Pricing handmade jewellery

27 06 2012

I’ve been considering how to price my jewellery recently.

So the formula I’m using is:

  • Wholesale price =
    time * cost per time + materials cost + ‘fluff’ (contribution to overheads)
  • Retail price =
    wholesale price + gallery commission + GST

A quick note for buyers of handmade jewellery: if the wholesale price a maker needs to charge to break even is $315:

  • if commission is 30%, then retail price is $500 ($50 GST and $135 commission)
  • if commission is 50%, then retail price is $700 ($70 GST and $315 commission)

To an inexperienced eye the retail numbers may look quite high compare to the artist wholesale price – but there is a lot retail spaces and galleries do to support makers. This isn’t the focus of my post though …

What I do what to ask about is what makes a reasonable ‘hourly rate‘?

The minimum wage in Australia is $15.51 per hour (pre-tax; link); so that’s obviously the absolute minimum (especially considering someone working on the minimum wage is paid for every hour they work … and it’s most unlikely this is the case for makers).

Say a ring takes three hours to make entirely by hand (not cast and no pre-manufactured components etc), and materials cost $50, and say a nominal contribution to overheads (‘fluff’) is $20 per piece. So:

  • if hourly rate is $25, then wholesale is $145, and retail at 50% commission is $322
  • if hourly rate is $30, then wholesale is $160, and retail at 50% commission is $355
  • if hourly rate is $35, then wholesale is $175, and retail at 50% commission is $389
  • if hourly rate is $40, then wholesale is $190, and retail at 50% commission is $422

The differences here are not especially significant to the maker, though the $100 difference in retail price may be the difference between a buyer wanting to spend the money on that piece.

It becomes even more fraught for the maker if we consider the more complicated pieces that take many many hours of making; especially those made for exhibitions.

For example, I’ve just made a piece that took me over 15 hours of work. None of that time was wasted, it wasn’t exploratory or failed attempts (which one wouldn’t add to the time total anyway!) … it was all legitimate hard work using skills I’ve spent years learning and practicing. If I decided time cost was $25 per hour then the wholesale price would be $445 (as above, say materials are $50 and ‘fluff’ is $20 again) and the retail (at 50% commission) $989; if I decided time cost was $35 per hour, the wholesale price would be $595 and retail $1322. Big difference to a potential purchaser.

Surely a maker has a reasonable right to expect more than minimum wage yes?
Further, I’m pretty darn sure painters have a reasonable hourly wage yes?
My mowing man charges $50 for half an hour…

Even further, if we were to ask someone else to do this work for us, we’d need to pay them (we may do things for free for our work, but someone else won’t work for us for free!) – wouldn’t we expect to pay more than minimum for these skills?
If a maker is self-employed, there’s ‘superannuation’ and insurance etc. to consider.

I sometimes wonder if many makers undervalue their worth and price themselves too low….

Would you help me?
If you’re a contemporary jewellery maker, would you (anonymously) tell me approximately what you include in your wholesale prices as your ‘hourly rate’? As always, comments are more than welcome!


Update (3rd July): if you cannot see the survey here, it is likely to be showing in the updated post; actually, this wasn’t on purpose! this is my first time using polls, and it seems that if I copy it into another post it may actually move it if you happen to have both stories open at once (to prevent duplication issues I expect) … it’s still a mystery at this point.

PS. for beginners, a couple of interesting posts on pricing handmade objects and things to consider: here, here, here, here.

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Update (1st July): please do take some time to look at the comments on this post; it’s wonderful so many have taken time to contribute

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15 responses

27 06 2012
melissa

Like your mowing man, I charge a flat rate in my calculations, and like him one that’s been budgeted to include my studio costs and consumables etc. In my practice I feel that’s more precise, given that some works take weeks while others hours, and a flat rate for studio costs on the longer works wouldn’t make sense.

27 06 2012
Karen

Thank you Melissa – good point indeed. I think that’s way more sensible than the formula I’ve written in the post. For now though, while I’m only making a few pieces, I don’t think I can cover the studio rent yet; but as I increase my making (that’s the plan) then I’ll change to this approach. Again, thank you!!

27 06 2012
Jenny

Hi Karen, I’m a jewellery design student and we just covered this in one of our classes last week. Our teacher suggested hourly rate + materials cost + overheads (she works out an hourly overheads rate of $8ish for her practice) then multiply all this by a profit margin. This is your wholesale price. I calculated the price of one of my pieces using this method at a rate of $30 hr but a retail price seemed very high. Following this, I was talking to one of the jewellery trade teachers the other day and she said that trade jewellers aim to earn about $60 an hour. In my dreams…!

