Melissa Hyland of Make and Sell Jewellery discusses how to work out the best price for your designs
Working out the right price for your handmade jewellery is something that many new designers can struggle with. It is vital to ensure you don’t overcharge or sell yourself short. Here are some key points to consider before you add that price tag.
This is something that gets forgotten all-too often when pricing a piece. Your time is valuable, so work out how much you would need to earn from your jewellery making per hour to cover your living costs if it was your sole source of income. You should take into account how much time you’ve spent perfecting your skills, particularly if you use more advanced techniques such as silversmithing.
Cost of materials
Next, work out how much you have spent on the components used to make your jewellery. In addition, factor in the following:
- Wear and tear on your tools
- Whether you use heavy-duty equipment (such as a kiln), or rent studio or workbench space
- Any travel costs involved with the design process
- Public liability insurance (if applicable)
- Broadband costs
- Packaging expenses
Add it up
Now take your hourly rate and cost of materials and add them together, which will give you the cost of your piece. However, it doesn’t end there; you now need to work out what to add on top of that in order to make a profit as well as covering your costs.
Wholesale price: This is the minimum that you can charge for a piece without making a loss. To calculate this, take the cost, which you worked out above, and double it.
Retail price: When selling via shops or online marketplaces, you will need to work out the retail price, which is usually double the wholesale price. If selling to larger retailers however, you should mark up the wholesale price by 2.4 times in order to cover VAT.
Is the price right?
Now that you’ve worked out what you should charge, you now need to consider whether potential customers will be prepared to pay it. Once you’ve considered these points, you should be able to calculate a good price.
- Look at your design and ask yourself if you would spend that kind of money on it.
- Is it distinctive enough from what else is available?
- Is the workmanship of a high enough quality to look good and last a long time?
- Get an objective opinion from other people, either around you or online – what would they be willing to pay for it?
- Look at other designers in your market whose work is on a level with yours; are they charging more or less then you?
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