How to price jewelry for online sales.
Have you been creating jewelry for a few months and received positive feedback on your designs? Maybe you’ve even had an offer from a friend to buy one of your pieces and it’s got you thinking about selling online? Great decision! A jewelry making side business is easier than ever to start with the help of marketplaces such as Etsy or Amazon Handmade. Artisanal jewelry is hot right now, so you could have just found yourself a very lucrative side hustle.
So where do you start? The process can be overwhelming, so we developed an easy to follow guide to selling and pricing your jewelry for online sales.
Don’t price too low
Pricing your pieces right is one of the most important parts of online sales. It will both speak to the quality of your product and determine whether or not your business can be profitable. One of the biggest mistakes we see is makers pricing their items too low thinking will have better success if they price their work cheap to start. Wrong! Potential customers will wonder if there are defects in the jewelry. It can also imply that you don’t value your work enough to charge a fair price.
Spend some time researching similar items and jewelry makers, it will give you a good idea of where to price your pieces. Etsy is oversaturated with jewelry but don’t get discouraged: with hard work and unique designs, you can carve out a niche for yourself!
Keep track of your expenses
We all do it – unexpectedly find ourselves shopping the sales racks and heading home with a bunch of random supplies. However, if you want to sell your jewelry and be profitable, you HAVE to keep track of your expenses.
Use a notebook to keep track of what you used and the quantity for each piece. We highly recommend keeping receipts (it will make it easier to keep track of costs and you can use them when calculating tax deductions). Be sure to calculate properly per piece if you buy in bulk. For example, if you paid $4.99 for 6 plated gold ear wires and you used two of them in your design, you would divide $4.99 by 6 = $0.83 x 2 = $1.66
If you haven’t yet, we recommend signing up for a wholesale account to get access to our wholesale pricing. Indeed, you should be purchasing supplies at bulk prices in order to be able to be more accurate in your design pricing. The more meticulous you are about calculating expenses, the better your pricing and profitability will be.had
Do not forget to include your operating expenses!
It’s easy to forget about the little expenses that come into play when operating a business – like packaging material, listing fees, shipping costs, tools and payment processing fees.These expenses are called your overhead costs. Overhead costs include any cost that isn’t directly related to your merchandise but are still necessary to run your business properly. The best thing you can do factor them into your plans and build their cost into your jewelry prices. You can purchase bulk such as our jewelry maker’s bundle in order to save on these expenses.
If you are just starting out and don’t really know what your operating expenses are, the general rule is to add another 10% of your supplies and labor.
Time is money.
Your time is valuable! Don’t forget to record the time you spend on each piece. This step can be easy to forget about (you’re not alone!) but is essential to price your jewelry. If it takes you 30 minutes to create a piece, you would want to price it differently than a piece that takes 2-3 hours to create.
To help with this step, we recommend using RescueTime, an app for your smartphone that can help you keep track of your time – but a good old watch, pen and notebook will do the trick too! You also must determine how much an hour of your time is worth. Our best advice? Be reasonable. Do not charge ridiculously high labor costs if you’re just starting out. You can use our template and see the example below to learn how you can calculate your labor cost. Click here
Let’s go through an example
To create this bracelet, we used:
- 100pc Metallic Green Round Beads
- Silver Findings Starter Pack
- Silver 28 Gauge Wire
1. Calculate Material Costs
To calculate the material cost, you need to figure out which supplies you used and how much of it. (Don’t worry if you hate math, you can download our free pricing calculator)
For example, 100pc Metallic Green Round Beads cost $3.99. However, there is 100 available on the pack and I only used 18 so:
$3.99/100 = 0.0399
Repeat this step for all of the materials used.
2. Don’t forget the labor cost
First thing you need to do is set your hourly rate, in this example, I am a beginner so I decided on $10/hour and it took me an hour to do this project.
$10 x 1 hour = $10
3.Calculate Total Cost
To calculate your total cost, You need to add your labor cost to your materials costs. (If you use our template, the calculator will figure out the total cost of your item)
$10 + $3.96 = $13.96
4. Adjust your markups
In order to get final price, you need to adjust your wholesale and retail markup. The common practice is to multiply your total cost by 2 to get your wholesale price (it will cover your overhead expenses and also give you a margin), then multiply your wholesale price by 2 to get your retail price.
$13.96 x 2 = $27.92 WHOLESALE PRICE
$27.92 x 2 = $55.83 RETAIL PRICE
5.Look at your competitors
You do not want to be overpriced or underpriced, so we recommend to take a look at the pricing for a similar product.
For example, we found a similar bracelet that is selling for $47.95 so we decided to adjust our retail price to $49.83 to be competitive. 😉👏
Bonus: Download our FREE and easy jewelry pricing calculator to figure out what the price your design should be without any math!