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Your Jewelry Costs Estimated in 3 Easy StepsBead jewelry is a fun way to explore your creative talent but if you want to profit from it you’ll have to learn to price it correctly. Find here an easy 3-step method to determine the cost of your bead jewelry and other jewelry making creations. When pricing your jewelry the first part is to calculate the costs of your jewelry. The price of your jewelry should therefore make up for the costs of your supplies, overhead, time and experience. Here you’ll learn the first part of pricing your jewelry: calculating your costs. For how to set the price of your jewelry
go here.
Simple costing method for your jewelry
We’ll take this necklace I made months ago as an example to calculate its cost in a simple method. This method is for beginners or hobbyists. One thing is buying the supplies you need to make a necklace and another thing is using just bits of all that to actually make the necklace. It’s important for you to calculate the exact cost of your jewelry and not the whole bunch of supplies.
First Step: Knowing the cost of your suppliesWhat did you buy to make this necklace?You had this necklace design in mind for some days now, can’t wait to make it. While driving home you decide to stop at your favorite bead shop and buy all the supplies you need to make this necklace come true and deliver it to your customer. This is what you have in your shopping bag after paying:
Be sure to include every single item you’ll use to make your jewelry and then to package it, deliver it and even ship it. Include your presentation boxes, ribbons, tags, presentation cards, bags, shipping fees, etc. Now, you know that to make that necklace you’ll only use some beads from each strand, and you’ll use a bit of nymo thread from the whole spool, as well as a few seed beads from the pack. Second Step: Calculating the unitary costs of your necklaceBecause you use just a portion of the supplies you bought to make your necklace, the cost of the actual necklace will be different to the cost of your supplies.How do you calculate how many supplies (unitary cost) went into making the necklace? Before making it, you should calculate the cost of each bead. To read about what jewelry costs are, go here. I know it may sound boring but you only have to do this once for each item. You only have to count how many beads there’s in your chip strand once, because they are all standard in length so there will be the same amount of beads in every single chip strand you’ll ever buy (if you’re dealing with an honest supplier of course). It’s not that difficult. You can do it this way:
And you repeat this exercise for each item. Then, as soon as your jewelry is made, you can start counting the beads of your necklace and all the other supplies that you used in it (clasps, findings, etc) to come up with its cost. You end up having this chart for your unitary costs:
Third Step: Estimating the cost of your necklace
After doing step 1 and 2 you just have to count how many beads and supplies you finally used to finish your necklace. For our example we have that:
You can also start analyzing the costs of bead strands, maybe some beads are just too expensive and not easily marketable; maybe those exotic silver findings you loved so much are worth doing them yourself if they make your jewelry too costly. Now that you know exactly its cost; you then set up its price adding other criteria explained over in
this article about pricing your jewelry.
Moving your inventory to minimize expensesAs you can see from the calculation above, you bought US28,5 of supplies for making a necklace and you are left with some beads that have not been used (actually US$11,94 worth of supplies).Ideally, most of the time you should strive to use all your supplies (inventory) and sell it quickly. Inventories should “move” or rotate quickly. Why should you use your inventory quickly? Because this is like having your capital or money tied up without being used (dead costs) or some of it may (or may not) soon become out of fashion or “obsolete” (redundancy). A healthy business tries to reduce inventory and at the same time maximize product availability. I remember having a box full of beads for more than a year, using one here a couple there… think of the money I spent buying all those strands. Obviously at one time, I made loads of “ethnic” style necklaces and bracelets to use that entire inventory. But it took me a year to sell all of them… To use most of the beads bought for your necklace, you can make and sell a set instead of just a necklace. With the remaining beads you can make a bracelet and matching earrings for your necklace, use up all the supplies bought and profit more effectively and efficiently.
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