Introduction
Once I Came Up With a Price For This type of Earrings I stuck With It and Saved Time
Lots of new and experienced sellers wonder about pricing their work. In theory the goal is to find a price that is fair and will sell. The odd thing is sometimes it is easier to sell something at higher price then at a lower price. Even then in the handmade world many times price is not as big of factor because if someone were looking for something for cheaper they would buy it from Wal-Mart. So what should a seller do? In general I believe that most new sellers under price their work and should raise their prices.
Every jeweler comes up with a different method and tailoring one to your needs is a good idea. A few years ago I created a formula to help me price my jewelry. Now this formula should not be followed blindly. Even though it is a formula some parts are subjective like Mark Up.
The Formula
The formula I use to price my work is:
(Materials + Studio Fee + Time) (Mark Up) = Price
Materials: Total cost of materials like silver, stones, bezel, solder….
Studio Fee: Is how much it costs to run your studio, which can include many things. For example if you are renting a space to do your work then the rent should be one of the items in the studio fee. If it is your own space, like an area of your home, then part of your rent or property taxes should be included in the studio fee. The studio fee should cover the cost of chemicals, electricity, saw blades, heating and a portion of property taxes or rent in general. I usually add $5 to every piece as my studio fee. On lower costing items I might make it $1 or $2.
Time: I set a value to what my time is worth. Currently I value my time at $10 an hour for metal work.
Mark up: This is the hardest part, some say double your price after the above factors have been added together. For me it depends on the piece sometimes its a small amount sometimes its a big amount. In reality it is what ever I feel I can get for that piece. Many times my Mark Up will be around 1.5 or 1.7.
Example
Don't Forget the Cost of Stones in Pieces Especially Expensive Stones like Mawsitsit
Lets take a Sterling Silver Pendant that has 2 square inches of 18-gauge sterling silver sheet ($10), a turquoise cabochon ($15), bezel ($2), one 14-gauge sterling silver jump ring ($ 0.25) and solder ($ 0.10). Then this theoretical piece took me 2.5 hours ($25) to fabricate, not including additional time caused by making mistakes. Then there is the studio fee ($5). This brings us to the material cost of $27.35.
Now the mark up is the difficult part. This takes some serious examination of your piece and really judging how far you should push that amount. Lets says it’s a pretty piece of turquoise but not the best and the piece has pretty cool cut out on the backside. So I am thinking a 1.5 mark up is the best way to go.
Materials = $27.35
Time= $25
Studio Fee = $5
Mark Up= 1.5
(27.35+25+5)(1.5)= $86.025
After The Equation
After looking at this $86.025 you have to sit back and think, “is this a good price?” Now I would first round it to $86 because dealing with fractions at art fairs or on Etsy can be annoying. Now if you plan to sell this on Etsy you might have to raise the price again if you want to include shipping. As I said before this is a starting point to move up or down from.
For this Piece I would raise the price to $90 and include shipping. Now if your selling at an art fair I would not lower the price because the included shipping cost is replaced by your table fee. Also you can always lower a price to a customer, never raise it. If you see someone on the edge of wanting to buy something you can always remove that $4.
Conclusion
Pricing work is hard. And giving something a bad price is always bad and it doesn’t matter if you make it to high or low. When it comes to pricing work the best thing to do is come up with a system and use it as a starting point. I made a piece a few weeks ago that if I followed the formula to the letter it would give me a much lower price then I know I can sell it for. Remember more expensive pieces take longer to sell and lowering the price might not actually speed it up much. Just keep showing it and eventually someone will come along and fall in love it and have to buy it.
Posted by Silver Drops Designs Blog
Hosted by Silver Drops Designs
