How to price your jewellery
In this video from Mastered, Judy Head, a jewellery industry expert with over 30 years' experience working in the trade, shares her expertise on how to price your work.
One of the biggest challenges that jewellery makers and other creative professionals face is knowing what to charge for their work. Too low and we're earning a pittance per hour, but too high and we're priced out of this competitive market.
Being honest about the time we spend and the costs we incur is crucial. It's what makes us professionals, rather than enthusiastic amateurs.
How long does it take?
"Let’s analyse, bit-by-bit, how you're going to find a price that suits what you're doing. The next step is going to be to cost out what it's going to cost you to actually make this collection and to make it happen.
"So you start with your time: how much time does it take? Now a little exercise you should consider doing here. When you think it only takes me five minutes to run down the road and pick up a bit of metal – really? Well, how about just actually timing yourself one day:
- Five-minutes? No.
- Half an hour? Most probably.
"So start to be realistic about what it time it takes."
What are your personal costs?
"When you've actually worked it out realistically, and been really honest with yourself about how long it's going to take you to design and then to make this piece, what you should do is to decide what your bottom line is.
It's very easy to say to yourself, “I just want to sell it!"
"What are your costs – your personal costs – what is it costing you to stay alive? Never mind what it is costing to actually make the piece – what do you need in order to pay your bills at the end of the month?
"That’s your rent, your mortgage, your energy bills, your telephone bills, your internet, looking after your website, anyone who comes in to do your books, your accounts, legal work you might have to have done – all of that.
"You need to take account of all of that, plus your marketing costs as well, and any work being done by anyone else. All your raw materials. You need to total up all of those costs."
What is the price of your materials?
"There's another issue here around this business of pricing. The prices of precious metals have been extremely volatile around the last five-six years. The prices have gone up and up and up, and then more recently they have started to come down and they’re bouncing around all over the place at the moment.
"It also fair to say that, as the precious metals are bought in dollars, you have now got a situation you have your local currency buying the dollars and you've got currency fluctuations there, plus the value of your precious metal."
Putting a value on your work
"So taking all of that into account, you then have to start to think about the value of that piece of jewellery.
"Let’s say that manufacturing your piece of jewellery has come to £100. That takes account of £50 for you, because it's taken you a week to do, and you need another £50 from that. Then adding onto that the cost of the raw materials, maybe you've got £250 worth of costs before you put on a profit margin for your business and sell it.
"Either selling it to retailers, or to wholesalers, or directly to the members of the public."
Selling to the public
"What are your costs – what is it costing you to stay alive?"
"If you’re selling it to the public, you probably need to put on 100 percent – so your £250 is now £500.
"If you don't, you’ve got nothing with which to buy your raw materials, and to pay for your suppliers with the next one. And you're investing this money up front, remember. This is all up front – you haven’t got anything back – you haven’t sold it. So you've got to be building this.
"It's very easy to say to yourself, 'I just want to sell it! I've just got to get my return on my investment.'"
Selling to a wholesaler
"If you’re selling to a wholesaler, they will want their commission on top. The commission will vary:
- If it’s an inexpensive product, it’s going to be a higher commission.
- If it’s a very expensive product – because 1 percent of a lot of money is a great deal more than 25 percent of very little money – then obviously they’re going to take less.
So if you’re selling to a wholesaler, you’ll have negotiated, they will advise you on what commission they will take."
Selling to retailers
"If you're selling direct to retailers, a retailer will put on something like 125 percent, which includes VAT onto a precious metal and a precious stone piece of jewellery.
"And you will probably not get more than 30 percent mark-up on top of your own costs – you may only get 20 percent."
Watch the video and then review your pricing strategies. If you want to ask questions or discuss your findings, email [email protected] for feedback.
Mastered offer online courses for aspiring processionals in jewellery, accessories and fashion. All courses come with individual feedback from the tutor, time with a personal business coach and lifetime access to all materials. Judy's course: The Jewellery Business: A Masterclass forms part of the Grow Your Silver Jewellery Business School which includes six courses on jewellery design, business, manufacture, stone setting and advanced silver techniques.