When you make and sell handcrafted jewelry, it sometimes seems like it takes more effort to price it than it does to make the pieces. A common mistake many jewelry artists make is pricing their products too low. Do not simply take the costs of the supplies and double or triple that for the final retail price. Instead, work on developing a pricing formula that takes all the costs into consideration.
Your first step should be to evaluate the cost of supplies and overhead. It’s easy to keep track of what the supplies cost. The overhead expenses can be a bit harder to track. For your overhead, include rent, website fees, cost of booths, and tools. Consider adding an extra ten percent to your final cost to cover your overhead. Knowing the cost of supplies and the overhead for each piece of jewelry will assure that you are making, not losing, money on each sale.
The next step is to pay yourself. Decide on a fair hourly wage to pay yourself for the work that you do. Don’t be afraid to give yourself a raise; you deserve to be compensated not only for your time but also for your skill. If you are still beginning and it takes a long time for you to complete a piece of jewelry, consider a lower wage. Then as you become more skilled and faster at your labor you can increase your wage.
After adding the cost of supplies and your wage, adjust the price so that you are making a profit on your jewelry. It is difficult to know how much we should markup our jewelry, but it does get easier with experience. An important point to remember is that many people will judge the jewelry by the price. Increasing the price of your jewelry might result in more sales because your jewelry will have a higher perceived value. This isn’t to say that everything you sell should be high priced, though. A lower end line will allow you to make sales to younger people who might become lifelong customers. Just be sure that the customer can tell the difference in quality of the two lines.
Now that you have decided on the final price of your jewelry, it is time to find ways to increase your profits. One way is to have specials. If you are charging $20 for a pair of earrings, you can offer two pairs for $18 each. People are willing to spend more if they think they are getting a good deal. Another thing you can do is to give away or significantly reduce the price on low labor items if they buy a piece of your more expensive handcrafted jewelry. Be sure not to mark down pieces that required a lot of effort.
Another way to help maximize your profits is to create a sense of urgency in the buyer. If your table is filled with similar items, the potential customer will have no pressing need to buy right away. They may decide to think it over which will cost you a sale. To combat this, don’t put every piece of jewelry on the table at shows. People will buy right away if they think that there is a chance that someone else might purchase the piece they have picked out. After you make the sale, you can then add more jewelry to your booth.
So take the time to look at your jewelry and the prices that you have set. Are you taking into the considerations all of your costs and time? Don’t be afraid to raise the price of your jewelry. A fair price will ensure that you can run your profitable handcrafted jewelry business for years to come.
