How to Price Your Jewellery
As in any business what to charge the customer is a big issue. It is not an easy thing to do because you don’t want to be seen to be greedy and you also want to stay in business, therefore margins need to be realistic. Pricing is a very important factor to take into consideration because by charging too much, there is a good chance that you won’t have many sales. At the same time, by not charging enough, then it is highly likely that your tenure in business is not going to last very long at all.
So what is a fair price as regards jewellery? When I was younger, part of my business was to sell wholesale jewellery to shops as at that time the internet was not available to just the ordinary person on the street. It was only available to the governments of the world and even then it was limited due to size of equipment and not enough experience. Nowadays one would scoff at those memories, however, there are still many of us who have lived through the time when there was no mobile phone and no computer in the home. Heaven forbid you will be thinking – how on earth did you manage??? Well we did, just by you reading this chapter makes you realise that we did survive. Going back to my story of my jewellery business, it was known amongst us all that jewellers slapped 65% onto the price we sold to them. That is how people stayed in business way back then. They had good margins that helped them survive.
Today I am astounded to find that those margins have more than halved, which immediately sent me into panic mode for my business colleagues. One certainly has to be an astute business person to keep up with prices and the competition. That is probably why I have noticed the demise of many of my once upon a time friends from long ago and explains to me what probably happened to them when previous to writing this chapter I had not given that reason a thought.
Today, there is a system that is followed by many in the jewellery profession whether the jewellery is purchased at a wholesale price and resold or just purchased and used purely for oneself. Wholesale prices in bulk give you greater leverage when on-selling. And on-selling means a generally accepted markup to both seller and buyer of around 15% to 30%. Things have certainly changed with the advent of huge discounts in the jewellery world to what I was used to.
So long as the customer is happy then you have to accept being happy yourself as the seller. The regular price of jewellery should be seen as wholesale which is 15% + 30%. A sale price should be seen as wholesale +15%. That would give you a good guide when it comes to thinking about what to charge for the pieces you make for your own jewellery business.
When one makes their own jewellery, there are many cost factors that have to come into play before deciding on the end price to the customer. There is the cost of each item that goes into the makeup of each piece. There is the shipping to take into account, remembering that every country has their own rules and costs for shipping at many different delivery levels. There is the storage of same products if you have a huge business. And even if you have a business from home, then you need space to store your business, including the shelving or boxes they are contained in. All of these little costs need to be considered when costing out for the customer. Then of course, you have the packaging that they will be housed in for sending out e.g. their own presentation boxes as well as the envelopes or boxes that they will be sent through the mail system in. If you have someone helping you with the packing, then there are these handling costs that you need to factor in as well. Once you have all of those costs in hand and duly apportioned for each item on your catalogue, it is only then that you proceed to add the 15% or the 30% on top of that 15% depending on the status of the item you are selling.
Remember, that once you have the 15% markup added, then this becomes your wholesale price to your customer. And once you have the 30% markup added to the 15%, then this becomes the retail price to your customer. Ensure that you have a good profit margin then of 45% above your costs when selling anything at retail prices.
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