Welcome to the second of my series of behind the scenes blogs,
In this blog I am going to talk about pricing, this is one of the things that I find the hardest when creating your own products, I know anyone else that is a self employed maker will agree.
When pricing items you have to take in to account so many things, I have a spread sheet that everything gets put through to hep me determine my retail prices whilst still making a profit that my business can continue, below is a little list of what needs to be taken in to account:
- Materials – Metals, Gem Stones, Solder, Chains, findings.
- Tools – to make jewellery you need tools, you don’t have to go for brand new – some of my favourite tools are inherited or picked up at second hand stores and carbon sales but tools are some essentials that you cannot live without.
- Consumables – Saw Blade, Flux, Polishing mops, burrs, Polishing compound.
- Photography – Selling products online requires high quality imagery, you can do this yourself, I personally use a Canon 1300D and a light box to get clear true to life product shots, you need to buy the equipment, then theres your time shooting and editing the imagery f you do it yourself or if you are using a freelance photographer theres there fees for doing this for you. Lifestyle shots require models, I offer cash payment or payment in jewels to all my models as I will never ask people to work for free.
- Postage – Of materials coming in to the workshop and the items heading out to the customer.
- Packaging – Branded boxes, postage envelopes, Thank you cards.
- Hallmarking – required by law on any sterling silver items weighing over 7.78g and Gold items weighing over 1g sold in the UK.
- Advertising – Marketing, Photography.
- Fees – Etsy and Paypal both charge fees for transactions going through them as well as any other selling platform like shoplift etc etc.
- My Time – you wouldn’t work for less than minimum wage and definitely not for free for anyone else so why would you do so for yourself? I pay myself an hourly rate, I have a sales spreadsheet that every sale is entered on to and the time that item takes me to make each item. At the end of each month I pay myself a wage according to the items that have sold not the time that I have actually spent in the workshop, Why? because the business itself needs to be making money to survive not just me personally and as a small business this is the easiest way I could work myself a wage and the business to be getting it’s profits.
- Then there’s your premises, rates, electricity, water, website domains, and tools these I don’t work in to each item but it is something that comes out of the business accounts so profits need to be able to cover this as well as buying more materials for new products to be made from.
Maths and accounts are not my forte but that’s why I have my beloved spreadsheet, when I am browsing my suppliers for materials and gems it is always by my side working out if I can make a not only create something visually desirable but a viable and sellable product out of my finds.
A lot of above factors have to be taken in to account when creating a quote and is also the reason why I take time to create quotes rather than just emailing straight back or giving prices off the top of my head, everything gets processed through the spreadsheet then broken down on the quote document as a visual reference point for both you and me.
Silver prices fluctuate slightly thought out the year and I regularly check metal prices to make sure that I am not over or under changing for items and amend the website accordingly, Gold fluctuates a lot more and for this reason I offer Gold mainly on request as I quote from live gold prices and will honour a quoted price for 30 days.
There are going to be some new gold pieces featuring on the website very soon and their prices will be assessed every 3 months to allow for this fluctuating market as I always want to be bringing you the best prices I can.
Running your own business if you have never done it before may seem like like it will be easy breezy working for yourself setting your own schedule and whilst yes this is good and working towards your dream is the best feeling in the world it comes with a lot more work that you would ever put in to an “employed” job as you just would get paid enough, you have got to do it for the love for sure. For me the making is the fun bit but there is soo much more to master before releasing products for general sale. If you start off to cheap not making enough profits from your business to grow and have to raise your prices it can put people off if you start as you mean to go on you will gain the right customers for your product from the start.