February 21st, 2007 at 11:38 pm
How to arrive at a fair price for your jewellery
I have a strange formula for you. Its not that strange actually because whenever I use it; the price always seems right.
I add up all costs of materials used for my piece of jewellery, times it by 2 and pay myself a decent hourly wage for the time it took me.
Lets take a bracelet made of aquamarine chunks and a handmade pure silver toggle.
The toggle took quite a long time to make because of the process. I had to shape it, dry it, fire it and polish it. Let’s say my time in work (excluding drying time) was 2 hours. The aquamarine chunks cost me 10 pounds including postage. The silver itself cost 10 pounds for the bit I used. To string the aquamarine took 10 minutes. To look for the beads and order them took 20 minutes
Taking the total cost of materials (20 pounds) ,times by two, pay yourself what you want per hour. I pay 6 pounds per hour. So the total is 55 pounds. I’d say this is a fair price for a bracelet, for the work put in and the quality of it’s materials. You also end up with a profit of 35 pounds which for 2hours 30 minutes of work is a good wage (in my book). Feel free to charge 15 pounds per hour if you wish, just make sure your target market wouldn’t mind paying the sort of prices you are asking.
Never under charge either. It’s not good for you and if it’s worth it; your customers won’t mind paying the higher price, if anything you will get more respect for it.
I add up all costs of materials used for my piece of jewellery, times it by 2 and pay myself a decent hourly wage for the time it took me.
Lets take a bracelet made of aquamarine chunks and a handmade pure silver toggle.
The toggle took quite a long time to make because of the process. I had to shape it, dry it, fire it and polish it. Let’s say my time in work (excluding drying time) was 2 hours. The aquamarine chunks cost me 10 pounds including postage. The silver itself cost 10 pounds for the bit I used. To string the aquamarine took 10 minutes. To look for the beads and order them took 20 minutes
Taking the total cost of materials (20 pounds) ,times by two, pay yourself what you want per hour. I pay 6 pounds per hour. So the total is 55 pounds. I’d say this is a fair price for a bracelet, for the work put in and the quality of it’s materials. You also end up with a profit of 35 pounds which for 2hours 30 minutes of work is a good wage (in my book). Feel free to charge 15 pounds per hour if you wish, just make sure your target market wouldn’t mind paying the sort of prices you are asking.
Never under charge either. It’s not good for you and if it’s worth it; your customers won’t mind paying the higher price, if anything you will get more respect for it.
This entry was posted on Wednesday, February 21st, 2007 at 11:38 pm and is filed under Articles.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
hello
great site.
March 21st, 2007 at 5:58 pmWill this calculation give you your wholesale price then? Do you take into account any overheads like telephone, electricity, tools …?
How do you price if a shop asks for a discount?
Hi there!
March 22nd, 2007 at 4:54 pmI’m afraid this is just a very simple calculation to price those individual pieces you sell to boutiques. Wholesale and discounts are a different kettle of fish.
When it comes to selling jewellery on a bigger scale then I would suggest taking into account all that you have mentioned. I didn’t include the price of tools because (in my opinion) they are a one off cost and will last for a long time unless you have to buy a unique tool/material especially for that item of jewellery. Electricity and telephone time are more likely to be an issue when working as a full time designer creating several pieces throughout the day. If this is the situation then add daily overheads into your jewellery price. If your jewellery lends itself to being made repeatedly and easily for wholesale then I would suggest looking to source your materials at wholesale prices and adjusting the formula accordingly. If this is not possible think about just charging for your time alone and not doubling the cost of materials because you are guaranteed several sales this would still give you an excellent profit margin. Visit Eni Oken’s website to download her pricing calculator; it takes into account all of these issues in a more scientific way for both retail and wholesale prices!
Many Thanks for your question,
Kate
Hi there,
Soo glad to of found your blog! At the moment I use one of those more scientific programs, but it doesn’t really take the time put into making a one off piece into account. Going to go and read your other entries!
April 6th, 2007 at 2:40 amA good way to work out your labour rate is to find out what others would charge to do the same thing. If you became sick or just wanted a holiday and the order came through, you could then afford to subcontract the labour componant without losing all your profits. Now ask yourself would any jeweller you know be prepared to work for you for 6 pounds per hour? Where I live in Australia this is below the minimum wage. If your looking for such a salary I’ll pay for you to come and work for me!
September 22nd, 2007 at 8:16 amThe profit on the materials as correctly pointed out earlier goes towards expanding your stock of materials/costs and importantly TAX. Don’t leave yourself exposed by not putting aside the govenments share, they will track you down when your least able to pay!
So if your selling at 55 pounds then take out your costs (20) (is VAT payable?)and your left with 35.
Income tax will be based on this figure. If you had to pay someone else to do the work how much would you have left?
One way to minimise the labour costs is to increase the number of units produced. If you have a great design which you believe will appeal to lots of people make a master model and mould. The majority of the labour charges are in the original, each replica will cost mere fraction to finish.
hello kate,
i enjoy your jewellery making collectiion. i also design jewellery
April 10th, 2008 at 9:24 ammabe pearls in silver. i would appreciate if you can share some
suggestiions.