Pricing Handmade Jewelry
Finding the right price to sell your jewelry is hard for someone new to making it. Whether you’re a hobbyist or a budding professional, we all like to sell off the beautiful things that come off the workbench. It’s just a matter of hitting your stride in pricing.
So, ready to learn a little bit about how to price handmade jewelry? Let’s get to it!
The Usual Formula
There’s one formula you’ll see more than any other when people are talking about pricing jewelry. It’s pretty simple:
It’s a pretty solid formula. Especially if you’re a competent smith. Hourly estimates range from $10 to $50 per hour depending on the smith in question.
Many will leave the discussion there, it’s a mic drop sort of equation.
Unfortunately, I don’t think it pans out in reality for the majority of smiths. Especially those of us who are self-taught and still learning the ropes of silversmithing.
On the other hand, wholesale is usually about half that price.
Material costs can be easy or hard. You can do rough calculations, or you can sit down and price out every inch of wire and stone.
I recommend keeping close track of stone costs. It’s easy to mess up here, I’ve let pieces go for the above formula only to realize the stone cost 500% of what I figured in the calculation. There are a lot of them bouncing around the workshop after all.
Remember to include shipping costs when you’re calculating.
For instance, I use GemRockAuctions frequently. Especially for opals. Shipping is always a DHL courier which runs me $25, so I split the cost across the stones I buy and add it to what I paid directly for the stone. I minimize the added cost by purchasing more than one stone from a vendor at a time, most vendors will put them all in the same package.
Keep your stones in separate bags with your cost written on them. Otherwise… well, you end up in a situation where you have a lot of stones and have to estimate the costs. I’m all for giving your customers a great deal… but not accidentally.
Metal prices fluctuate daily. You can estimate with silver and copper, but always keep track of gold costs. Gold is volatile and if there’s a sudden spike in prices your pieces may be worth more as scrap than a completed piece… and there are definitely people who will take advantage of that.
I personally figure silver at $1 per gram and just don’t worry about copper. The latter doesn’t get used much in my shop, but I can buy a pound spool of wire for less than $20 in any configuration and it’s not worth keeping track of. It’d work out to less than 50 cents in most cases.
On that note, I charge such a high price for my silver because I’m usually the one melting, rolling, and drawing it except for smaller gauge wire. I roll the labor into that part of the pricing, rather than keeping track of labor cost for individual pieces of silver.
It’s also a good idea to weigh your silver before you add stones.
Let’s Talk About Labor Costs
Labor costs are essential to turning a profit, and you deserve to be compensated for your time.
That said, I’ve seen a lot of people get confused by sticking to the hard equation above. If you’re a newbie charging $10 per hour for your time, and it took you 12 hours to do what an experienced smith can do in 2… well, you’re going to hit a sticking point.
The equation is a suggestion to get you in the right ballpark, not a hard rule.
You don’t have to agree with me, but I honestly don’t think a new smith can charge market rates for “training.” Figure you’ll be making under minimum wage in labor for the first year for someone who’s working daily or near-daily without professional guidance.
Labor costs in a storefront usually start at $25, home shops are usually a bit cheaper since there’s less overhead if you’re not paying commercial rent. There’s a lot of wiggle room in there and if you’re doing production runs you can cut labor time down a lot.
Even newbies deserve compensation for their time. Don’t get me wrong on that, but a lot of compensation also comes in the training you’re getting. You just have to be realistic.
I’ve seen newbies confused about pricing pieces because they realize the math doesn’t work out. 20 hours of wire weaving… doesn’t necessarily translate to a $200 piece even with material costs removed.
It takes me around thirty minutes to make a modest-sized bezel, solder it to the backplate, and clean up the outside edge enough to keep working. My first bezel took me about eight hours start to finish.
So, as a newbie, you can end up with very bad pricing if you take the formula literally.
If the price seems astronomical… adjust it. It’s great for people to be encouraging and all, but you still need to be grounded in reality.
On the same note don’t undercut other artists. Once in a while, a hobbyist with enough talent to draw attention wanders into the arena selling everything at barely over material costs… and that hurts everyone in the community.
The rest of us have overhead, and the person is going to change their tune very quickly if they try to open a business.
This brings me to my next point.
How Does Quality Affect Pricing?
We’ve been talking about materials and labor so far. Those both affect most of the pricing you’ll see, especially with smaller shops and unknown artists.
It’s a fair pricing method, and it works. But sooner or later, the quality of your workmanship is going to increase to a superior level.
The difference between a $500 silver ring and a $200 one made with the same materials is pretty simple: if it’s perfect you can charge a premium. No solder joints visible, no fudging to make things work, just a perfect ring in the same style will more than double the price.
Building up a reputation and a backlog of customers will also allow you to increase your prices. People pay a premium for pieces from an artist they admire. I’ve seen single-person shops that have to increase their price because of their backlog.
Once you’ve reached a certain level, you’ll be able to do the same.
Until then, however, it’s really up to the customer to decide if they want to pay or not. I advise not getting a big head because a few pricey pieces sold, the kind of reputation that sells takes years to develop.
It’s Really Up to You
I’ve kept a couple of items in my shop intentionally priced high because I’d rather keep them. I regularly price things without considering labor. Most pieces in the same line, for instance, stay similar in price even if one took three times as long.
I use the, “Eh, it’s worth…” method in… probably 90% of my pricing.
I consider triple material costs as the bottom floor for retail sales.
That amount, coincidentally, is exactly what I try to reinvest in materials and tools after selling a piece. Over that, I consider the money profit.
But I also work from home. My office and workshop are the same things for all intents and purposes. I actually don’t even count labor hours unless I’m doing a custom.
But I don’t have to devote my precious free time at home to it either.
On the other hand, my partner has to leave to go to work and doesn’t have that same luxury. As a result, labor is carefully calculated on her pieces.
You’ll find a system that works for you. There isn’t a one-size-fits-all pricing solution, unfortunately. The equation above is about as close as you’ll get.
My advice for newbies on pricing is simple:
- Never go under 3x materials- It’s not worth it. If the piece won’t sell and you don’t want it, then scrap it and reuse the metal and gems.
- Be realistic- Your labor is worth compensation, but as a newbie, you should also consider your “self-training” as part of what you’re getting.
- Never undercut to make sales- Not only does it hurt the artisan community, but it also makes your pieces look “cheap” and can even hurt sales. People assume real metals and stones cost a lot of money, so they’ll wonder why you’re selling so low.
- Watch the metals market- APMEX is a must-have for anyone working with precious metals. Price your pieces based on current prices if the cost has gone up since purchase. Never price downwards, or you’ll end up costing yourself money.
With those guidelines, you’ll soon find yourself confident about selling. Good luck to you on your journey!