Running a jewelry business means juggling many things. From creating designs, and marketing, to fulfilling orders, you will have to face each struggle. At the end of the day, to make sure your hard work leads to success, setting the right prices is essential. But why are pricing strategies so important for selling jewelry? How to figure out the best jewelry pricing formula? Below are some helpful tips for setting prices that will help you make a profit!
The Importance of Jewelry Pricing Formula
Pricing strategies are essential for any business. Well, jewelry stores are no different. A smart pricing strategy can help you set competitive prices. Even better, getting the right jewelry pricing also lets you earn more profits.
Moreover, the price of your jewelry can also affect how customers see the value of your jewelry. Accordingly, it impacts their buying decisions. Thus, having a well-thought-out pricing plan can be key to boosting sales. Ultimately, it can make your jewelry business more profitable.
How to Price Handmade Jewelry?
Pricing your handmade jewelry to make a profit is an important business strategy. This applies no matter if you run a full-time business or just make jewelry as a hobby. Even if you’re currently making jewelry for fun, you must price it in a way that covers costs and earns you a profit. By doing this, if you ever decide to turn your hobby into a business, you’re already set up for success.
Why Should You Focus on Your Jewelry’s Value?
People love handmade jewelry because of its uniqueness and authenticity. This is the main reason why you should always focus on your jewelry’s value. In fact, there are more valid reasons to do so!
Reflect Products’ Value
When you’re just starting to sell your handmade jewelry, you might feel unsure about charging high prices. Instead, you might focus mainly on covering your costs. However, if you don’t price your jewelry to make a profit, you’re undervaluing your own work. Remember, you are putting a lot of time and effort into making each piece. Hence, it’s important to price your jewelry in a way that reflects that value.
For a moment, let’s consider how people perceive a product’s value. Many times, if a product seems “cheap,” it can be seen as “low quality.” However, a product sold at a higher price is usually viewed as better quality. In fact, some people might consider that product as something special.
Handmade Jewelry Is a Special
If you price your jewelry pieces too low, you might accidentally make it harder for other jewelry designers who rely on their work to make a living. Keep in mind that handmade jewelry is special. In fact, each piece is one-of-a-kind and crafted with care by the designer. Accordingly, people love to buy handmade items because they appreciate their uniqueness. Yes, many people are willing to pay a fair price for handmade jewelry in sustainable jewelry packaging.
For example, let’s say you sell your handmade jewelry at low prices just to cover your cost. Here, the type of buyer you’ll be attracting is someone looking to get the best deal. Also, the buyer may not care about the amount of work that’s gone into making such a piece of jewelry.
On the other hand, buyers who will value your work may assume that your jewelry products aren’t handmade. Thus, you might not get your pricing strategy right to begin with.
So, How to Price Jewelry for Profits?
Yes, pricing your handmade jewelry for profits is important for the above reasons. But how should you decide what to charge? Do you need a jewelry price estimator? Jewelry Pricing Formula?
You can simply read the tips below!
When you make a handmade piece of jewelry, you must figure out both a wholesale price and a retail price for each item. Why?
Because both prices should cover your costs and include some profit.
Your wholesale price should be the lowest amount you can sell your jewelry for. At the same time, you should also make some profits.
For the methods, you can sell your jewelry in two ways: direct and indirect.
Indirect Selling
Indirect selling through other shops or boutiques is a common approach for many jewelry designers. In this method, you sell your jewelry to a shop at the wholesale price. Then, the shop sells it to customers at a higher retail price. Mostly, the shop owner might set the retail price themselves. Or else, they might ask you for suggestions. Hence, it is always good to have a price in mind.
Direct Selling
On the other hand, when you sell your jewelry directly, like on Etsy or at a craft stall, you can use the retail prices you’ve worked out. Of course, you can offer discounts but still make a profit. Well, this is where knowing your wholesale price—your lowest acceptable price—comes in handy.
Working Out to Price Your Handmade Jewelry for Profits
If you are searching for an accurate jewelry pricing calculator, there’s an easy formula you can use to work out the right price.
Materials + Overheads + Labor + % Profit = Wholesale Price + % Profit = Retail Price
While making any piece of jewelry, be sure that you remember the cost of all materials used. This includes not only the obvious items like beads. More than that, you should also remember other items you used, like beading thread and findings. Yes, these small items can be easy to overlook, especially if you have a large stock. Yet, they are still part of your material costs. To be as accurate as possible, you must find out how much does it cost to manufacture jewelry with every bead you use.
For example, let’s say that you buy a bag of 50 beads for $2.99 plus postage. So, you should include the postage cost in the total price of the beads. Then, divide that total by 50 to find the exact cost per bead. Also, you must add up the cost of the beads used in each piece of jewelry.
Understand the Overhead Costs
In addition, you must also consider your overhead costs might include things like a website, domain name, studio space, and Etsy fees. Well, these are the regular expenses needed to keep your business running. Plus, the labor cost is what you want to charge for the time you spend making your jewelry. The simplest way to calculate this is to decide on your hourly rate. Don’t forget to figure out how long it takes to make each piece. After all, you should not sell yourself short by working for free!
Ultimately, after you’ve considered the costs for materials, overheads, and labor for each piece of jewelry, you should add some profit. How much profit you want to get is completely up to you, but make sure to include it!
For example, let’s calculate how much does it costs to make earrings.
Here. you might want to charge 20% or 100% to reach a new figure. This will be your wholesale price – the lowest amount you will sell your earrings for.
Once you’ve set your wholesale price, you should add on more profit to reach a retail price that you’re happy with. Yet, don’t forget to consider the price, too.
How About Setting the Right Price for Gold?
How to make calculate making charges for gold?
Well, making charges are the costs involved in transforming raw gold into a piece of jewelry. This process includes the labor and craftsmanship you need to design and produce the jewelry. Most importantly, the purity of the gold also affects the making charges.
For example, if the gold is purer and more durable, it will be easier to shape into fine jewelry. On the other hand, more intricate designs require more time and skill. Thus, the making charges can vary depending on the complexity of your gold piece.
Adjusting Your Price and Still Making a Profit
When it comes to adding profit to the price of your jewelry, you might doubt whether it’s worth the money. But don’t worry as that is how exactly successful businesses operate; they always focus on profit!
However, if you’re concerned that people will not pay your prices, you can consider revisiting your designs. For example, you might be able to lower costs by simplifying the design, using less expensive materials, or buying supplies in bulk.
Also, you can pack your anlet jewelry items in affordably custom anklet boxes with logo. Don’t worry, you can get these boxes from professional suppliers, like Silver Edge Packaging. With small effort and creativity, you can reduce prices to meet demand, of course, while still making a profit.
While redesigning your jewelry, don’t forget to find out what your customers like about your jewelry. Try asking yourself if you can offer a similar product at a lower cost to yourself or your business.
Summing Up
No doubt, the right pricing always pays off. Whether you’re making jewelry as a small business or as a hobby, getting the pricing right from the start is essential. Hopefully, our guide above will help you set the best jewelry pricing formula that makes a profit!
