This blog is meant to be a record of my adventures as a new home-based business owner. Starting my jewellery business was one of the most daunting things I've ever done, next to giving birth. Especially since I was (am?) pretty technically stunted. In this blog I will describe the trials, tribulations and, hopefully, eventual successes I experience while navigating the world of (really, really, really small) business. I also plan to use this blog to talk about all the aspects of jewellery design that fascinate me, keep me addicted, and cause me to spend thousands of dollars (What, honey? No, I didn't say thousands...) on gemstones, beads, findings, etc. I welcome your input, ideas, and stories of similar experiences in beading, jewellery design, or running a handcrafts business.

Tuesday, September 14, 2010

The Eternal Question - What is My Stuff Worth?

When I first started selling my jewellery to friends, co-workers, and at a couple of small local legion craft sales, I used this formula for deciding what to charge for my work:  What would I pay for this?  The problem with this method of pricing is twofold. First, I'm extremely frugal (read cheap.) Secondly, I tend to undervalue my work and my time.  When I decided to register my business and really make a go of it, I began reading other jewellery designers' thoughts on the matter of pricing your work, and I began to realize that I was selling myself short.  I used to concern myself only with covering the cost of the materials, and maybe make a little bit of profit.  I didn't consider all the other costs of running a jewellery business, like marketing costs, website fees, packaging, shipping, displays, show fees, a tent for outdoor shows, tables, replacing and upgrading tools, computer software for accounting and tweaking photos, and classes for learning new skills.  If you're not pricing your stuff to cover these costs, and making a bit of profit on top of that, you're not going to be successful.

Rena Klingenberg, a very successful jewellery designer and online guru, suggests this formula:

Your pro-rated labor cost + the cost of materials, including packaging + (cost of materials x 4) + 10%  more for overhead = final retail sales price

She then suggests you adjust up or down, depending on the specialness of the finished product, and depending on your target market. 

I have provided a link to Rena's website on my blogroll.  Her website and her online book Ultimate Guide to Your Profitable Jewelery Booth are fantastic resources for the fledgling bead tycoon. 

The pricing formula I use now is more like the one Rena suggests, although not exactly.  When I go to craft fairs, I try to offer something for all budgets.  There are the more expensive, top-of-the-line gemstone necklaces, all the way down to a bargain basket of very simple earrings and last season's bracelets.  I also offer multiple purchase discounts.  I'm much better now at seeing the value of my work, but I still struggle with self-doubt from time to time. 

It's getting late, and I've got school tomorrow.  Maybe one day, I'll be able to quit my day job and concentrate on designing jewellery and running my empire, but I've got a long way to go yet.

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