I’ve always calculated the cost and pricing for my jewelry with pen and paper, by writing down all the components and lengths of wire used, figuring out the material cost and the amount of time it takes me to make a piece and then use some some common sense to get to the final price tag. I double or treble the cost value, add the time spent at my hourly rate and the tax and see what happens before deciding on the profit margin.
It’s always useful to know how much a necklace or a pair of earring costs in the area you sell your jewellery because that’s your direct competition. In my case I’ve found the problem is that a lot of people don’t appreciate the amount of work and time required to make a handmade piece of jewellery and they don’t understand why they should pay extra for it.
Actually, I’ve found the reverse is true. People just assume that it should be cheaper than the mass produced pieces they find in stores because a lot of crafts people work at home and don’t have to pay rent on a store, import the merchandise or pay wages to employees.
This makes it very difficult to price handmade goods fairly and I’m aware that many times I’m seriously underpricing my pieces. A lot of the pieces that take longer to make usually make no profit and many times I have to give up charging for the full amount it took to make the piece to get to a price that’s not deemed obscene by buyers. That is very often the case with necklaces. Since they take more materials and longer to make they are rarely profitable.
When it comes to selling my pieces at stores I have to go through the calculations again. Usually I can’t make it 50% less than retail price so I have to lower it as much as possible without losing too much money.
There are some pieces I know there’s absolutely no point to selling in stores because their 50% markup would make them so expensive it would be ridiculous to think someone would actually buy them at that price. Others do very well.
But in the end I didn’t have a simple way to calculate all this and it was always very time consuming, so I started looking for jewelry price calculators.
First I found one by Eni Oken that looked interesting but I didn’t really want something based on excel, I wasnted a more flexible database. As I kept looking I found a free version of a pricing software at beading-software.com. I tried it and it’s very complete but the free version doesn’t let you save more than one item of jewelry at a time. It is, however, a wonderful tool to help you define hourly rates and overhead costs.
As I was looking at this program I started to think that I could probably make something like that myself – not the rates and overhead calculation, but the jewelry pricing bit.
I have a database software called filemaker, that I’ve been using for years for invoices and such, and so I started designing the layout for a materials database. That was easy enough so I moved on to a jewelry pricing template. It took longer to make – all day, in fact – but I think I finally did it. I can add a photo of the piece, a list of all the materials used where each item is entered automatically from the materials database so I don’t have to keep writing the same thing over and over again, and then it calculates total cost, cost plus work minutes, wholesale price with a smaller margin and then retail price. I may still have to adjust the retail price at times if it goes too high but I can consider my wholesale price as the bottom value and go from there.
It was a bit of work but it was worth it. I guess I really am a DIY girl 😛
Last night I started the tedious job of entering materials into the database and I hope to start trying it out today in case there are still adjustments to be made.