How to Price Handcrafted Jewelry

Is it possible to make a living or at least make a significant impact on your income by selling your handcrafted jewelry? Yes! However, to sell your jewelry you have to decide what to charge for it. There are several ways to price your work. No matter which method you use, you must be sure to get a fair return on your materials, time, and other expenses. Be forewarned: if you are to get a fair price for your work, there will be many jewelrymakers underselling you. You will need to have an 'edge' in order to compete, but that's a topic for another time.

A Common Method

One common pricing method is to take the cost of materials multiplied by two for wholesaling. The wholesale price is the price you charge when you sell your jewelry to a retailer (the person who sells the jewelry to the public). You would sell wholesale to boutiques, jewelry stores, galleries, etc. If you are selling your jewelry directly to the public, you can multiply the cost of your materials by three to get the retail price. This pricing method can work well in situations where the cost of materials is relatively high or where the time spent making the jewelry is minimal. Let's review the first pricing method:

• Wholesale Price: Cost of Materials x 2
• Retail Price: Cost of Materials x 3

The Method I Use

Most of my jewelry is beadwork or wirework where the cost of materials is low compared with the amount of time spent making each piece. I use a more complicated method of pricing. I keep track of my prices in an Excel spreadsheet, so I can see the effects of changes in materials costs, overhead, or wages. For wholesale:

• Cost of Materials x 2 (i.e., retail cost of materials)
• Time Required to Make Jewelry x Cost Per Hour (don't pay yourself less than mininum wage!)
• Add these numbers. Take 30% of it and add it to your total to cover overhead costs.

Theoretically, I would double this number (wholesale x 2) or add one-third of the total (0.33xwholesale + wholesale) to get my retail price. I only sell retail via my website and my actual formula is tailored for that market. I add an additional 10% to the cost to cover my credit card processor/shopping cart (plus costs of website hosting and site updates/maintenance) and a further 10% of that total to give myself some profit. I tend to make my prices to round numbers (e.g., $350 instead of $351.72 or $348.35). Many people have success setting prices just under a round number (e.g., $49.97 instead of $50). This works well if your items are relatively inexpensive, but can look calculating for high-end pieces. Try out both ideas and see what works best for you.

What The Market Will Bear

As you can see, developing a pricing schedule is really more art than science. I realize there are many people who feel pricing should be based on 'what the market will bear'. Obviously, you need to keep the market in mind. You need to think of your market when you consider the cost of materials or whether a long-term project is in your best financial interest. You might also consider market prices when setting sale prices or special event prices. You don't simply match or undercut market prices for all of your items!

Cost of Materials

Be sure to include all of your costs. Include packing materials and the shipping costs from when you purchased your supplies. If you take things from home to use in your work, estimate a value for them.

Overhead Costs

Your pricing needs to allow for overhead costs. Overhead costs are expenses for things that are needed to run your business but aren't for the materials used to make your product. This can include office/studio expenses (rent, electricity, computers, office supplies, etc.), subscriptions, tools, classes, advertising, licenses and rental fees, insurance, auto usage, internet access, returns, breakage, etc. Keep track of all business-related expenses. Keep receipts! Tracking these costs helps you to get the maximum tax deduction and plan for future business, as well as helps you to set a fair price. You will want to spread these costs out across your sales. After you have been in business for a while, you will be able to put a dollar amount on overhead, so you will know how much you need to add to your prices to incorporate these costs.

Your Hourly Rate

Your hourly rate will be dependent on whether or not you have employees. If you don't have employees, be sure to cover all of the time required to make and market your jewelry. For me, this includes time spent designing, photographing, image processing, writing descriptions, taking care of correspondence, etc., as well as actually making the jewelry. Don't fall into the trap of undervaluing your time just because you are doing something you love. On the flip side, don't assume that setting youself an hourly rate guarantees you will actually 'see' that amount of money. If you are a sole proprietor or partner, you may find yourself reinvesting this money back into your business. You will want to control the final profit to balance your income against taxes and future business needs.

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