27 06 2012
Karen

thanks Jenny … $60 … wow-wee!!!
in my dreams too…

27 06 2012
kerry

great post, are you going to let us know what your poll results are?
I’m pricing like Melissa. It makes more sense for me to do it that way in my practice .

27 06 2012
Karen

thanks Kerry;
certainly plan to share poll results, as I think many will be interested;
I’ll wait for a week or so and see how many votes I get!

29 06 2012
Pricing jewellery … continued « Melbourne Jeweller

[…] to my previous post … a related issue is the inclusion of ‘manufactured’ versus […]

30 06 2012
Susan

Hi Karen,
This post broaches some really interesting and important issues that I often have conversations about with other jewellers.
Firstly, I would like to say that a $60 hourly rate for a trade trained or highly skilled jeweller is certainly a minimum, and I know of other jewellers who charge much more than this. I think it is important to be aware of your individual skill level within your discipline when it comes to your own hourly rate, and unfortunately it is all too common to undervalue yourself.
If what you are producing is the result of many hours of (unpaid!) training and research and blood and tears over a number of years then you have a right to consider your skill as a highly paid one. Look at what your mechanic, lawyer or photographer charges you an hour for their service? And what about your ‘sick pay’ or ‘annual leave’ if this is your full time job? These things must be considered also.
It is also my belief that a lot of the contemporary jewellery I see locally is extremely underpriced in comparison to those which I believe to be an appropriate amount. My ‘reverse guestimations’ calculate that at wholesale prices once the materials and setting or other costs are removed there is almost nothing or very little left to include the labour for the artist – I certainly know of a lot of artists who think “but I’m not quick enough or good enough to earn an hourly rate”. I worry that in doing so this not only doesn’t help the artist, but it also creates an imbalance for the rest of us who are trying to maintain a certain standard in the market.

30 06 2012
Karen

Thank you so much Susan for such a thoughtful comment.
The more I think of this, the more I wonder if I’ve also undervalued my own hourly rate … I too feel the pull of the ‘I’m not good enough’ argument sometimes, though in thinking seriously about what I would need to earn to make a fulltime living from making, I do wonder how other jewellers manage to pay themselves too (the same reverse calc you’ve mentioned).
I’m hoping to get more responses to my survey – though initial results indicate I may have needed more brackets above $40.

3 07 2012
Pricing jewellery – update « Melbourne Jeweller

[…] date the post has received lots of fabulous comments and many people have read it (at least according to my […]

5 07 2012
Roxanne

I really enjoyed and appreciated looking at this topic as well as reading your links in regards to other artists ideas on costing. I find pricing is a very difficult subject, as we all know how much time is involved and what we are worth but unfortunately it comes down to ” what will a buyer pay for this item ?” The general public does not understand the whole picture of the artists studio costs,design time,materials costs,gallery commissions and the hours of labour involved.
I think ultimately as an artist it all comes down to our love of making and somehow we manage to muddle though it all whether it be right or wrong.

5 07 2012
Karen

thank you Roxanne … I find it a fairly tricky subject too, which I why I wanted to write about it and seek others’ ideas

I’ve been wondering if the surprising lack of votes in the survey attached to my posts may be due to many makers not really having a stable ‘hourly rate’ for the reason you mention – that we are often ‘flexible’ on our pricing, keeping affordability in mind … perhaps I should have included ‘variable’ or ‘I don’t do it this way’ options in the survey…

11 07 2012
Pricing jewellery – another update « Melbourne Jeweller

[…] been a fortnight since I published the survey, and just over a week since the first […]

4 08 2012
hellkatdesigns

Hi Karen,

This was a really timely post for me to stumble on as i’m just about to start selling my own work and need to figure out my prices. It has been really interesting reading everything – your post, the comments, the links.

I’m so conscious of the general public not understanding the pricing of handmade work. It’s a constant battle I have in my social circles – my arty friends understand the justification, though most of my other networks can’t (“who would pay that much $ for that?”). It’s such a tricky subject, and after reading through the links especially, i’m more aware of the importance of sticking to your guns and setting the wholesale price at an appropriate level.

Now I just have to work out what that appropriate level is!

Cheers,
Kristen

8 03 2014
Michael

Hey, just stumbled on this in trying to work out what I should be getting paid. Interesting to read other peoples ideas on costings. I’ve been working in the jewellery industry for 13 years making high end one off pieces/ mass production/ repairs/ in fact almost anything, for a designer/Business in Adelaide. Too be honest, my hourly rate of pay at the bench appears quite low at $25Hour, however this is a flat rate of pay and your blog appears to deal with a designer maker type situations.

I would love to get a gauge on what is a reasonable rate of pay for a trade jeweller at the bench with the experience i have, but like you have mentioned, its not something you tend to ask other jewellers and the business side will definitely not fill you in on your true value untill you try to leave.

Cheers, Michael




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