The price of handmade jewelry seems to be a subject that jewelry artists never agree on. There are many different points of view and philosophies. This article will discuss some of the things to think about when considering how to price your jewelry, and some of the common pricing models used by jewelry designers.
Keep in mind that you do much more than make jewelry as a business owner. To cover costs and overhead, it is essential to charge more than your hourly rate plus material costs, or keep your hourly rate on the high side (i.e. $18/hr is much more realistic than $10/hr) if you want your business to be profitable
A mistake new jewelry designers often make is pricing their work too low.
Here are some pricing tips:
-Do not compete with imports on prices! Your quality is better and you can never compete with those who earn $2 a day. Instead, position yourself as the high-quality craftsman that you are and get reasonable prices.
-As a newcomer, you can start with a lower price if you want and increase your price as it becomes more popular.
-Lower prices can also play against you because they lower the perceived value of your work. People tend to think that you get what you pay for, so if you charge too low, people tend to think that you do rubbish.
I have another reason not to charge too low. This is kind of my personal tribune:
If you charge too low, you are not only cheapening the perceived value of your own work, you are also cheapening the work of others because the public learns to think that some craftsmen who charge what they are worth are charging too much.
Those artisans who charge what they are worth have to work much harder to convince customers that their work is worth the price.
With that said, as a jewelry designer, you need to consider 2 types of pricing: wholesale and retail.
Wholesale and retail pricing models
Common wholesale pricing models used by jewelry designers:
-3 x the material cost
-3.5 x material cost
-$18/hour- labor plus 1x materials plus 50% (or whatever you want your hourly wage to be)
-Eyeballing, i.e. guessing how much it should be worth (not recommended, but common)
-$35/hour-labor plus 1x materials
-$26/hour-labor plus 1x materials plus 50%
-$20/hr. labor + mat. + 5% general expenses + 20% profit
Common retail pricing models used by jewelry designers:
-1.4 x wholesale
-1.5 x wholesale
-1.6 x wholesale
-1.7 x wholesale
-1.8 x wholesale
-1.9 x wholesale
-The always common but not recommended “observation” method
Feel free to use any of the wholesale or retail pricing formulas to price your own work.