Pricing Jewelry for Profit...Pricing handmade jewelry is part art, part science. learn how to price your jewelry.
There are many jewelry pricing formulas. However, this is one jewelry pricing formula that should yield you a profit:
Handcrafted Jewelry Price = Materials + Labor + Overhead + Profit
|Price Component||What It Is|
|Materials||Cost of beads, jewelry findings, wire, stringing material, etc.|
|Labor||An hourly wage for making your jewelry.|
|Overhead||Cost of studio space rental, utilities, advertising, stationery, packaging, jewelry making tools and equipment, etc.|
|Profit||The difference between your costs and income.|
Study each component of a handcrafted jewelry price and price your handmade jewelry accordingly.
Determining the costs of materials is probably the easiest price component to determine.
Simply keep track of what each jewelry making component cost you. Then, add up the cost of each item used to make a piece of jewelry.
And, remember, if you purchased a bag of 100 jump rings, determine the cost of each jump ring. If you paid $5 per bag, the cost of one jump ring is $.05.
You'll want to pay yourself an hourly wage for making your jewelry.
This wage is what you think you should make per hour, but consider the difficulty of the jewelry making technique.
The wage per hour can be any figure.
Some common wages to use might be the hourly rate you make at your fulltime job, your country's minimum wage rate, or something between these two wages. You get to decide what you're paid.Overhead
Overhead Rate = Annual Overhead / Annual Jewelry Making Hours
You'll need to determine your overhead rate. It's expressed as a percentage of the combined cost of materials and labor divided by your annual jewelry making hours.
Overhead is the cost of all the things that you use - directly or indirectly - to make jewelry, but are not a part of the jewelry item.
Your overhead includes the cost of things such as...
Add up the annual cost of all these things. Keep a log of how many hours you spend making your jewelry over the year.
Then, divide your annual overhead costs by your annual jewelry making hours.
Multiply this overhead rate by the total cost of materials and labor.Profit
Profit is the money you want to make over and above your costs. And, make no mistake, profit is a major reason you start a jewelry business.
Your profit is a percentage, determined by you, of all your other costs. It is added to the price of your jewelry last.
As you can see, pricing jewelry can get very complex.
But, it's well worth working through the math to arrive at a jewelry price that will keep you in business for years to come.
Use the jewelry pricing formula to determine an initial price.
Then, if necessary, adjust the price of your jewelry accounting for the following...
Know Your Customer
Your customer and her price range. Research the price of similar beaded jewelry in your niche.
Know Your Jewelry
What's unique about your jewelry? Do you use top quality gemstones or a labor intensive jewelry making technique such as beadwork?
These are a few of the things that will influence your customers' perceived value of your jewelry.
Remember, truly unique jewelry commands a higher price.Know Your Marketplace
Where do you sell your jewelry?
Selling jewelry at a local flea market may not command the same price as selling at a high end jewelry show.
The same goes for selling jewelry online.
What's the look and feel of the online selling site or your own website? Does it say I'm a professional or I'm just playing?
Pricing and selling your jewelry for a profit is a skill acquired through experience.
The above considerations will influence the price of your jewelry - up or down.
Using the above jewelry pricing formula, and knowing your customer, product and marketplace, will help you with pricing jewelry at a fair price for your customer, and you.
Here are two of the best resources that I've found that provides in depth information and examples for pricing jewelry...