by Jesús Zabala - 3 min read

How to Price Handmade Jewelry

Creating jewelry designs and handcrafting beautiful jewelry pieces was just the beginning of our jewelry journey. As jewelers who work with handmade and custom jewelry, we put much effort and dedication into our unique handcrafted pieces. Taken together, we came to the part when we had to think about how to price handmade jewelry pieces.

Most jewelry designers use different “formulas” to price handmade jewelry, but we believe our methods will be an excellent example for you. Let’s have a look at them.

How to Price Handmade Jewelry

At JewelryLab we often get questions on how to price handmade jewelry. Years of experience have allowed us to learn that from keeping track of the costs and time to implementing different formulas to calculate the price while doing market research, there are many formulas to take into consideration.

Source: shutterstock.com / Photo Contributor: Anastasiya Bodrikova

Keep track of your costs

Start by working out your annual overheads. These costs include petrol, internet, insurance, fees, packing, marketing and much much more. Then consider your working costs. Note all the materials used for each of your designs. This could be any material type, from gold, sterling silver, and brass to beads and precious gems. You’d want to include the delivery costs here. Keep track of how much it costs you to deliver a piece of handmade jewelry. All of these tips will help you calculate the costs and profit margin.

Keep track of your time

Remember that keeping track of your time is an important part of keeping track of your costs. So, if you are a person enjoying the hobby of handcrafting jewelry or a small handmade jewelry business, you should include the time it takes for a single jewelry piece to be made. It could take you days to finish a piece. These are also referred to as labor costs.

Calculate the time spent on creating each jewelry piece. This includes the design, sourcing materials, assembling, and finishing. We believe assigning a reasonable hourly rate to hour labor is important.

Calculate the price

The basic formula is:

TIME + MATERIALS = COST.

COST x 2 = WHOLESALE

WHOLESALE x 2 = RETAIL

This formula may work pretty well, but it does not include the “other expenses” like marketing material, packaging, and your studio. Keep in mind that the tools and equipment needed for handcrafting jewelry are important expenses that must be considered in your formula.

So, instead of calculating only time and material, we should add the expenses as well. Charge what you think works best for you, but don’t forget your bills, rent, ongoing supply costs, etc. Briefly, the new formula that will help you a precise price for your jewelry will be:

TIME + MATERIALS + EXPENSES = COST

The wholesale and retail formulas are the same.

Make market research

We consider this step very important. Before putting our jewelry pieces on the website and adding their cost, we always research our competitors to see their prices.

If you are just starting out, researching competitors is a great way to see if you are under-pricing or overpricing. Yet, never go under your cost price, or you’ll end up working at a loss. This market research aims to keep your costs within the reasonable range of what is already on the market.

Evaluating our past sales helps us discover what worked and what did not. Asking a colleague or a friend to estimate your piece may be helpful, as they can show your strengths and weaknesses from their perspective better than you can see them.

Source: shutterstock.com / Photo Contributor: FXQuadro

Pricing updates

Over time, we review and update our prices because the standard changes, so we have to keep up. So, once you consider the price of materials and the overhead expenses, we advise you to adjust your prices accordingly to ensure you still make a profit while offering fair and competitive prices.

Conclusion

You need to learn many things when you start a jewelry business, including how to price handmade jewelry. The point of correctly pricing jewelry is to cover the costs involved in the production and your time and expertise.

Adopting these practices is crucial to pricing your jewelry appropriately. Remember to keep track of your costs and time, do market research, and update pricing when needed.