Why are you pricing your jewelry so LOW???
Updated: Jan 29
After this recent holiday season I have one question for many of my jewelry making peers, Why are you pricing your jewelry so LOW??? If you are like many artisans, your jewelry crafting is a career and you need a living wage to sustain your family, your facility, buy your supplies and equipment, and, oh yeah, do the mundane activities of eating and maintaining a roof over your head. And if you are a hobbyist, you still need to keep the cabs, gems, and metal buying obsession strong during those trips to the bead shows, not to mention support the classes you love to take and the new tools you just have to own.
Maybe the problem is artists are so focused on making and producing a wonderfully unique product, that the practical side of being sustainable gets forgotten. When I mentor jewelry students, I’ve heard all the rationals for their pricing habits. Let me first debunk the ones I hear most:
Student: I love what I do.
My response: Just because you enjoy your job doesn’t mean you shouldn’t get paid for doing it.
Student: I never thought about an hourly wage.
My response: So, in other words, you would also work for someone else for free?
Student: I pay myself $10 an hour.
My response: So basically you think your skills are less than the $15 that is being suggested for a minimum wage worker? You might as well work for McDonald's for what you are paying yourself.
Student: I price my work according to the lowest price comparison on Etsy.
My response: This does not account for “your” economic needs. Get out of the mindset you are racing to the bottom.
Student: I just guestimate my pricing.
My response: Let the mathematical numbers do the talking and take the emotion out of it.
Student: I wouldn’t pay that much for jewelry.
My response: Just because at the moment you can’t afford luxury items, doesn’t mean you should short change your sales by assuming others can’t either.
Student: I’m afraid if I put the “real” pricing on my jewelry it won’t sell.
My response: You need to find the appropriate market for your jewelry versus dumbing down your prices.
Student: I’m happy to break even.
My response: You mean after all is said and done you want to work for the cost of your materials?
We need to learn to accurately price our Jewelry by:
Making a decent wage matching what you are worth.
Avoiding undervaluing your jewelry skills and efforts.
Avoiding emotional pricing and other common pricing mistakes.
Knowing EXACTLY how much each jewelry piece costs to make.
Knowing all of your overhead costs to price accurately.
Calculating your costs of goods and services.
Covering costs for contract laborers or employees. For example a cast service or helper.
Knowing your own economic needs to sustain your craft.
Knowing and understanding your market by doing market research, and understanding your target customer, their needs, and buying trends. (This is another conversation in itself.)
Being aware of your competition, but eliminating the mindset of racing to the bottom.
How To Work Out Your Hourly Rate Before deciding the sales price of your jewelry, you need to first calculate your hourly rate. This will differ from that of other artists because your cost of living, experience, and the amount of time you are dedicating to your jewelry business is different.
How much income would you like/need to make per year?
How many weeks will you work per year?
How many hours a week will you work?
How many hours do you spend on office work for a week? Is that working rate different than your bench rate?
How much experience do you have in your field?
Be realistic with what your hourly rate should be, but don’t underprice yourself. Would you ever take an outside job offering the salary you are paying yourself?
How To Price Your Jewelry?
Multiply that number by 3. It represents your time in selecting the item, buying it, using it, then replacing it. Smart shopping, buying wholesale or buying in bulk helps keep this price low. If the individual item is too costly multiplying that figure may jack up the price of your final product out of the market. Some people use different multipliers such as 4x the cost, so this number can be adjusted for your needs.
Keep track of how many hours you worked on a piece and multiply it by your hourly rate.
Keep track of your overhead and other expenses.
To calculate those costs, calculate your yearly costs of each item. Do you rent a building, space, or is your studio part of your home? What percentage of your home are you using? (If it is 10% of the entire building calculate 10% of the rent, water, electric, water, trash removal, etc.)
Once you add up the costs, break it down to an hourly cost. (For instance, take the yearly amount and break it down by month, then by week, then daily, and finally by the hour.) This number is your overhead cost and could be as low as $2.00, $5.00 or $10.00 depending on your overhead expenses. This number will be added to each piece made multiplied by the time spent on the piece. Remember to include: • Rent • Electricity • Phone • Water • Trash removal • Website • Advertising
Keep track of your equipment/tools purchased over the year and divide by 365 days to get a daily usage rate.
Packaging costs of boxes, tissue, ribbon, bags, or stickers.
Shipping and handling fee.
Taxes to be saved for the end of the year for government collection.
You may notice different formulas in the industry and slight variations so I encourage you to look around for what best suits you. However, the main point here is to be good to yourself, treat yourself well, and pay yourself appropriately for your skills.
Making Jewelry is something we all enjoy, and when someone makes a purchase, it is validating and feeding our soul. If I can help bring more joy to your sales efforts or business, feel free to contact me for One-to-One Mentoring for your Jewelry business.
Beat the Winter doldrums and take a Fun and Stimulating Live Workshop Online with Holly
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Jorvik Viking Purse (3 Spots)
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Wed., Feb 26 - April 1 (skip April 8) April 15 - May 6 • 6:00 pm - 7:30 pm EST
Carving and Sculpting in Metal Clay (3 Spots)
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Just a teaser of the cabochon's my husband Chris is working on for his 10 at 10 on Thursday Auction (1/30/20) More coming!