Jewelry is one of the most popular gifts that people give during the holiday season. It can represent the love that family members, friends, and couples feel for each other. The vast selection available out there means that there is the perfect piece of jewelry for every personality, so gifts of jewelry can feel very personal and thoughtful.
Statistics show that during the holiday season, jewelry sales can be more than double what they are throughout the rest of the year. If you run a jewelry business, this will potentially be a very rewarding time for you. However, some preparations are in order as well. Make sure to maximize your success this holiday season by pricing your jewelry suitably. Read on to learn more about how to price your jewelry this holiday season.
How to Price Jewelry
In order to maintain a business selling your jewelry, you must try to find the best pricing for your pieces. High prices will turn away customers, but if your prices are too low, then you will be rewarded inadequately for your work and may even be operating at a loss. What’s more, you may struggle to find customers because buyers will doubt the quality of your jewelry. Jewelry tends to be a luxury item, so it can lose value in the eyes of buyers when priced too low.
Knowing all of that, how can you determine a suitable price for your jewelry? Many experienced jewelry sellers rely on formulas that takes into account variables such as supplies, labor (your time), and overhead, as well as how much profit the seller would like to make. One such formula is can help you decide how to price your own jewelry:
Breaking Even
When pricing jewelry using a formula, add the following variables together to break even:
- The cost of your materials. Keep all of your receipts and record the materials you use in each piece. If you only use some of them, then only add in a fraction of that to your calculations. For example, if you buy 20 beads for $2 and use 10 of them, you used $1 worth of beads for this piece. When you shop for materials, make sure to buy them in bulk or wholesale whenever possible for the best prices.
- Overhead costs. These are the costs of all the tools and other expenses that you continue using over time. The revenue you make from each piece should cover a small portion of the cost of the tools you are using. This variable is harder to calculate when deciding how to price jewelry, so you may have to estimate.
- Labor is an important variable that some independent designers forget about, but it is a very important one, because you, and those working with you, should be paid for your labor. Judging by your level of expertise, decide on an hourly “wage” for yourself, and multiply that by the hours you spend on each piece to include in the price. A good starting “wage” would be about $15 an hour.
- Packing, shipping, and any other variables that may be unique to your project.
Making a Profit
By adding together all of these variables, you can figure out a cost that will allow you to break even. When deciding how to price your jewelry, you should also add on a profit margin, which differs from your personal wages, so you can invest it back to your business entity for future supplies and developments.
Many jewelry designers add on 20% to the sum of the above variables as their profit margin when selling wholesale. When selling retail, a good guideline is to multiply your wholesale cost by 1.4 – 2. You may need to do some trial-and-error to find the profit margin that works for your business, but these guidelines are a good place to start.
Adapting the Formula to the Holidays
Even if you have already figured out how to price your jewelry using a set formula, the holiday season presents some opportunities for adjustment.
Note that increasing your prices after your products have already been selling for a while may negatively affect your sales, so only make these adjustments if you do not yet have a stable customer base, or if you are introducing new products.
Labor Cost
In many retail industries, employees earn more per hour when they work on and around holidays. If you will be personally making and selling your jewelry products this holiday season, then factor in the time and energy you will spend doing that to the “labor cost” part of the formula. Do not disregard the trade-offs you are making by working during the holiday season when you decide how to price your jewelry.
Profit Margin
During the holidays, the majority of your sales will be to people who intend to give the piece of jewelry as a gift. In general, customers are willing to spend more money on a gift than on something for themselves. What’s more, customers may even prefer to gift someone a more expensive piece because to a certain extent, the monetary value of a gift correlates to respect for the recipient.
When the holiday season ends, you may want to decrease your prices to adjust for non-holiday sales. You could even keep some of the prices constant for your more popular pieces!
Diversify Your Price Levels
The drastic increase in jewelry sales during the holiday season makes it a crucial time for your business for both branding and sales. When deciding how to price jewelry, make sure to optimize your prices for all customers that you want to attract. Many retailers succeed in doing so by offering two price ranges of jewelry: one high, and one more mid-priced. This way, they can attract customers with a range of budgets.
If you normally specialize in luxury precious metal jewelry, then you may bring in higher profits by offering a more minimal, mid-priced collection this holiday season. If your fashionable, bohemian collection is your calling card but you are thinking about trying out some luxury pieces, then the holiday season would be an ideal time to do it.
