Pricing your products for selling, either wholesale or full retail, is difficult at the best of times. Hopefully this first of a series of new tools available to GoJD members will help to remedy that situation and provide confidence to be able to price products correctly.
How to Price Your Handmade Jewellery; Using the tool: Click the ‘Use The Tool’ link above to open the app popup and start entering your details.
Add up all your materials and services costs; raw metal, stones, castings bought in, engraving costs, etc.
Enter your packaging costs and any postage that you may have incurred for sending the item out and having it returned for any services you may have used, or materials sent to you after being ordered in, for example, engraving and stones again.
You can optionally enter a markup here. A typical markup would be 50% (especially on metals. You wouldn’t usually buy metal in and sell it for the same price as you bought it once it’s been used on your product. This is a bonus but you can also think of it as an insurance policy to pay for mistakes or jobs that don’t go to plan! Hopefully, over a year you’re still in credit and haven’t had too many things go wrong!:-)
‘Materials Total’ is the sum of the above calculation.
The ‘Labour’ Section:
Self explanatory; how long did it take you? 30 minutes? Enter ‘0.5’
How much are you paying yourself /hour? Experience will count for this figure. If you’re a total newbie and things take longer for you than they would do if you were more experienced, then start low. The least you should work for is minimum wage but as you get more experience and faster, you could be working at around £25/hour – only you can decide this.
This is optional. For instance, if you have an employee/somebody else has made the item for you and their hourly rate is £25/hr, you would mark up the outwork as it’s no point charging the same as you pay out; you won’t make any money. Double up if you can, 100% is a reasonable figure for a labour mark up.
Self explanatory again; it’s the total labour from the calculation above!
A years worth of accounts can give you an accurate figure here so, if you can calculate the percentage from your previous accounts, enter it using the ‘Custom’ radio button selected. However as a rough guide without this figure, if you’re working from home in your back room or a converted/custom home workshop, chances are your overheads will be ‘Low’; if you rent a small unit, opt for ‘Medium’. Dedicated workshop/shop/factory? Opt for ‘High’. Chances are, if you opt for high overheads, you might have been in business for some time and can calculate an accurate figure from previous years accounts! 🙂
‘Recommended Prices’ Section
Wholesale price: This is your trade price figure.
Retail Price: This figure gives your public pricing with a markup of 120% added, click the VAT tickbox to add Value Added Tax if you’re registered.
Why a 120% markup and not 100%? This just gives you an extra little margin to be able to quote as ‘Free Shipping’ but it does depend on the overall value of your product.
The retail price figure is your minimum, only you can determine your market and the prices you can get for your work. You may be able to increase this figure quite comfortably. As you grow and become more experienced, faster and better known, you can increase your prices accordingly. 3 or 4 times markup on wholesale prices isn’t uncommon.
Please value your work because, if you don’t and it shows, your customers won’t value it either and some could be put off by a low pricing structure which can cost you sales!