How to Sell Jewelry: Pricing
In our previous two installments, we talked about where you can sell your handmade jewelry online and offline, and how to establish shipping and returns policies.
One of the tougher aspects of selling jewelry is deciding on how to price your work. It isn’t easy to price jewelry for the simple reason that value is largely a subjective attribute when it comes to art, and jewelry is wearable art.
It also doesn’t help that turning to your competitors may not lend you much practical advice at all. Many jewelry artists routinely under-price their own work for the simple reason that they are scared of not selling anything. Doing this yourself only adds to this problem. It waters down the jewelry market, which harms everybody, and not just you.
It also may encourage you to be fast or sloppy with your work and not produce your best, because you are attributing such a low value to your finished products. So how do you decide on a price when there are no objective guidelines’
You need to factor in the following four elements to come up with a price.
- Material cost
- Cost of labor
- Cost of additional expenses
This formula is helpful because it removes some of the subjectivity and arbitrariness from the pricing process. It helps you to focus and come up with a consistent pricing scheme for all of your products.
- Material cost
You need to compensate for the cost of your materials at the very least. A lot of hobbyists are glad if their jewelry can at least pay for itself. Hopefully you will make more than that, but the material cost should give you the baseline.
Pieces with more expensive materials should cost more. You would charge more for a wire-wrapped pendant with a semi-precious gemstone (like turquoise or lapis lazuli) than one with a glass bead. For a pendant with a rarer gemstone (like aquamarine or peridot), you would charge even more. The price can be objectively justified, because the gemstone is part of the cost. You are selling the gemstone and the beautiful framework you have created for it.
- Cost of labor
This is a little more subjective, and comes down to how you value your own time. You might set your cost of labor at the minimum wage, for example. A lot of jewelers who love making jewelry, but do not do it for a living do this. Making the jewelry is already fun and rewarding, and the money is just a bonus.
Then again, if you make a lot more per hour with your day job, and could be spending more hours at work if you were spending less making jewelry, it would make more sense to set your cost of labor to the hourly rate you get paid at your day job. You will have to come up with your own plan for how you want to pay yourself for your time. Your time is your most precious commodity, so do not sell yourself short.
- Cost of additional expenses
Aside from the materials which go into making your jewelry, what other expenses do you have to make up for? You probably purchase a lot of packaging materials. There is no reason for you to subtract bubble wrap, tissue paper, boxes, organza bags, and other packaging supplies from your profits.
Likewise, you can compensate for shipping as part of your item price if you want to list low shipping rates for your products. This is a little trick that gives you some more flexibility when it comes to listing your shipping costs.
Also consider fees that you pay to stay in business. You probably pay fees for services like PayPal and Etsy when you list items and accept payments. Compensate for these fees in advance by charging more for your jewelry in the first place. That way you will not lose all your profit paying off your middleman.
Okay, so this is the one area where there are really no simple rules for establishing value. The ‘cost of labor? adds to your profit, but you should ask yourself what you deserve beyond that’especially if you make jewelry within a relatively short time period. Some pieces are quick to make, but still involve substantial effort and focus. And the value you are offering is still high’probably higher than $9.00!This ‘profit? variable probably accounts for most of the wide range you will find in jewelry prices for similar pieces.
Is the above formula your final retail item price? No’it is your wholesale price. It is the bare minimum you are willing to sell your jewelry for. It is the price you would name if someone walked up to you and asked to purchase your pieces in bulk.
It is the ‘discount? version of your price, not the full version. Take that price and double it, and you have a proper retail price.
So for example, let’s say that you wire wrapped a pendant, and your equation goes like this: Material cost ($5) + cost of labor ($10) + additional expenses ($3) + profit ($10) = $28. $56 would probably be a fair retail price for that piece.
In reality, sadly the jewelry market has been watered down terribly by a lot of hobbyists selling their work for wholesale prices or below. They do not ‘need? the money, and so they do not make any effort to pursue it.
As mentioned previously, this attitude is damaging to the handmade world as a whole. Handcrafted jewelry is one-of-a-kind, made by a real human being, with real artistry that cannot be replicated by a machine. Despite this, many artisans will sell their work for less than machine-made jewelry with far lower production costs. You do not want to price yourself out of the market, but you do not want to contribute to the cycle either.
If you must, price your work somewhere in the middle between the full retail price and the wholesale price. But remember every time you undervalue yourself, you are also undervaluing your fellow jewelry artists.
How do you get around the problem above without dropping your prices to rock bottom, but without making your work unaffordable in an already watered-down market? One great answer is to offer your customers regular discounts. Price your work at full value, but routinely offer ways to save. Offer coupons for holidays, special occasions, repeat customers, and more. Everybody loves a discount. Try experimenting with different pricing schemes.
You will likely discover though that the pricing isn’t half as important (from the point of view of making sales) as the marketing. Price your work fairly, and focus your efforts on promotion!
More from the How to Sell Jewelry series:
- Where to sell your jewelry
- How to create an airtight shipping and returns policy
- How to price your jewelry
- Best general business practices
- How to handle commissions
- How to start promoting your jewelry online and offline