Does anyone LIKE to figure out how to price their work? If so, can you share your secret? I certainly don't enjoy trying to figure it out.
I think pricing is two parts subjection and one part fact. And it doesn't matter what kind of art or craft you create, pricing is just
hard!
For jewelry I've heard any number of formulas to use for pricing.
- Materials (X) 2
- Materials (X) 3 + Hourly Wage = Retail Price
- Materials (X) 2 (+) Hourly Wage = Wholesale Price
- Materials (X) 2 (+) Hourly Wage (X) 2 = Retail Price
- Materials (X) 3 (+) Overhead = Retail
And the list goes on. There are some people who severely undercut their work (and the work of others by pulling down the market price by only marking up materials (X) 2.
Think about all the different things that go into making high quality jewelry (or high quality anything)? There are tools, electricity, rent/mortgage for the house or office space you use, packaging, mailing, time spent on research, time spent marketing, gas to/from post office or errands...etc., etc., etc.
If you only mark up by two you are not covering all your costs. And if you are approached with a wholesale offer, can you cut your price in half and sell all your work at cost? Why in the world would you do that???
I admit, I started out pricing my work VERY low...too low. But my skills were also brand new - okay, I didn't have any skills. So when you're starting out maybe it's okay to price a little lower but you have to consider that as your skills do increase and your work gets better and better that increasing your prices may give your newfound customers some sticker shock. I know that some of mine have had wide eyed moments when looking at my newest work and updated prices.
But your work IS worth it! I cringe and get frustrated at craft shows when someone asks about a price and is *shocked* at how "high" it is. But is it really?
If I make a piece and the materials cost me $10, how much should that piece cost retail?
Well...if I only multiply materials by 2 that gets me $20. No chance for retail and no real profit when I factor in all the overhead.
If I multiply materials by 3 I'm getting a little better but if I want to sell it wholesale (at 50% which is standard) then I'm only marking up my piece by 0.5 ($10 *3 = $30 / 2 = $15 wholesale). That's only $5 over cost and definitely doesn't cover costs or an hourly wage.
If I multiply materials by 3 and add an hourly wage (we'll use $10 for this one and pretend it took me an hour) I get $40...still better than the first two, but again, think of it in retail and wholesale terms. Are you going to want to sell your piece for 50% retail at $20? That's pretty much the same as the first option and you won't cover your overhead costs.
What about (X) 2 (+) $10 wage we get $30 for a wholesale price. Take that (X) 2 and we get $60. I think that's a fair price. But if the piece is super simple or I don't feel that it can be sold for $60 I sometimes take off a few dollars or reduce my hourly wage. That's a judgement call.
This post could go on for pages! Just about the only static thing in this formula is your tangible cost for the materials. Everything else has to be calculated, weighed, judged, and determined individually.
Mind boggling!
