UPDATE: We created a free Jewelry Pricing Calculator, so be sure and check it out! Very simple to use!
You have decided you want to sell your handmade jewelry. You have spent your money, time and creativity to design this piece. Someone has picked up your piece, admires it, and asks to purchase it. How do you come up with the fair price of your jewelry that reflects this piece of you?
I began the art of jewelry making almost 20 years ago. There were no blogs or websites to Google the question of pricing your handmade jewelry. At the time I decided to sell my handmade jewelry, I went the path of home parties and craft shows. I used the method I am about to give you to price my jewelry fairly, but at the same time, making a nice profit.
Track Your Jewelry Making Costs
Always keep track of your purchases. Keep your receipts to refer back to. You will need to know much you paid for each bead, each crimp, your pendants and even your wire. To save time, some of these prices can be put into a notebook because the prices are very constant. For example, when you buy a bag of crimp beads, divide the cost of the bag of crimps by the the number of crimps in the bag. Then, you will always know how much each crimp cost you. You can do the same with your wire. Take the total amount you paid for it and divide it by how many inches you got. Then, you will know the price-per-inch of your wire. So, if you make a 7 inch bracelet, you can multiply the price-per-inch of your wire by 7 and come up with a total wire cost for the piece.
Add up all the components to determine the amount of money you have in the piece. Add every bead, the cost of the wire and crimps. Take this amount and then double the amount. So, if you have $10 hard cost in your piece, then the amount is now $20.
Don’t forget to pay yourself. You found the beads, you bought the beads. But, the inspiration and creativity is uniquely yours. You deserve to be paid for this. If you decide your time is worth $20 per hour and it took an hour of your time to make, then you would add $20 on to the final cost of your beads. That is how you determine the price of your jewelry.
Pricing Jewelry is Simple Math
Here’s the formula:
(Cost of Beads and Supplies x 2) + (Your Hourly Labor Rate x How Many Hours Spent Making Piece) = Final Retail Price.
So, in the example we used above, you would calculate the price your jewelry like this: ($10 x 2) + ($20 x 1)= $40 final retail price.
You have doubled the cost of your supplies ($10), you value your time at $20/hour and you spent 1 hour making the piece. Let’s try one more example to make sure we have this down. You spend $8 on supplies and materials, you value your time at $40 an hour and you spend 30 minutes making a piece of jewelry. You would calculate the final retail price like so: ($8 x 2) + ($40 x 0.5)= $36.
How do you determine how much your time is worth? You need to consider several factors. First, how quickly do you make jewelry? I make jewelry very quickly, so I can get a lot done in one hour. If you are more slow or are a beginner, perhaps $15/hour is a better standard for you. Is there an established demand for your type of designs? For example, if you have a successful Etsy store and make a lot of sales there, perhaps your time is worth a little more. Try your best to price your time fairly and if you see that your pieces aren’t selling, perhaps you have priced your time too high and need to make an adjustment.
What if Your Jewelry Isn’t Selling?
Having said that, there is more to getting your jewelry to sell than fair pricing. Picture finding yourself at a craft show, the organizers have put too many jewelry designers in the crowd, and you find yourself struggling to make it a profitable event. I learned early on that this could happen, so I had a few ideas up my sleeve to give me an edge. I made up several pairs of good, but inexpensive earrings, put them on cards with my business card, and gave away a pair of earrings with each purchase.
I am not a hoarder. If it is in my closet, and I have not worn it in a year, it goes in the give away pile. I don’t keep magazines after a couple of months. And I don’t keep jewelry I made a year ago and has not sold. My suggestion is to either cut it up and reuse the beads or, an even better idea, is to have a Clearance table and mark it down. You have money tied up there. A very smart man once told me, “Your cash flow is in the bottom 10% of your inventory.” In other words, your product that is not selling will work harder for you turned into fast cash, or having another life. A friend of mine who is also our sterling silver vendor, Peter, once told me that it is all about cash flow. Once you have gotten to the point of putting an item on clearance, it’s no longer about the time you invested making it, it’s about getting your money back. So, even if you have to price the clearance piece so low you are only covering the beads and supplies, at least you have not lost money.
In the end, women have always worn jewelry, even in Biblical times. Go to any museum in Europe and you will see jewelry on display. You are in an amazing industry, one of the few that has been proven for centuries. Bead and Bead Happy!