The Price Is Right for Handcrafted Jewelry
© by Laura Lesan; all rights reserved
When it comes to pricing your handcrafted jewelry, there are a lot of different strategies you'll find out there on the Internet. As a jewelry artist myself, I decided to bring together a
few ideas related to understanding your costs, staying competitive, and
offering discounts.
Understanding Your Costs
Trying to figure out how to price your handcrafted items can feel like the most
challenging thing.
 Romance Necklace by Laura Lesan
"Am I charging too much for my jewelry? Am I selling it too
cheap and people think I make cheap jewelry when I actually don't but I am
just trying to be fair?"
These are normal questions that an artist is
challenged with all the time. But don't worry. Just think that business
schools devote entire semesters to this subject!
What you really find out is
that there is no exact formula to calculate the price. It's all subjective.
If
you're selling your jewelry as a business and not just as a hobby, the
first thing you need to do is understand your costs - and then, of course, cover
them. There are three types of costs that I will explain in more detail: direct
costs, indirect costs, and your time.
- Direct costs include packaging, materials used, any online fees that apply
if you have an online jewelry store, or any fees the local shop you're selling
through is charging.
- Indirect costs might include a machinery that you had to buy, or the rental
fee for accessing a dark room
- Your time is what you should consider next. Calculate how much time you
need to design and make a piece of jewelry. Decide how much you want to pay
yourself hourly (it should be more than the minimum wage in your state) and
multiply that by the time required to make the item.
Staying Competitive
After you understand your costs, the next step is to stay competitive in the
marketplace. Considering the fact that there are a multitude of artists
designing jewelry, this task might seem to you a little daunting.
It's very
important to spend time analyzing the competition. If you're selling online,
search for similar products and see how other artists have priced them. If the
next shop has a very similar item priced at half your price you might
definitely lose customers who do a lot of research.
If you're offering the
item at a much lower price than the competition, consider revising your price
accordingly.
 Mystere Bracelet by Laura Lesan
It is important to think about who you are competing with. Your
competitors may not be someone who is making something very similar, but someone
who is targeting the same customer. This way you can compare your pricing more
broadly.
Ask yourself the following questions to help you create your product
positioning and give your customer a reason to buy your product:
- Why should a customer buy my product instead of the other products out
there?
- How much does my customer think my product is worth?
- Is my product made of better materials?
- Does my product have more intricate work or design elements?
- What is my reputation in comparison to the other artists making similar
items?
Demand pricing is another aspect to consider in your efforts to stay
competitive. Sometimes this is described as the price "the market will bear" - which means exercising your ability to charge more for a product that is
seen as valuable or unique.
This can be challenging and may take some
experimentation on your part. Test an increase in price on one of your
products and track the progress.
Offering Discounts
Many people believe that discounting is a pricing concept, but it really is a
marketing concept.
When you think about discounting, you need to think how this
discount compares to other marketing opportunities like promoting your products
on your blog, offering free gifts, or purchasing ads in online and printed
media pieces. A discount is just another way to entice a customer to buy.
In
theory, a discount or sale promotion is intended to be all about action or an
immediate sale.
Discounts are mostly used in four situations.
One of them is to induce trial.
If you are introducing a new product or you are entering a new marketplace, one
way to entice customers to try your product is to have an introductory price or
a limited time discount.
Another situation is when you want to encourage
additional sales. This type of discount is when you lower the price for an
additional item like, "buy one get the second one half off."
Discounts also
work in supporting volume sales. You can encourage other resellers to stock
your products.
Last but not least, you can use discounts to reward your top
customers.
Here are a few ways you can implement your discounting strategy:
- Direct price discounting - offer a discount to the normal selling price
- Free shipping - if you sell online, offer your customers free shipping
- Offer Coupons - add a coupon in the shipping package to encourage repeat
buying, or include a coupon in a promotional item
- Gift with Purchase - this is not just for the makeup industry. Sometimes
referred to as "premium promotion", this is when you include a freebie with
your customers purchase.
 Darling Hearts Earrings by Laura Lesan
Now that you understand your costs, you've learned how to stay competitive, and
you're ready to offer discounts, your business is up to speed and prepared for
the holiday shopping spree.
Remember to always be truthful about your products
and keep your customers happy.
Author Laura Lesan of Elle Custom Jewelry makes unique custom handcrafted jewelry using trendy
design ideas. Your custom designed jewelry can be made using gemstones, pearls,
sterling silver, copper, and more using a variety of jewelry making techniques. Laura says, "If you can't find what you're looking for in our online handcrafted jewelry
store, contact us and tell a designer what is your idea for the perfect
handcrafted jewelry piece. We will make it for you using any gemstones,
including your own. Think of the possibilities!"
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