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What should I pay myself


#1

Im trying to figure out what my hourly pay should be so that I can
calculate prices for my work. Can anyone give me an Idea what rate
you use? Right Now I am pricing what my market seems to accept but
would like to know if Im correct in my pricing.

Regards, gail
www.gailwilliamsjewelry.com


#2

Hi Gail,

This comes up a lot.

I don’t know if there is a National award structure in your country,
but in Australia, there are national hourly award wages :-

Process worker: $13.19
Watch/Clockmaker Trades person: $15.22
Jeweller Tradesperson: $15.22
Watch/Clockmaker Trades person, Special Class: $16.31
Jeweller Tradesperson, Special Class: $16.31

Apprentices:-

Fist Year: $6.39
Second Year: $8.37
Third Year: $11.41
Fourth Year: $13.39

Pretty crud eh?

As a permanent part time art store worker, it’s $15.00 an hour. As a
blacksmith/cutler it’s $30 an hour, as a leather worker it’s $200 an
hour (it’s the don’t bother me rate), and as a sculptor, it’s cost
plus time plus 40%. As a Jeweller (well jeweller noob), I definitely
don’t like the award rates, I’ve also asked this question before.
It’s early days for me, so I have a bit of time to work out a fair
pricing structure for jewellery.

Regards Charles A.
P.S. As an IT professional I was getting about $85 per hour, which
sounds obscene, but IT is it’s own special kind of hell.


#3

Try charging a wee bit more than what you think the market will
accept and you’ll know right away if you’re correct. I’ve been
jewelering for 32 years and have never worked as an hourly wage
earner.


#4

just my opinion but, you take what you can get. Which brings up the
idea of stones. Obviously stones can increase the price of something
but it also increases your profit. You can make something that sells
for say $500 and it has no significant stones. Or you can design in
for stones that make it sell for $1500, assuming its acceptable to
your clientele. You’ve doubled or tripled your pocket money.


#5
Im trying to figure out what my hourly pay should be so that I can
calculate prices for my work. Can anyone give me an Idea what rate
you use? Right Now I am pricing what my market seems to accept but
would like to know if Im correct in my pricing. 

I always recommend following method:

Go to your mechanic for an oil change and observe what he does. Note
the time it takes. Than look at your bill and figure the hourly
rate. Than you decide whether you deserve more or less and act
accordingly.

Leonid Surpin
www.studioarete.com


#6
Try charging a wee bit more than what you think the market will
accept and you'll know right away if you're correct. I've been
jewelering for 32 years and have never worked as an hourly wage
earner. 

That’s an interesting way to do things, I would assume that it would
be difficult to keep a track of costs.

My Dad was sort of the same when he was earning, he would state that
I earned $200 for that job, but ask him what his overheads were, he
didn’t know, or ask him him what his time was worth… “I don’t
charge time” was his response. So in the end you didn’t know if he
really earned that money, broke even, or made a loss.

Personally my time is valuable to me, and I view it as a commodity.

Again I’m assuming that, to make your method work you’d need to know
the market.

I’m very interested in these methods, and reasoning behind them, it
help me review what I do to see if there are better ways.

Regards Charles A.


#7

From the subject line and the answers, I’m not sure if you want to
know how much to charge for your time to your customers or how much
you should be paying yourself, the amount to deposit into your
personal checking account.

CHARGING:

Typical from what I’ve seen is if you’re whole, typical is to charge
$65 to $90 an hour for the labor then add in material costs after
marking them up. Markup wholesale can be 50-1005 above the costs of
your material.

Then how much money you personally make is dependant upon how many
units you can sell.

PAYING YOURSELF:

Tougher one to answer. Its got to be worth your time to do what you
love. For some people they couldn’t live off of what they make doing
jewelry work (thank goodness for the spouse). For others they pay
themselves $50 to $100,000 a year plus provide income for the
employees as well.

if you own a store, many people, when doing it correctly, pay
themselves 105 of total STORE sales, or more.

A lot of this has to do with how busy can you make the firm. The
more you do or produce, the better the income.

David Geller
www.JewelerProfit.com


#8
Go to your mechanic for an oil change and observe what he does.
Note the time it takes. Than look at your bill and figure the
hourly rate. Than you decide whether you deserve more or less and
act accordingly. 

Leonid- Well put!

When Tim and I took a year or two break from the jewelry biz and
worked at Acme Tattoo, Tim was paid $75.00 and hour. The customer was
charged $150.00. I was just the shop girl/puke boy so I was paid in
Tips by the artists. At least $100.00 per day. Often more.

When we got back to Portland Tim decided that he should get paid at
least as much for jewelry work as he was tattooing. So we charge
$75.00 per hour for gold and $100.00 per hour for platinum work.

We never apologize for our prices. Retailers complain, but our work
sells pretty much every time.

Have fun and make lots of jewelry, oh and money too.

