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Okay....we all hear about UNDER pricing, but....

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  • Okay....we all hear about UNDER pricing, but....

    Hi.
    Have debated long and hard whether to post this or not, but it's bugging me so I will try to explain.

    I am constantly being told me jewellery is too underpriced. My friends, family, colleagues, and even my customers at the craft fair all said the same thing.
    But I make a nice little profit on my work, I enjoy doing it, I cover my expenses and I'm left with a few quid in my pocket at the end of the day.

    I know there is the argument about underpricing, how it drives other handcrafted jewellery makers mad because is 'cheapens' the whole thing, so I try to strike a balance, but I am not prepared to rip people off when I know something has cost me £4 to make, I'm not going to charge £30 for it.

    Now I have just had a look at a website which had handcrafted jewellery on it, and I was looking at the prices. And I was stunned.
    The person in question has a lot of the EXACT same beads as me so I know where she sourced them and how much they are. Glass beads, nice, but nothing semi precious or anything like that. I actually have made a very very similar necklace myself in a different colour with the SAME beads. I know where she got them.
    She also used silver plated findings like me. I charge £13.50 for the set of necklace, bracelet and earrings.
    This set was priced at around £45.
    Necklaces that I charge £8 ish for are priced at between £40-£60.

    Now, I understand people want to make a profit but to me this is excessive in the extreme.
    Maybe it's true that by bumping up your prices you make your pieced somehow more 'desirable' - if it's expensive it MUST be worth it right?

    I am in no way trying to demean the work of these people but, knowing that the beads probably cost £5 MAX, is it really justifiable to charge £60?

    This is jewellery that is made relatively easily and quickly, not sitting for hours seed beading or wrapping loops or other technical things, I'm talking about strung beads. The same as I and a lot of other people do most of the time.

    This is turning into rather a bit of a rant but I am floored to think that a necklace I have made loads of times could have actually sold for £50 odd quid if I had priced it astronomically.

    What is everyone elses thought? Underpricing may be bad but my personal feeling is that vastly overpricing a piece you know to have been made for a few pounds is pretty dishonest and is a rip off to your customers. I would rather make 10 sales at £8 per necklace than hardly ever sell one at £50.

    I am sorry if this has offended anyone, there is NOTHING wrong with making a decent profit but there has to be a line between profit and blatant dishonesty surely?

    Louise
    x


  • #2
    Hi Louise,

    It's an age old argument really . . it depends on how much value you put on your own time as well as the cost of the materials and other stuff like web site, advertising, etsy costs, etc. . . and it doesn't mean that the pieces you make, have any less value to the people that buy them, even tho they pay less with you than with someone else.

    It seems to me that the other person you are referring to might just be placing more value on their time in making the pieces . . or it might be costing them more to make them when you add in all the true costs.

    . . and just because the other person is advertising their pieces for sale at a much higher price than you are, doesn't mean they are actually selling them or very many of them at that price . . just that they are happy with the sales they making.

    . . and the same for yourself as well . . if you are happy with your pricing and it sells the pieces you make, at a level you are happy with and a cost you are happy with . . well . . to be truthful it's not really worth stressing yourself about what the other person is doing . . just keep selling 10 at £8 ea happy in the knowledge that very probably the other person is only selling 1 at £45.
    Gloria

    www.dichro-findings.co.uk
    Etsy Shop
    Artfire Shop
    dichro-findings blog

    Comment


    • #3
      I really think you are underpricing if you are selling necklaces for only £8.

      In my opinion, its not ripping someone off if something costs £4 to make in raw materials, but selling it for £30. If someone is happy to pay for it, then why not?

      Besides, the way I see it, if raw materials only cost me £4, great, but then there's my time to make/design something, general costs such as tools, website fees, packaging, storage, marketing materials etc. that I also have to factor in. If a tiara costs me £5 in raw materials, I certainly wouldn't sell it for £15 - it would cheapen the item, and it wouldn't cover what I think would be reasonable costs.

      If you are happy to sell things cheaply, and make a few pounds, then good for you, but I don't see a problem with other people trying to make a bit more out of it, and I certainly don't see it as 'ripping people off'.

      I'm not meaning to argumentative, but jewellery is a subjective thing, and people have different opinions on the matter.

