Artisan Jewelry Business Tips Pricing
Sherman Oaks, CA 91423
Business Tips for Jewelry Designers
A number of emerging designers we work with ask us how to price their jewelry. Some ask No Roses Jewelry staff in our Los Angeles shop to decide what the retail price should be. Our challenge is that the artist him/herself often doesn't know the cost of their own materials or even how much time they spent on production.
Knowing both the wholesale and retail price of your jewelry when you approach a gallery or shop with your work for consideration is a major advantage in gaining credibility with stockists.
At the end of the day, that’s really your job as a jewelry design studio - not your retail partner's. SO…. No Roses would like to offer these tips to jewelry artists who show their line to potential retail stockists and galleries.
Step 1: Determine your MATERIALS COST
Keep a “recipe”, including quantity, dimension, weight and price, of all the materials (yes, every single piece) you use to create a particular piece of jewelry.
Step 2: Determine your TIME COST.
Keep track of the time spent shopping for, designing and producing a piece of jewelry. “Pay yourself” the standard rate you’d pay a qualified assistant to do the same work. It’s lower than you think - anywhere from $10 to $30 an hour, depending on how complicated the design and fabrication.
Step 3: Calculate the WHOLESALE PRICE.
Pretty simple, really. The common formula is (MATERIALS COST + TIME COST) X 2 = WHOLESALE PRICE.
Step 4: Establish an MSRP (Manufacturer’s Suggested Retail Price.)
Again, easy! The typical formula is WHOLESALE PRICE * 2.5 = RETAIL PRICE. This is a minimum pricing strategy. The retailer may choose to price higher depending on market value or other factors. Since your relationship with your stockist is a collaborative one, do discuss this number and help them arrive at the best price for clients.
Some stockists will ask for your wholesale price, some will want to know your MSRP. Have both numbers ready for every single piece of jewelry you make, and you’re good to go.
Step 5: Evaluation: Think carefully about the resulting retail price.
If you look at your final retail price and say “WOW!! That retail price seems way too high!” then you probably need to re-think your materials and/or fabrication method(s).
Sometimes you put so much work into something simple like a jump ring or a simple toggle clasp. Sure it's handcrafted, but will the average consumer really notice or care? If you want to get credit for your work and increase likelihood of a sale, make sure all parts of your design clearly stand out from components that are manufactured or mass produced.
The magic of retail pricing is to know what the competitive market can bear - to find a balance between what the customer perceives as value for their dollars and what it takes for you to get it there.
Sure, it can be painful to reconsider your beautiful design based largely on final retail price, but you have to ask yourself two questions: Do I want my work to sell? and Do I want to make a profit?
Also, if you're selling direct to the public - please consider selling only at a RETAIL price point (at least 2X wholesale), and not under-cutting your retailers. In this way, you maintain the value of your work both at retail and any direct-to-consumer shows AND you maintain your relationship with your stockists who market and promote your fabulous designs.
Summing it up.
Why is all this important? No Roses and other retailers love supporting and promoting emerging artists - many who are still learning the business of being jewelry designers. Making jewelry is a great joy and staying in business for the long term is even more wonderful.
Face it: If you go out of business because you don’t know how to make a PROFIT (translation - afford to pay the rent, keep the lights on, buy more materials, maybe even quit your day job!), your retail partners can't continue selling your fab designs to clients. Now that's a SERIOUS bummer.
Remember that the joy of being a design studio is embracing ALL aspects of the business - even spreadsheets. Yes, we're serious about the business of creativity. Are you?