Jo Haemer
www.timothywgreen.com


#9

Process worker: $13.19
Watch/Clockmaker Trades person: $15.22
Jeweller Tradesperson: $15.22
Watch/Clockmaker Trades person, Special Class: $16.31
Jeweller Tradesperson, Special Class: $16.31

I don’t get it! Is Australia a capitalist country? Are these rates
mandatory, or simply a suggestion? There are people who worth 10
times that.

About you little note. I do IT consulting myself from time to time.
$85 in hour is not obscene but a starting point in negotiations. God
bless America.

Leonid Surpin
www.studioarete.com


#10

It is hard to know what to pay yourself. When you first start out you
will naturally make less an hour. When you are pricing your jewelry
you want to make sure that the labor price is not based on what you
would make but on what someone coming into your studio would make.
And are you charging for the exact time making a piece or are you
including time going to the post office and returning calls to
clients? Also, why exactly do you need this not that I
don’t think it is very important. Do you want it for pricing or to
pay yourself? These are two very different things. Now have I totally
confused things?

marlene richey
www.marlenerichey.com


#11
That's an interesting way to do things, I would assume that it
would be difficult to keep a track of costs. 

Why? I know exactly what my costs are.

or ask him him what his time was worth... "I don't charge time" was
his response. 

I charge labor for the pieces I make/repair. I don’t charge by the
hour; I charge by the piece.

If it takes me X minutes to size a ring, but I size 12 rings at once
(like a production line) and I eat lunch in between waiting for
things to cool and talk on the phone between bites, how in hell am I
gonna figure my hourly wage?

And what if I can do those 12 rings better and faster than you, do
you make more than me per week because you work slower?

From a non-conscientious employee’s POV hourly wages are great. I
don’t see how taking the time to figure out how much I make per hour
or per millisecond matters.

So in the end you didn't know if he really earned that money, broke
even, or made a loss. 

When I buy stuff from Stuller or whomever, I mark it up, therefore I
profit.

Personally my time is valuable to me, and I view it as a
commodity. 

Heck, it’s your life! Of course its valuable. Good thing you love
your job!

Again I'm assuming that, to make your method work you'd need to
know the market. 

No, my method helps me to adjust to the market.


#12

At one time, I thought about using what I got paid per hour for my
regular job - hey, my time during the day is worth $35-$50 per hour.
However, at least 2/3 of what I do when making jewelry is done after
the “creative” (high dollar) phase. Much of this work is detail
oriented but reppetative (sp?) so I have to adjust my number
accordingly.

Now, I use $10 per hour.

For retail, I triple key my materials and add my labor ($10 per
hour).

For wholesale, I double my materials and add my labor ($10 per
hour).

I still think, as artisans, we are all asking way too little money
for our work. Which is why I buy so much jewelry - I really
appreciate the time and craftsmanship involved.


#13

A couple of years ago I helped out in a top Sydney jeweller’s
workshop, I and others were paid $85 per hour.

A really top tradesman working on large diamond or other large
precious stone rings will be paid well in excess of that, only at the
top end of the trade though. I pay myself much much less than that.

I found the pressure too great and I needed all my gadgets around
me. I prefer to do my own work at my own pace. My setter charges + -
$15 per stone though he charged me $90 to set a large trilliant
Sapphire, $30 per claw! He said it took him over an hour, then he is
one of the best. My engraver charges about $10 per letter. She is
also very good, she has no competition now as all the others have
dropped their bruins. My previous man charged $3 to $4 per letter.

David Cruickshank, Australia
jewellerydavidcruickshank.com.au


#14

I am wondering if the question of WHAT to pay your self should
actually be How To Pay Yourself here in the USA all the the large
companies have figured this out so they avoid paying taxes when they
pay them selves which seem to drain my working capital every quarter.
perhaps one of those people could show a little kindness and drop a
hint or 12 as to how to go about achieving this - goo


#15

Hi Leonid,

About you little note. I do IT consulting myself from time to
time. $85 in hour is not obscene but a starting point in
negotiations. God bless America. 

Of course Australia is a capitalist country, all first world
countries are.

However as Australia is a British colony, an ex-penal colony in
fact, there are a lot of laws and legislations governing a lot of
things.

The award rate is the minimum a person is to be paid for that
profession. You can of course be paid more, depending on your
employer.

What I meant about obscene, is that I basically did nothing, it was
ridiculous… I like to work for my money :wink:

Regards Charles A.


#16

An appliance repairmen came to our home last year…$100.00 just to
knock at our door, plus parts and more for his time in our
home…what’s wrong with this scene?

We are working with very high-end merchandise, if you are
embarrassed in charging $100.00 for your one hour session. Then in my
estimation, change professions, simple as that! You MUST read “David
Gellers” book on in-shop pricing. He has a few words on this as
well…

I taught setting in an out of town school last year, at $75.00 hour!
This paid for my time in getting to the school and back (one hour
each way). The clock started ticking once I left my home-base, not
the moment I started to teach. Big difference here.

