As one of the business tutors at the London Jewellery School I enjoy talking to people setting up their jewellery businesses. One of the things we spend time debating is pricing. How much should you charge?
Here is what you need to work out:
What is the cost price of the materials for the piece? Keep a document or spreadsheet that details how much everything costs. To be really accurate you need to know the cost per bead/ per weight of silver etc.
Cost of your time
What is the cost of your time? This is important. You need to pay yourself and make it worth your while. One of my bugbears is people who are making as a hobby and only charge for materials. It doesn’t place any value on workmanship and makes it harder for those who are wanting to develop a business. It also puts you in a sticky position if you decide you want to earn some money from your jewellery. So don’t do it OK!
You also need to consider hidden costs.These include:
Time to source materials.
Time to add the piece to your website or sales platform (e.g. etsy).
Time photographing the piece.
The cost of selling the item – at a craft fair, online etc.
Working out the price
If you are wholesaling (selling to stores) a calculation to consider is
Materials + overheads + labour + profit = wholesale price
If you are retailing (selling items yourself online, at craft fairs etc) the rule of thumb is the same as above and then multiply by 2 (or 3) to work out the retail price.
Use these calculations as a starting point, they are not hard and fast rules
“But I couldn’t possibly charge that”
What often happens when we do our sums is that my students say “I couldn’t possibly charge this much”. My answer is, of course you must!
There are a couple of psychological barriers that underlie this statement.
1. My work isn’t good enough to charge this much
A lack of confidence in your work is understandable when you are first starting out. You don’t have much feedback on what you have made. You look at a piece and only see the flaws. But let your customers be the judge of what they want to buy and what they are willing to pay.
2. You wouldn’t pay that price for a piece of jewellery
If this is the reason for your reluctance to charge what your work is worth then this is GREAT! Repeat after me. I am not my ideal customer. I AM NOT MY IDEAL CUSTOMER.
If your jewellery would be out of your price range this is reason to celebrate. Those of you selling cheaper pieces (between £5 and £50) are probably finding that you are not selling that much at the moment. It is this market that all but disappears when we’re in a recession. If you are looking at prices in the hundreds of pounds you are actually likely to be doing better. You may not be selling in volume but people who will spend that much on jewellery are more recession proof and are still looking for unusual handmade jewellery.
So don’t think about cutting your prices, look at upping them. If something looks too good to be true people will be suspicious of the quality. You are handmaking excellent quality items and you want potential customers to know this. One of the ways of telling people this is by your pricing. Do not sell yourself short.
One Christmas I was commissioned by a famous British actor to make a necklace for his (arguably) more famous actor wife (it was a private gift so no names). I set a price that I was pleased with and made the piece. It was picked up by a courier. When I checked my bank account I found that the actor was so happy with my work he paid me £50 more than I’d asked for. I know, we could all do with customers like that but this taught me an important lesson about the value of making something bespoke for someone who can afford (just about) anything.
So repeat after me – I am not my ideal customer, I am not my ideal customer…
Anna Campbell is an experienced teacher and enjoys different types of jewellery making including beading and metal clay. She runs her own business, Light Boat Jewellery and has made jewellery for celebrities.