If you’ve started your business as a hobby, chances are good that you’re pricing by materials alone, with a bit added in for labor. It’s time to stop that practice right now if you’d like to make jewelry making your career rather than your hobby. But because you’re already most familiar with materials, of the four parts to a product price–materials, labor cost, overhead, and profit—let’s start there. These are the tangibles, such as metals, metal clay, stones, beads, glass, and fibers that are actually part of the jewelry you deliver to a customer and the part of the jewelry that customers appreciate.
But do you also consider findings? These are the things like stringing material, chain, clasps, jump rings, earring wires, pin backs, swivels, spacers, rivets, and grommets. You may not think much about these because you probably buy them in bulk and they cost only a few cents each. But over hundreds of pieces, those pennies add up. If you don’t include them in your pricing, they’ll cost you money.
Think about how you’re buying your materials, too. Are you buying sheets of metal or beads a few at time? If so, you’re paying top dollar for them. Always remain aware of bulk pricing, even if you don’t want to buy 1000 of one type of bead right now. That knowledge will come in hand as you begin to sell. It will be invaluable if you get a query from a catalog or department store.
Where are you buying your materials? It’s great to support a local craft shop, but only while you’re making jewelry as a hobby. If you buy from a retail shop close to you (or even online, if you don’t have one nearby), you are paying retail prices—even if you get a discount. That means you’re paying the store’s markup—and probably costs for packaging—in addition to the cost of the materials. If you’re truly starting a business, search out wholesalers for your materials: gemstone importers, metal suppliers, refiners, bead suppliers, findings houses. (You’ll need a resale license to buy from wholesalers.) These companies may have a minimum purchase requirement. (We’ll go into wholesale buying in the next few posts.)
When you’re designing a production line, always keep alternative materials in mind, too, and think about how your choice of materials will affect your labor costs. Can you add the color you want with half-drilled beads you can glue in place? With patinas? With enamels or powder coating? Can you use bronze or copper in place of silver? Can you use keum boo to add gold accents rather than working in gold? Can you have your designs cast in pewter rather than hand fabricating them?
“How much do you want to invest in terms of materials?” asks Portland, Oregon, jewelry artist Deborah Carus. “What is the current cost of metals? How much do you need to produce a number of pieces for the market? What kind of time will you spend on a piece? I’ve learned that if I don’t ask myself those questions, it can quickly escalate into something that’s not going to pay off.”
Keep good records of what you paid for materials and where you bought that particular stone, bead, chain, etc. For each piece of jewelry you create, make a list of everything that goes into it, including time, which we’ll discuss next. Always keep in mind that when you replace your materials in the future, they’ll probably cost more.
And while we’re on the topic of materials, let’s talk next about buying wholesale.