The eternal question for jewelry artists: How do I price my handmade jewelry?
Pricing handmade jewelry is one topic that jewelry artists never agree on. There are lots of different viewpoints and philosophies.
This article will discuss the following:
Things to consider when pricing your jewelry (including those you may not have thought of!)
Formulas for pricing your own jewelry. (Common retail and wholesale pricing models used by jewelry designers)
New! Some ideas for leveraging the power of the internet to create an informed pricing strategy
Keep in mind that you do much more than make jewelry as a business owner. In order to cover costs and overhead it is essential to charge more than your hourly rate + material costs, or keep your hourly rate on the high side (i.e. $18/ hour is much more realistic than $10/ hour) if you want your business to be profitable.
One mistake that new jewelry designers often make is to price their work too low. Don’t compete with imports on pricing! Your quality is better, and you can never compete with those that make $2 a day. Instead, position yourself as the high quality artisan that you are, and command reasonable prices.
As a newcomer, you can start lower if you would like, and move your pricing up as you become more well-known.
Lower pricing also can work against you because it cheapens 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 you make garbage.
I have another reason for not charging too low. This is kind of my personal soapbox:
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 artisans who charge what they are worth, are charging too much.
Those artisans that charge what they are worth then have to work so much harder to convince customers that their work is worth the cost.
That said, as a jewelry designer, you need to consider two 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 the material cost
$18/hour-labor plus 1x materials plus 50% (or whatever you want your hourly wage to be)
Eyeballing - guessing at what it should be worth (not recommended, but common)
$35/hour-labor plus 1x material
$26/hour-labor plus 1x materials plus 50%
$20/hr.labor + mat. + 5%overhead + 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
2.0 x wholesale
The ever common but not recommended “eyeballing” method
Final Ideas for Deciding How to Price Your Handmade Jewelry
Still confused? A little worried about pricing too high? Why not try using the internet to find out what the market thinks?
Here some ideas for leveraging the power of the internet to create an informed pricing strategy:
Start a blog about your jewelry. Try showcasing and storytelling without selling and build traffic and interest. Your jewelry will increase in perceived value over time and you can create a virtual fan club of potential customers. For more information on how to use blogging to create interest in your work, read the following article: Sell more Jewelry by Blogging
Try a survey. Why not ask? If you create a survey and ask people nicely to fill it out, they often will. Sweeten the deal with contest draw for a piece of your jewelry. How do you do this? You could ask a blogger with a busy blog visited by your target market to feature your contest- and maybe give them some useful content for their blog. Make the contest fun in some way for best results.
Ask at forums. You could ask for feedback from people at a shopping forum or other niche forum (related to your target market of course!) to take look at your jewelry and ask them how much they think people would pay.