How to price your jewelry for sale
Originally published October 2013. Updated December 2018.
I started selling handmade jewelry in 2002. In that time, I’ve made some mistakes and learned a few things when it comes to pricing your jewelry for sale. Here are a few of my tips to make sure you get a fair price for your handmade resin jewelry.
When I first started selling handmade art jewelry, I made sterling silver jewelry. The formula that worked best for me was to triple my materials cost. Silver was reasonably priced then and a triple markup allowed me to cover the materials and equipment, then left me with a fair profit for my labor. Once I moved into resin jewelry, that clearly wasn’t enough. If you’re only spending dimes to dollars on materials, multiplying that amount times three is going to undervalue your final product.
- Figure out the fixed costs associated with selling your jewelry. These are easy to overlook because no one thinks about these when you’re casting resin, but they certainly are important. These costs include insurance, taxes and licensing fees, utilities (phone, electricity), any interest (if you’re carrying a credit card balance on your supplies purchased for example) and finally the depreciation costs. (These can be significant if you have a lot of equipment in your studio.)
- Decide what is a fair wage per hour for you as the person making the jewelry. Another way to think of this is to ask yourself what you would have to pay someone to do this for you. Calculate the number of pieces that you can make in an hour. Divide your hourly wage by the number of pieces to get a labor cost per piece.
- Calculate the variable costs for producing the jewelry. This includes resin, findings, inclusions, etc. You will also have costs associated with the jewelry that can be shared over several pieces. For example, a $5.00 mold that can be used to create 10 castings would add 50 cents to each piece, not $5.00.
- Add the costs from Steps 1, 2 and 3 together to get your cost per piece.
Add a markup to compensate yourself as the owner of the business.
Most people stop after step 4 and say that’s a fair price. This isn’t even a wholesale price. You need to add a percentage onto the cost per piece as the owner of your store. Think about it, if you pay someone to make these for you, by the time you pay for supplies and labor, there is nothing left for you. As the owner of the business, you are the brains and your money is at risk. You deserve to be compensated as such.
So how much should you add?
There’s no right or wrong answer. If you’re a beginning artist, 25 percent is a good start. Once you are experienced (e.g. you’re making the items faster and with fewer mistakes), a 50 percent markup is more appropriate.
This final number is now your wholesale price. (If you’re thinking, but I’m not selling wholesale, ‘who cares?’, keep reading.)
The wholesale price is important because this is the amount a boutique or gallery would have to pay to buy a quantity of your jewelry. (In the wholesale business, you are going to set a minimum purchase — either in dollars or pieces — that someone needs to make in order to get that price.) My wholesale price per piece is such that I could never afford to sell a single piece at that price, but 30 pieces at that price is a reasonable sum.
Multiply your wholesale price by (at least) two to get the retail price. This is where I see many jewelry makers make mistakes at pricing. They stop at the wholesale price because they’re afraid of charging too much for the jewelry. Here’s why you need to markup the wholesale price you got in Step 5:
- 1. Assuming you are going to sell your jewelry at some kind of retail outlet, whether at a craft fair or online venue, you need to think of yourself as a retailer of your product. As a retailer, you need to cover the expenses of your booth entry fee, craft fair tent, display materials, credit card fees, packaging costs (boxes and bags), and to be able to pay yourself to work as cashier for your store. (If you couldn’t do it, you would have to pay someone to run the cash register. You shouldn’t treat yourself any differently.)
2. You have the cost of maintaining an inventory. In selling wholesale, oftentimes jewelry isn’t made until a store places an order. Money isn’t tied up in finished inventory simply waiting for a shop to place an order. When you’re selling retail though, things are different. You have invested money in a finished product that should provide you a return when it sells. Think of it as a loan — you need to be making some interest on that loan!
- 3. If things go well and you decide to wholesale your jewelry, stores are going to expect at least a 50 percent discount as a wholesale price. There’s no way to make a store hate you quicker than for you to sell your jewelry cheaper on a retail level than they are. Don’t think you can sell a pair of earrings at wholesale for $10, then only charge $12 if someone buys them from you retail.
So what happens if you get your retail number and you’re concerned no one is going to pay that price? You have two choices:
Find a way to create value in what you are selling. If part of the reason a piece is expensive is because of the labor to form, sand and polish it, then you need to explain that to customers. No, not everyone will understand, but those that do will appreciate the quality and be willing to pay your price.
Find a way to make your jewelry faster or cheaper. For example, when I first started making resin jewelry, I created a line of pendants made with sterling silver and resin. As the precious metals market went up, so did the price I charged for this line of jewelry. My wholesale accounts resisted the price increase, so I found an alternative. I took the line and made them with polished pewter instead. It was the same look and I was able to sell them for the price I originally charged when I first started. It was a win-win for everyone!
Of course what I’ve described here isn’t a perfect fit for every situation, but I hope I have at least given you something to think about as you’re getting ready to sell your jewels!
Unpublished Blog Posts of Resin Obsession, LLC © 2018 Resin Obsession, LLC