How to price handmade jewelry is a common question in most jewelry designers, especially newbies. It is one of the most critical parts of the business as it determines your profits and earnings. Figuring out how to price handmade jewelry is one task that requires intensive research and utmost understanding.
However, one fact, especially for newbies, is not to believe or fall for the myth or thought that setting low prices for your jewelry pieces will help you sell faster. This isn’t exactly true as you will only cheat yourself. When setting prices for your jewelry pieces, it is important to set prices that cover costs and bring profits.
Setting meager prices can also make you lose customers and value for your work. Customers may think you are a scam and your work inferior. Don’t sell yourself and your work short.
As much as we want to make profits, pricing too high or ridiculous can also cost you as you may end up without sales. All these considerations make finding that perfect price for your handmade jewelry somewhat tricky. However, as earlier stated, research and understanding are essential.
Various structures, models, and “formulas” for pricing are available, and you can find help from them. You can check them out here. You have to consider all factors and then choose which works for you and suits your brand better.
In this article, we will be exploring all possible factors to consider when pricing your handmade pieces of jewelry, as well as a simple practice or formula to use.
- Factors to Consider When Deciding How To Price Handmade Jewelry
- Setting the Price of Your Handmade Jewelry
- Branding your Handmade Jewelry
- Where to Sell Your Handmade Jewelry
Factors to Consider When Deciding How To Price Handmade Jewelry
Keep Track Of Supply And Material Costs
As the name implies, supply and material costs are costs of materials and supplies used in the direct production of your jewelry pieces. These include costs of materials such as gemstones, beads, gold, beading thread, and packaging. Keeping records and track of the costs of these items aids you in knowing the exact cost of making a piece of jewelry. You should keep a notebook or notepad for this purpose.
You can also keep all receipts of purchase for your various items. Also, be sure to know on average how much of a particular material you need to make a piece. Now, these numbers can vary from piece to piece depending on the detailing and intricacy of each jewelry piece. If it is custom made, it can also affect its cost. You can decide to keep an average number for each design and detailing.
To know the costs of making a piece of jewelry, you have to know the price of one piece or one inch of the material. For example, if you bought a bag of beads or roll of beading thread for $5, and 100 beads are in the bag, or 20ft of thread is in a roll. The price for one bead and one ft of thread will be 5/100 or 5/20 for beads and thread, respectively. You can then multiply the price you get by the number of beads or feet of thread you use for a design.
Calculate Possible Overhead Costs
Overhead costs, unlike supply costs, are not directly involved in the production of the jewelry pieces. These costs are expenses incurred as a result of running the business. These include delivery and shipping fees, rent, website fees, market trips, gas fees, internet connection, tools, business cards, etc.
You should keep track of these costs. They will help you know your expenditure and the supply costs and determine how much your baseline earnings cover costs. To make price-setting easy, set a particular percentage of the total overhead cost that you will add to the final price of every jewelry piece.
Determine Your Labour Costs
Labour is your time, time spent making each piece of jewelry. Therefore labor cost is the cost of your time; how much your time is worth. It is imperative to know your labor costs as it contributes to your pricing.
To calculate your labor costs, you first set an hourly pay rate for yourself and know how much time you spend making each jewelry piece. To calculate the final price, you multiply your hourly rate by the time spent making each piece.
However, just like your supply costs, your labor cost will vary depending on the intricacy and detailing of each piece. You have to consider this. Now, keeping a timer or stopwatch every time you’re making a piece might be tiresome and distracting. All you have to do then is estimate how much time you spend on each piece.
You can also categorize the time according to length and detailing. This will save you a lot of time during production and final pricing.
Perform Market Research
Before attaching prices to your handmade jewelry pieces, it is advised that you carry out market research. This is so you can find out how much competitors who produce similar jewelry pieces sell theirs for. It also gives you an idea of the worth of such pieces and a range to work with.
Note, however, that you don’t have to set the same prices as them.
Researching the market also tells you how popular or sought-after similar pieces are, telling you if it is worth the risk of selling or not. It also gives you an idea of what customers and your possible target audience want.
While performing this, you can also ask friends, family how much they will be willing to pay for your jewelry pieces.