If you feel that $10.00 per hour is fine…what about overhead,
insurance, rent, your lunch money, travel expenses…all of this on
$10.00?..get yourself lawyers for bankruptcy protection you might be
needed them…(

Gerry Lewy


#17
Now, I use $10 per hour. 

Are you totally nutz ?? Some of my best ‘creative’ design time is
when trying to go to sleep. A bonus for getting up at 3:00 to do
sketch ?? HaHa. My ass in the chair and it is a minimum of 75$ unless
I really messed up on a quote. Leornid had it quite right with the oil
change thing.

jeffD
Demand Designs
Analog/Digital Modelling & Goldsmithing
http://www.gmavt.net/~jdemand


#18
Why? I know exactly what my costs are. 

The point is labour (an hourly rate) is a cost.

From a non-conscientious employee's POV hourly wages are great. I
don't see how taking the time to figure out how much I make per
hour or per millisecond matters. 

This is how most businesses functions, they know how much per hour
to charge. They can also estimate how long it’s going to take them
etc. etc etc.

With your example of 12 rings at once, lunch break, cooling time,
you’d use a bench mark. You make one ring, and that’s a ball park
bench mark. You know how long it will take you, and you can charge
this to a customer. If you have 12 rings to do and you can work
faster by doing 12 that’s extra money in your pocket… a bonus for
finishing faster. Time equals money, that time you save is yours to
either do more work or take the afternoon off.

I’m sure you do work faster than me as I’m only a first year
jeweller, but it’s a good question.

As I am a first year jeweller, and I work at a slower rate, it’s
only fair to other jewellers and the customers if my hourly rate is
less. As my skills increase, and my speed improves I could increase
my hourly wage.

As a professional person running a jewellery business you should
have worked out an annual figure (a yearly wage), and work backwards
from there to get your hourly rate. A lot of business fail as they
work the other way around and are confused why they don’t have money
to pay the bills.

An hourly rate is good for the customer and the jeweller. The
conscientious worker gets rewarded when an hourly rate is known. The
non-conscientious worker that you mentioned would lose out. I don’t
know any jeweller that charges after the work is done, it’s usually
an agreement of price before work starts. The customer gets a quote
and decides whether to let the jeweller proceed.

When I buy stuff from Stuller or whomever, I mark it up, therefore
I profit. 

This is where the rub comes in. A mark up doesn’t necessarily mean
you’ll make a profit. If there’s more work involved, advertising
costs, gas, utilities etc. etc.etc., these can eat into your profit.

Heck, it's your life! Of course its valuable. Good thing you love
your job! 

Another saying my Dad said “My time is worth nothing”.

I really don’t like that saying, he could have earned more without
that ball and chain. He was always complaining that he didn’t have
enough money.

You’re quite right I do love my job/s, but I’m going to do this
right, so that I can cover all my costs, and be able to charge the
customer accurately.

No, my method helps me to adjust to the market. 

So your method is reactive, not proactive… interesting.

Regards Charles A.


#19
The award rate is the minimum a person is to be paid for that
profession. You can of course be paid more, depending on your
employer. 

That makes sense. It is what in USA is called minimum wage.
Interesting. It is about twice what is mandated here.

Leonid Surpin
www.studioarete.com


#20

Just to clarify my question “what should I pay myself?” I have
copied an article on jewelry pricing below. This formula is out
there on quite a few articles on pricing. Although I realize I
wouldn’t charge for a learning curve, I’m just wondering if anyone
uses this formula and if so what is a fair rate range for Labor
costs? This is not “what you charge your customer for labor” it is
what I get paid per hour to complete this formula. I realize there
are variables here, eg. learning curve, don’t want to charge for the
extra time it might take me to make something for the first time.
also, I would think as you progress in your skill/talent your hourly
rate would be higher?? Then, supply/demand… when you are in
demand… well Good for you!

Jewelry Pricing Formulas

There are a few different formulas you can use when pricing your
jewelry. One piece of advice to think about before you start this
process, however, is to make sure you come up with a wholesale and
retail price early on in your business development because later it
can be too difficult to back track and do this. You want wholesale
prices in case you one day decide to sell to a shop and you want
retail prices in case you decide to sell at art shows. Obviously if
you do both, you don’t want shop owners to get made that you are
under cutting their prices, so your retail needs to be in line with
shops that you sell to.

A simple formula when pricing for wholesale is to add up your costs
(this includes labor, overhead, and supplies) and multiply by 2.

2 x (supplies + labor + overhead) = total cost to you

For retail, do the same, but multiply by 2.5 to 3 (often referred to
as keystone pricing).

Below is an example of how this formula works, and of course, this
can vary depending on the cost of your supplies, your hourly wage,
and your overhead cost, but it will give you an example of how to
apply the formula:

You make a pair of earrings and the cost of the supplies is $2; they
took you 10 minutes to make and your hourly wage is $18, so that
would be a labor cost of $3; overhead costs you’ve estimated to be
$1:

Wholesale earring price: 2 x ($2 + $3 + $1) = $12
Retail earring price: 2.5 x $12 = $30

Regards, gail