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How to Price Your Handmade Jewelry

By Cindy Bergman..Arlington Gem and Mineral Club

As an appraiser of jewelry and gemstones, I am called upon daily to analyze the values of a wide range of items, for an unending variety of reasons. I thought it would be helpful to know how the process works, as an aid for establishing value for their own jewelry. Whenever anyone asks me to tell them "What's this worth?"-if only there were a "one-size fits all" value, my life would be much simpler. The market place is a wide and varied forum for the buying and selling of goods--many things can affect the value.

Example-imagine a beautifully crafted silver piece set with a rare stone - displayed in a velvet box in a gallery where the staff is trained in selling -upscale clientele - statement of replacement for insurance purposes - repair promised if ever needed, etc. Sale price around $500 or more. Now imagine this same piece in a garage sale, scratched and tarnished-in a box with an eggbeater and some old bowling shoes. Would you pay one or two dollars for it?

These are two widely different markets, and two common markets where jewelry is sold at retail. Retail is simply a descriptive term used to describe an item sold to the end consumer-not for resale. Retail is not a price! In the first example, the retail price is influenced by added value-prestige, box, warranty, staff influence, and in the second the value has been diluted and is selling far below the intrinsic value of the materials.

For most of us, pricing our jewelry will fall below these two extremes. When pricing think first of a retail transaction. Think: added value. There are no formulas.

Go shopping with a notebook - record retail prices you see on jewelry. Write down prices and all your observations and collect data. This gives you an important for the market-what sells where and for what price. As you look at the jewelry ask yourself how it differs from your creations-quality? heavier gauge? One of a kind or production? What kind of guarantee can you offer?

What is your unique vision worth? You have invested in the raw material and your time and talent, equipment and education-advertising, etc. The moment of truth arrives. One of your acquaintances admires what you are wearing. "You made that!! Can you make me one too? How much???" You tell her the price-you tell her how reasonable for handmade work and all the time and expense, as she gasps. But whatever you do don't waffle and cut the price. Your work is worth every penny you're asking. Be creative if you have to-- ("OK, $50 cash and 20 jars of home made strawberry jam"), but don't sell yourself short.

There are other types of transactions. I f someone wants to order several of an item, use a discount with discretion. Remember, she is the end consumer of your product and as such she is the highest level of the market for you, That is terrific! But suppose she offers instead to sell your work on a wholesale basis or offer your work on consignment.

A wholesale transaction is simply a purchase made for resale. It is not a price! What is confusing is that wholesale prices are generally less than retail prices but NOT ALWAYS! The advantage of selling wholesale is twofold. First, your wholesale customer buys a larger dollar amount or quantity of item to qualify for the substantial price reduction (usually half or more than the retail price). Second, an ongoing and mutually profitable relationship frees you to make more jewelry instead of interfacing with the public.

If you choose to do consignments, find the middle ground between your wholesale and retail price. Leave room for the consignor to make some money, but let them know they will get a better price if they purchase out right from you. Have your price structure prepared in advance. There are more risks for you in a consignment sale. Get everything in writing! State clearly what your terms are and that the receipt is NOT a bill of sale. Ask for references if you are not sure. Consignment may be a good way to "test the waters" to see how well your jewelry sells in that venue, and what retail prices can be supported.

One more thing-You are probably wondering how to price your jewelry to friend, family and fellow club members. Using your established price, you can always give a "professional courtesy" or "friends and family" discount, but don't call it wholesale.

( Excerpted from an article appearing in the Rockhound Gazette 3/02 –Osage Hills Gems 4/02)