Pricing jewelry is perhaps one of the most confusing aspects of selling crafts.
By now you have a pretty good idea of what things cost. So much so that you can walk into any store and ascertain the cost of raw materials in making any necklace, bracelet, or earring.
But when you see a necklace that you could make for $10 being sold for $95, you scratch your head a little and wonder how a store can have the audacity to charge an 850% markup for a necklace you can bang out in less than half an hour!
Before we proceed any further with pricing your handmade goods, I need to ask you a question. Do you anticipate, or have the desire to sell to stores?
Im going to take a leap and guess that all of you said yes. One of the greatest advantages of selling to stores is that you dont have to go out there and sell your stuff, which means more time for you in your studio to do the things that you love to do: making more necklaces, earrings, bracelets, and rings! That being said, there are some things you need to consider when pricing handcrafted goods.
The average retailer who sells your artisanal goods will multiply your wholesale price by a factor of 2-2.5 to establish a retail price. Some stores, especially in bigger cities, will multiply your wholesale price by a factor of 4 or 5. Ive seen my necklaces and earrings sell for as much 10 times my wholesale price!
But before you all get too excited and suggest that I increase my wholesale prices, you really need to consider some of the factors that lead to such a high markup such as location, advertising, and promotional activities.
The store that sold my necklaces with 500-1000% markup happened to be located in the heart of North Beach, or the Italian district, in San Francisco. It had very high traffic for 16 hours per day, every day of the year, and although most people would consider the eclectic craft gallery a shoebox (about 500 sq. feet) the sales in that store were phenomenal simply because thousands of people walked by every day.
Rent for this store was not cheap, in the low 5 figure range, plus a percentage of monthly sales. The store had to sell a lot of everything just to pay rent, before they were even able to pay themselves and their staff or spend any money on advertising and more inventory!
Ultimately, what percentage markup a store chooses to take on your handcrafts is really of no concern to you, as you are not the one running the store nor are you responsible for putting up money for rent, inventory, advertising, and employees.
Your main concern should be taking care of yourself and your business. Work on your business pricing skills by setting a great wholesale price following my simple Wholesale Pricing Formula.
Once youve got got that down, you may proceed to the Pricing for Retail Sales section.
When you have read the wholesale pricing and retail pricing articles and would like to see examples of how pricing is done, make sure you visit the Jewelry Making Ideas section.
Each tutorial walks you through the design process, discusses techniques, teaches you how to make each piece, and concludes with both a wholesale pricing example and two retail pricing jewelry scenarios.