Daily Wire Tip Aug. 2: Help with Pricing Wire Jewelry

Daily Wire Jewelry Making Tip
August 2, 2010

Question:

I have trouble knowing how to price my jewelry! Some say I am too high, and others say I am not charging enough! My method is double what it cost me to make the piece, is this correct? Please help!

-Nancy in Wilton, Iowa

Answer:

Oh my goodness! With the cost of supplies changing daily, using a formula like this (cost x 2) means that you are making your work for free! Please check out this article, How to Price Your Jewelry, and begin making some money for your art!

You should also consider checking out The Definitive Guide to Selling Handcrafted Jewelry, which goes even further in-depth about pricing, selling, and other aspects of the jewelry business.

Answer contributed by Dale “Cougar” Armstrong

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8 Comments

1. 

   Jerry Beeman

   August 2, 2010 at 7:39 am

   I’ve started using Bead Manager pro for pricing. I’ve found that there is always someone who will say your price is high. I leave it high for “Haggling” room. I’m afraid that if I lower my price they will always expect lower and lower prices. I also point out the handwork involved.

   I find that some items can sell for a higher profit margin.
   for instance, I can clear more for a Cabachon ring than my hand made Byzantine Chain.

   I also check out, on the web, what others are charging.
2. 

   V

   August 2, 2010 at 10:43 am

   I find that a lot of people (particularly customers) tend to derive pricing from the industrial model for everything. Yes, including hand-made crafts. This is not accurate for the crafts market.

   In the conventional market, chain is cheap because machines make large quantities of it, and sellers add extra based on the material involved. Pricing purely on materials is not the end-all and be-all for price… even doubling your materials cost to represent your selling price does not take into account for the labor involved in the item. Nor does it necessarily cover the value of the materials, since that can fluctuate between the time you make it and the time you have it for sale.

   This is why, for example, a time-consuming and beautiful byzantine chain will not go for anything more than a certain rate, whereas a Cabochon ring has the “impression” of wealth, focusing on a stone… so it has a higher perceived value. This, unfairly enough, even qualifies for those pre-made bezel-rings that only require popping a cabochon into a ring with some good glue and selling it for more.

   This is NOT to say that Cabochon rings can’t be time consuming. If you compare a relatively simple ring design to making *every* *single* *link* of a long chain… the economics start looking rather different than the common, modern perceived value.

   This explains one of the reasons why sailing ships were so gosh darned expensive back in the day. It wasn’t just that you were building a large wooden object built by a skilled craftsman (or, more likely, a crew of them). IT was the rope and chain that was required in large quantities that made the operating cost only in the range of noblemen and wealthy merchants. All that rope and chain had to be made and repaired by someone… and anyone who’s made their own chain, if only to sharpen your skill, knows what a challenge that is. Anyway… history lesson over.

   One of the ways that a friend of mine and fellow jeweler (who’s been doing art-fairs for 15+ years and pays for her mortgage and lifestyle solely from her copper jewelry business) is that she only makes her own chain when she’s already selling the object for a good deal based on what the pendant is made of… and how.
   Only show-pieces get all that work, and only if it’s an essential part of the design. Keep in mind, that most of her profit comes from her retail sales…. she has deals with a number of retailers and her jewelry flies off the shelf.

   So her exclusive, custom pieces she mostly makes for herself, and while I’m sure she gets more for them than she put into them, they are not a big part of her bread-and butter profit.

   She makes those chains because, ultimately, she *wants* to.
   • 

     dalecgr

     August 2, 2010 at 10:22 pm

     Awesome V, thanks so much : )
3. 

   Lila

   August 2, 2010 at 12:37 pm

   I use jewelry software to keep track of materials, inventory and sales. The default mark up is 6x on material. I lowered it to 5x since a charge a decent amount for my labor – $40/hr.
   Yes, some people say my pieces are too expensive, but I noticed that when I priced my pieces according to the above formula, my sales increased. Why? Because I understand the value of what I am selling and true potential customers recognize that. The others who complain about price want something for nothing. They have to look elsewhere for that.
4. 

   Paul Weaver

   August 2, 2010 at 1:18 pm

   I think the area that you are in makes a big difference in selling price. We first got interested in wire work and beading while visiting in Fla. where we took a class. We also check prices whenever we travel out of our midwest location and often find prices that we could not even come close to getting here.
5. 

   Thomas H

   August 2, 2010 at 1:38 pm

   The situation is one of comparison shopping. If your jewelry looks similar to something sold in a discount store, then customers expect discount store prices. Unique designs demand higher prices. You can also use the various trades as a guide – materials (your actual cost plus a percentage) plus labor (you decide what your hourly rate is [in my area, welders charge $35/hr, auto mechanics $60/hr and computer repairmen $75/hr]). If you really haven’t any idea what the market price is for your pieces, use similar-type items at a high-priced jewelry store as a guide and work down from there. If you produce jewelry store quality for unique pieces, your work will be worth it.
   • 

     dalecgr

     August 2, 2010 at 10:18 pm

     Nice observation Thomas : ) thanks!
6. 

   Madeline Scharfenstein

   August 2, 2010 at 2:04 pm

   I have always used pricing software for keeping a record of all my inventory and my finished pieces. This is wonderful software with GREAT tech help, if you should need it. The software allows you to set the markup amount but comes with a default markup in place for wholesale, direct and retail pricing. I personally feel you are charging too little for your jewelry. I also agree with Jerry Beeman who said that some pieces can sell for a higher profit margin. Good luck!