Are Sales a Good Idea?
The issue of holiday sales may complicate your process for deciding how to price your jewelry. For most industries, the holiday season means big sales. Luxury industries are a gray area, though, because the desirability of a product can decrease if its price is always changing.
To decide whether you should put your creations on sale or not, take the branding of your company into consideration. If you want your brand to appear ultra luxurious and covetable, then avoid sales and stick instead to holiday marketing to boost your sales. If your brand is more casual, then go ahead and put on a sale.
One way to compromise would be to place a select collection or collections on sale. Choose a more giftable, cheery collection that isn’t one of your classic collections, so that you can maintain the integrity of your brand, while also rewarding your existing customers and attracting new ones to your jewelry line.
Presentation Matters
Gift shopping can be a stressful experience, and if you plan on selling your jewelry at a physical location such as a kiosk or store, you will have to personally interact with many holiday shoppers. Customers will appreciate any efforts you make to simplify the shopping process for them. After deciding how to price your jewelry, use some of these tips to prepare those prices for presentation.
Include Sales Tax in the Price Tag
This will save your customers the need to mentally add the tax on, themselves. This will make a big difference, especially if your jewelry prices are on the higher side. After including tax on your price tag, prop up a sign reading “Tax included in price.”
Round Your Price to a Whole Number
For on-the-daily and luxury jewelry alike, consider rounding your price to a whole number, or even to the nearest tenth. This way, your prices look cleaner and customers who choose to pay in cash have an easier time.
Beyond Pricing…
There are so many ways for you to capitalize on the holiday gifting season. It is important to know how to price your jewelry, but there are other ways to prep your business for the season. This could be an ideal time to introduce a new collection, especially if it embodies the holiday spirit. You can also experiment by grouping different products together in a fun gift bundle – this could be a good way to sell some of your slower-selling products or to introduce new styles to your customers. Make your preparations wisely and watch your brand flourish!
If you’re thinking of creating a new line just in time for the holidays, reach out to MKM Jewelry to help you with design, manufacturing, and finishing. We can help bring your fashion and fine jewelry ideas to life today!
Jewelry is one of the most popular gifts that people give during the holiday season. It can represent the love that family members, friends, and couples feel for each other. The vast selection available out there means that there is the perfect piece of jewelry for every personality, so gifts of jewelry can feel very personal and thoughtful.
Statistics show that during the holiday season, jewelry sales can be more than double what they are throughout the rest of the year. If you run a jewelry business, this will potentially be a very rewarding time for you. However, some preparations are in order as well. Make sure to maximize your success this holiday season by pricing your jewelry suitably. Read on to learn more about how to price your jewelry this holiday season.
How to Price Jewelry
In order to maintain a business selling your jewelry, you must try to find the best pricing for your pieces. High prices will turn away customers, but if your prices are too low, then you will be rewarded inadequately for your work and may even be operating at a loss. What’s more, you may struggle to find customers because buyers will doubt the quality of your jewelry. Jewelry tends to be a luxury item, so it can lose value in the eyes of buyers when priced too low.
Knowing all of that, how can you determine a suitable price for your jewelry? Many experienced jewelry sellers rely on formulas that takes into account variables such as supplies, labor (your time), and overhead, as well as how much profit the seller would like to make. One such formula is can help you decide how to price your own jewelry:
Breaking Even
When pricing jewelry using a formula, add the following variables together to break even:
- The cost of your materials. Keep all of your receipts and record the materials you use in each piece. If you only use some of them, then only add in a fraction of that to your calculations. For example, if you buy 20 beads for $2 and use 10 of them, you used $1 worth of beads for this piece. When you shop for materials, make sure to buy them in bulk or wholesale whenever possible for the best prices.
- Overhead costs. These are the costs of all the tools and other expenses that you continue using over time. The revenue you make from each piece should cover a small portion of the cost of the tools you are using. This variable is harder to calculate when deciding how to price jewelry, so you may have to estimate.
- Labor is an important variable that some independent designers forget about, but it is a very important one, because you, and those working with you, should be paid for your labor. Judging by your level of expertise, decide on an hourly “wage” for yourself, and multiply that by the hours you spend on each piece to include in the price. A good starting “wage” would be about $15 an hour.
