Dear Design Doctor
My query is how to price my silver pieces of jewellery correctly. Most of my pendants are made using silver clay, but my bangles and rings are made from sterling silver. Any advice would be greatly appreciated.
Patricia van den Akker, Director of The Design Trust, answered this question as The Design Doctor in Crafts Magazine May – June 2015 (page 22) where it was titled ‘Making sure the price is right’.
‘Costing and pricing is a tricky subject for many designer makers, especially when starting out.
If you charge too much you won’t be making any sales, if you charge too little you won’t survive for long.
Others find it hard to know how to do the mathematics, or don’t like to put a price label on their creativity.
The first thing you need to work out is your cost price:
How much would it cost you to produce one of your pieces?
You will need to work out how much salary you would like and what your annual overheads are going to be (such as your studio space, marketing costs), and divide these two numbers by the amount of hours that you are going to be making work that you can sell.
For example: if you would like to earn say £15K, and your overheads are £7K then you will need to cover £22K.
As a new jeweller you need to aim to work 2 days/week and spend 2 days/week on marketing, so then you will have about 48 weeks x 2 days x 7 hours = 768 hours per year. Then you divide the £22K by 768h, which makes £28.65 per hour. If you then would spend 2hours making a piece, and the material costs would be £8 then your calculation will be 2 x £28.65 + £8 = £65.29 as your cost price.
(You can find here a detailed blog post on how to calculate your cost price in 7 steps).
You need to know what your cost price is as this is the financial foundation of your business.
Knowing what the factual costs are for your work will help you to price your work.
But pricing your jewellery is less of a mathematical exercise, and more like an art form!
I suggest that you start with some market research and find out what other jewellers ask for pieces that are similar to your own work.
When doing your research become aware of where you want to position yourself in the market place:
Do you want to make more affordable pieces, create jewellery to commemorate special moments, or create high-end one-off statement pieces?
Pricing your work is part of this story about where and how you position yourself and your work.
The price you ask for your work creates expectations from your clients, in combination with:
- your profile,
- the quality of your materials and skills,
- your presentation and branding (don’t forget your packaging!),
- and the customer care and experience you give.
Do you want to be the equivalent of a 2-star or 5-star hotel?
If you find that somebody else is able to charge much more than you then it’s a worthwhile exercise to research why they are able to charge so much more than you, and learn from those insights.
How to price your handmade jewellery for shops & galleries?
Secondly if you are thinking about selling to galleries and shops then you’ll need to become very aware of how commissions leverages your price. The general rule is to double your cost price (see above) to get your wholesale price (the price that a wholesaler will pay you), and they then add 200 – 300% commission.
You can find out more here about the different price terminology used by retailers and how these are calcluated.
If you are just starting out and only sell direct to your individual consumers then you probably would sell your piece of handmade jewellery for just under £100.
But when you start to wholesale then you need to sell a piece like that for £100 – £130 to a wholesaler, who then would charge between £250 – £390 to a client.
If you sell to both retailers and consumers then you would need to charge the same amount, but that could make you very expensive.
This is a very common issue for new jewellers, and you might have to focus firstly on selling directly through craft fairs and online sales before you can sell wholesale, or position yourself better or work out how you can spend less time on a piece and become more effective.
So far your pricing can depend on your costs, your positioning but also to where and how you sell …
But there is one more thing that is crucial in this mixture: confidence.
Many creatives undervalue themselves. Don’t want to charge too much because they love what they do.
But the problem is that if you don’t value yourself, then no client will value you either and will not give you the price you need to create a thriving business.
Start thinking about what you are really creating: lovely made jewellery to commemorate an 18 birthday or graduation, a handmade pendant with 3 names engraved in them given by a husband to his wife for the birth of their first child.
These are special moments, and your jewellery can play a key role in this.
Indeed be invaluable for your clients.
Think about THAT and you will be much more confident about pricing your work!
And as Doug Richard of the School for Creative Startups wisely said:
‘Nothing is either expensive or cheap, it’s either worth it or not.’
Make it worthwhile for you AND your clients.