Know Your Target Audience
Knowing your target audience is a crucial factor you have to consider when setting prices for your handmade jewelry. Your audience’s earning power, lifestyle, age, and status will affect how much they are willing to pay for your jewelry pieces, hence your price.
If you’re selling at a craft show or farmers’ market, the price won’t be the same as if you were selling at a high-end boutique. Know who you’re selling to.
Setting the Price of Your Handmade Jewelry
As mentioned above, there are various formulas or models you can use to price your handmade jewelry. However, a simple procedure involves summing up all considered costs and possible profit you want to earn.
Supply/material costs + Labour costs + % Overhead costs + % Profit = Retail price
If you do not sell directly, you sell to retailers who then resell, or for customers who buy in bulk, it is necessary to calculate a wholesale price. This price will be lower than your retail price but higher than your cost price. It will also be the baseline price at which you can sell. This ensures your customers are happy with their purchases while you still make profits.
Supply/material costs + Labour costs + % Overhead costs = Wholesale price
You can set different percentage overhead costs for your wholesale price. This should, however, not be too outrageous.
To avoid losses, you have to set several items that people will buy to qualify as wholesale. It can range from 5-10 or up to 12 items depending on your choice.
To also help with pricing, you can reduce your costs. You can achieve this by buying supplies and materials in bulk, so you get them at wholesale prices and cut down on shipping fees.
Purchasing from stores and platforms that offer free shipping will also cut down costs. Buying quality supplies and materials also prevents loss and waste.
Branding your Handmade Jewelry
With reasonable prices or not, the need to properly brand your handmade jewelry cannot be overemphasized. All need to be adequately catered for, from production to finishing and even down to packaging and delivery.
You want your customers or prospective ones to feel like they’re getting value for their money, but not just that. They should feel satisfied when they patronize you. Some of the ways to brand your handmade jewelry are:
- Good pictures are essential! If you are going to be using pictures for your product, then make sure it’s perfect. Whether you made them in your garage, in your workshop, it doesn’t affect the quality of your picture. With the help of technology, quality pictures don’t need expensive gadgets as you can take quality pictures with just your phone.
- Talk about your products. Your products should be no secret to the people around you. Regularly preach the word to the people around you till they feel like they’re missing out when they’re not patronizing you.
- Quality is everything. You should prioritize the quality of materials used in manufacturing your jewelry. There are some beneficial reasons such as your customers returning for more and the reach you get when their friends and other people see your products on them. It also helps significantly in building your brand name when it is undeniably associated with credibility.
- Utilize publicity platforms. Thanks to technology, as this is another avenue, it has helped make simple. With numerous social media platforms available and even more coming up, distance is no more a barrier. Different people from far and wide can now see your products and can purchase whichever they want. You need to regularly inform them of available products and let social media do the town crying.
Where to Sell Your Handmade Jewelry
On finally getting into the market, word of mouth awareness may not exactly give you the sales opportunity you need. Here are some platforms and also some methods through which you can easily sell off your handmade jewelry.
- eBay is a good option every day! With their free listing package for your first month of joining, you get to showcase your available products to a wide range of audiences. When the free trial period is over, you still get to showcase your products on the platform for a small fee. That’s not all. With their bid option, you get to see different prices people think your product is worth.
- Bonanza was made for you. It was made for your handmade products, and here is why. Not only does it allow you to list your items on their platform, but it also does it at no fee. It gets even better, as it remains that way and changes only when you finally make a sale. When your item sells, it charges you only 3.5% of the price of your product + shipping fee over $10. It’s always a win-win situation.
- Shopify is your friend if you need a platform that singles your store out amongst other stores. Their platform provides you with listings that allow for the creation of your website. They make available everything you need to ensure a smooth ride in owning your online space.
- Good old Social Media. The use of social media in this era cannot be overemphasized. Buying and selling is one thing that is also gaining from it. Friends and family can help you showcase your products to their friends, and the cycle keeps on going.
Setting prices for handmade jewelry may seem a difficult task. However, you must get it right. You want to set a price that is both profitable to you and fair to your customers. As much as you want to make profits, it is also vital you don’t overprice.
Appealing to customers is very important, but do not short-change yourself and your work to make them comfortable. Consider all possible factors and set a price that is comfortable and works for you.
As time goes on, you either cut or raise your price slightly and see the effect on sales and customer reaction.