Pricing Strategy for Your Jewellery Designs
There are full semester courses at top business schools devoted to the topic of pricing strategy and from the disastrous Netflix price increase a couple of years back, we know that pricing is a crucial element of business success. I’m often asked by jewellery designers how they should price their pieces. Whether you’re selling or transitioning from a retail operation to wholesaling to boutiques for the first time, pricing your jewellery is non-trivial and there are many factors to take into consideration. The two easiest factors to consider are the cost of your time and materials.
Cost of your time
This one is hard for many novice designers because they are happy to be designing and making jewellery, and they just want someone to buy it. After all, they reason, it is a labour of love. However, time is money and it is far better to give discounts later than not to price time properly. In pricing your jewellery production cost, you need to break the design time and production (actual fabrication) time and estimate its cost accordingly. Your price should make a markup on at least your fabrication time, even if you do not do so on your design time because you enjoyed the process and you are willing to do it for free. I will write more about this topic in an article in the weeks to come.
Cost of Components
You should always have a clear idea of the cost of the components that went into a jewellery piece and, with the few exception of well known designers, the cost of jewellery is mostly influenced by the cost of the materials. One of the biggest mistakes novice designers make in costing forgetting to price for defective or ill-matched beads. When I source stones and pearls for Stones And Findings, I look look at quality before price because it often costs more per usable pearl or bead even if you buy the clearance lots for junk prices. As a rule of thumb for pricing your jewellery, you should be able to double your component cost plus cover your time.
We’ll continue discussing pricing strategy next week, when we delve into marketing cost and perceived value.