or $15.00 show rings that turned a mediocre show from profitable to very profitable. I make and sell what I would call art pieces too and they are priced as one off items.

Our Dad always said you must have a Bread and Butter product. Maybe it’s earrings or an affordable bracelet but there has to be something you can sell to sustain the business while you wait for the art pieces to sell. Selling a 1000.00 bracelet twisted up from 10 ga. 14k yellow gold is nice. But given the choice I'd rather sell 10 bracelets of the same design in silver for 100.00 each. More bracelets are seen by more people that way. (Of course selling that one gold bracelet AND ten more in sterling is nice too.)

Everyone’s business model is different, just as the market areas and the wealth demographics are different.

Good luck with the adventure and let us know how it goes.

Don Meixner

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Shawn,
Take a look at Megan Auman. She’s a jeweler who has create a luxury brand for her designs through a combination of great branding, trade show sales and a high-profile teaching gig on the platform, CreativeLive. She has achieved the type of business you aspiring to.

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I have been using 25/oz delivered for the cost of sterling silver wire for the last 3 - 4 years. This includes the cost of shipping it to me. That works out to .80/gram. Add some other cost like consumables, electricity, tool wear and tear and I increase my material cost to around $1.00.gram. I apply this same rate to any material to include lapidary, resin, chains and what ever I use to make a piece of jewelry. It also goes into my cost of goods sold calculation for the IRS. Like Don, I regularly sell bracelets for $100 - $200 that have 15 - 25 grams of silver in them. As a result, my material cost is typically in the $15 - $25 range. I would be hard pressed to make a piece with a material cost of $50. After I add labor, selling costs and profit, I price my pieces in the $6 - $8/gram range. It depends a bit on the sales venue and if I have to pay a sales commission.

Don and I enjoy a market that was originally created by our father. We have each grown this original market and created new ones as we have developed our own unique styles. Don sells at local shows, word of mouth and bit on line. I sell through local higher end art stores and on-line. Neither of us make our living from the sale of our work. We are both retired and approach our art more as a hobby, but I have always structured my pricing, product line and shop to allow me to make a living at it if I had to, but I am glad that I don’t. Pricing is difficult with the two opposing forces of the availability of a market for your work and need for income. Like so many others have said in this and other similar discussions: make sure that you cover all of your costs and pay a fair hourly rate in your pricing calculation. Then add profit. I treat myself as a subcontractor and pay myself $50/hour. Then profit is applied to that number and, being the owner as well as subcontractor, I reap the benefit of both the hourly wage and profit applied to it. This works out to about $100/hour. I know that these are hard numbers for someone just starting out to achieve, but they are what it takes to allow you the flexibility to be creative and still make a living at your art. Good luck…Rob

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Rob hints at something that is a real consideration for many craft smiths who have retired from other jobs. Both of us probably aren’t required to do this crafting to survive our Golden Years. Because of this we have a degree of flexibility in our pricing that other goldsmiths and jewelers may not have. Silversmithing for me is an artistic outlet that suits my creative soul and at the same time augments my pension and savings. But it also has to be at least self supporting.

Robs analytics regards to cost/profit are very clear. They are specific to his shop and method of production but they would work for someone with similar needs in a similar situation. The same with how I work. My methods are based on the old notion of three times the cost of the raw materials as used by the traditional crafters such as the Dominy family. That 3 x’s multiplier worked 200 hundred years ago when all power was human power. But with the use of electrically powered tools, lighting in shops and the need for safety equipment, additional costs of production had to be added to find the final cost of a piece of product. Disosables like solders, buffs, polishes, cleaning supplies, et al have added another level of expense. Using a multiplier of 4 x’s raw materials prices and having an hourly shop rate of $ 48.00 an hour I maintain a comfortable margin of profit. I feel that if I were to decide to work for full time employment n the craft jewelry market I could very easily using my method.

Another thing to consider is Rob and I are one person operations. Business expenses like workers comp and pay roll deductions aren’t part of our worries. But they could change the business plan a bit if either of us were to take on an employee.

By all means look at the models we have outlined and investigate others. I think you will find that what ever boilerplate model you find you will have to modify it to suit your individual situation.

Good luck.

Don Meixner

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Although many of us are in the wonderful position of not needing the income from our hobby, remember that many others are supporting themselves (and perhaps family) with their work. Don’t under-price them just because you can. Your work is no less valuable just because your circumstances are better.

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What I charge for my work is based on cost, mark up and my market. Income is based on how much of it I sell and how much effort I put into selling it. Trying to “under-price” my competition doesn’t enter the equation…Rob

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I make craft jewelry. What sells my gear is not the price but the quality and the style. I find that my prices are no greater or lesser than prices in most at the craft fairs and art shows I attend. If anything my prices are in the middle of my market. And I don’t try to or need to compete with anyone.

Don

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Anything is possible. There are online jewelers who sell 15,000 dollar items. I only make jewelry as a part time artist and as a hobby but one thing I’ve learned from full time jewelers is that if you can, just sell gold because with gold it’s not only easier to work with, they actually list the items at 5 times the cost as opposed to just 2 or 3 times the cost of silver items. You see, you are doing the same amount of time and labor, so if you can swing the upstart cost and pay for the marketing, try to just make gold items if you are trying to do this for a living.

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Selling online isn’t easy, even inexpensive pieces seem to require lots of time communicating with the customer, and that adds to the cost. Including all of your costs into your pricing is important. Whether you sell $20 or $2000 pieces you need to not only factor in the time it takes to make it, but the time involved in marketing and selling it.

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Hi Shawn,

Profiting by Design: A Jewelry Maker’s Guide to Business Success by Marlene Richey, a MJSA Press publication is a great resource! I am glad I purchased it!

Deb H