- Packing, shipping, and any other variables that may be unique to your project.
Making a Profit
By adding together all of these variables, you can figure out a cost that will allow you to break even. When deciding how to price your jewelry, you should also add on a profit margin, which differs from your personal wages, so you can invest it back to your business entity for future supplies and developments.
Many jewelry designers add on 20% to the sum of the above variables as their profit margin when selling wholesale. When selling retail, a good guideline is to multiply your wholesale cost by 1.4 – 2. You may need to do some trial-and-error to find the profit margin that works for your business, but these guidelines are a good place to start.
Adapting the Formula to the Holidays
Even if you have already figured out how to price your jewelry using a set formula, the holiday season presents some opportunities for adjustment.
Note that increasing your prices after your products have already been selling for a while may negatively affect your sales, so only make these adjustments if you do not yet have a stable customer base, or if you are introducing new products.
Labor Cost
In many retail industries, employees earn more per hour when they work on and around holidays. If you will be personally making and selling your jewelry products this holiday season, then factor in the time and energy you will spend doing that to the “labor cost” part of the formula. Do not disregard the trade-offs you are making by working during the holiday season when you decide how to price your jewelry.
Profit Margin
During the holidays, the majority of your sales will be to people who intend to give the piece of jewelry as a gift. In general, customers are willing to spend more money on a gift than on something for themselves. What’s more, customers may even prefer to gift someone a more expensive piece because to a certain extent, the monetary value of a gift correlates to respect for the recipient.
When the holiday season ends, you may want to decrease your prices to adjust for non-holiday sales. You could even keep some of the prices constant for your more popular pieces!
Diversify Your Price Levels
The drastic increase in jewelry sales during the holiday season makes it a crucial time for your business for both branding and sales. When deciding how to price jewelry, make sure to optimize your prices for all customers that you want to attract. Many retailers succeed in doing so by offering two price ranges of jewelry: one high, and one more mid-priced. This way, they can attract customers with a range of budgets.
If you normally specialize in luxury precious metal jewelry, then you may bring in higher profits by offering a more minimal, mid-priced collection this holiday season. If your fashionable, bohemian collection is your calling card but you are thinking about trying out some luxury pieces, then the holiday season would be an ideal time to do it.
Are Sales a Good Idea?
The issue of holiday sales may complicate your process for deciding how to price your jewelry. For most industries, the holiday season means big sales. Luxury industries are a gray area, though, because the desirability of a product can decrease if its price is always changing.
To decide whether you should put your creations on sale or not, take the branding of your company into consideration. If you want your brand to appear ultra luxurious and covetable, then avoid sales and stick instead to holiday marketing to boost your sales. If your brand is more casual, then go ahead and put on a sale.
One way to compromise would be to place a select collection or collections on sale. Choose a more giftable, cheery collection that isn’t one of your classic collections, so that you can maintain the integrity of your brand, while also rewarding your existing customers and attracting new ones to your jewelry line.
Presentation Matters
Gift shopping can be a stressful experience, and if you plan on selling your jewelry at a physical location such as a kiosk or store, you will have to personally interact with many holiday shoppers. Customers will appreciate any efforts you make to simplify the shopping process for them. After deciding how to price your jewelry, use some of these tips to prepare those prices for presentation.
Include Sales Tax in the Price Tag
This will save your customers the need to mentally add the tax on, themselves. This will make a big difference, especially if your jewelry prices are on the higher side. After including tax on your price tag, prop up a sign reading “Tax included in price.”
Round Your Price to a Whole Number
For on-the-daily and luxury jewelry alike, consider rounding your price to a whole number, or even to the nearest tenth. This way, your prices look cleaner and customers who choose to pay in cash have an easier time.
Beyond Pricing…
There are so many ways for you to capitalize on the holiday gifting season. It is important to know how to price your jewelry, but there are other ways to prep your business for the season. This could be an ideal time to introduce a new collection, especially if it embodies the holiday spirit. You can also experiment by grouping different products together in a fun gift bundle – this could be a good way to sell some of your slower-selling products or to introduce new styles to your customers. Make your preparations wisely and watch your brand flourish!
If you’re thinking of creating a new line just in time for the holidays, reach out to MKM Jewelry to help you with design, manufacturing, and finishing. We can help bring your fashion and fine jewelry ideas to life today!
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