      Comment


      • #4
        I can understand where you are coming from Louise.
        I have often gone to small handmade jewellery sites (rather than the Tiffany and Westwood type sites) and been amazed at pieces in the £30+ range that, like you say, are made with czech/indian/chinese glass and strung simply with SP findings. I would consider them 'costume jewellery' and would not feel comfortable at selling them for more than £15.
        I think if the difference between the material cost versus selling price is around say £10 for a necklace then it is a good deal for both me and the buyer.
        I have sold several (SRA) lampwork bead pendants on SP or craft wire headpins with a SP thong for £5 when the total cost to me was under £1 as they were orphan beads and felt a bit guilty at a 500% mark-up but they are still good value for the buyers I think. I have made a few necklaces for around £30 but they included SRA lampwork beads, swaro's, pearls or gemstones and sterling findings.
        I would love to make more expensive jewellery using the finest beads available but it is very hard to find the more afluent buyers that could afford them. Most of the people in this area are not prepared to pay high prices for jewellery or are feeling the effects of the credit crunch.
        As it is, I am happy to sell reasonably priced jewellery that people can afford and enjoy, but I am not going to be able afford to retire on my earings just yet.

        Melanie

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        • #5
          I can see where you're coming from but I wouldn't describe it as 'dishonest' because no-one is forced to buy from anyone and if you feel an item is overpriced then you either look past it or return it.

          The other thing I guess is that we don't know the overheads of each business and that just because it costs £5 in materials to make an item doesn't mean that's the end of the story in terms of pricing. Some have to take rent (warehouse/shop/studio/office) into account and obviously the costs associated with running a website (particularly if it's a super-duper all-singing all-dancing professional one), amongst other things that I can't think of right now.

          Also, as others have said in threads about pricing before - people are paying for your design skills. I know I sometimes have to have a few goes at a piece of jewellery before I get the desired result which invariably ends up with some spoiled findings/beads and I guess some people will include the costs of these in their final prices (I don't but I'm just guessing here).

          I do see your point though and it's great that you're happy with your pricing (and better still that your customers are so chuffed with their items that they'd be happy to pay more!).

          Hope I haven't offended or anything,
          Lorna x
          Lorna x

          http://twistedspiral.wordpress.com/ - I've finally ventured into the world of blogging!

          Comment


          • #6
            If you're happy to sell at your prices then that's great,
            but if someone else determines their "wage" needs to be
            £45 for a set then that should also be OK too

            As a comparison here's some pricing from Pilgrim a well known
            Danish design company...Necklace £25, Bracelet £19.50,
            Earrings £10 -£20. Pilgrim Strung Beads Pricing.
            Pilgrim are a very popular sought out brand so there's
            definitely a market for mid range costume jewellery pricing.

            Then there are places like Astley Clarke who do sterling pendants
            with gold vermeil (plated) for £195+ (there's a market for those too).

            Personally my mark ups aren't huge and so I have to worry about
            staff costs, rent, rates, bills etc and do my sums accordingly.
            Someday I'd love to be in a position to make the same kind of
            salary making jewellery as I did selling computer software
            but that will be quite a while yet as my volume of business
            would need to build up

            Nicola xx
            **FREE to enter monthly draw on my BLOGS**
            Different prize every month
            Jewellery Creations & Shop Blog
            PMC & Silver Clay Hints and Tips Blog

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            • #7
              I agree with you completely, pricing up jewellery does not make it look like it's worth more, i wouldnt spend more than about 15 on ordinary glass beads, i sell my sterlingsilver and swarovski less than £20 so the idea of someone chargin and extra amount for when mine was more expensive reflects on their pricing in my eyes because i dont know anyone in early/mid 20s who would spend more than £20 on one item, i spent £12 on single stud pearl earings before i realised they can be made for about £2!

              Lose customers if u price up sometimes, its easier said than done
              http://www.justgiving.com/renata-harris (1/2 marathons for World Society for the Protection of Animals)
              http://flashsparkle.blogspot.com Vegan cookery

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              • #8
                Its not about valuing your time because everyone values their time, im sure OP does too! i for one have no time!! Its looking at the item as a whole what the market rate is.
                Jewelleru making isnt about pawning something off for as much as u can get for it, its about creating something good, and if you want your product to be loved by everyone you price is to be accessible, jewellery is made to be worn, with jewellery as a sole business aside. saying this from the viewpoint of making jeellery cos its nice but not making it fulltime!
                http://www.justgiving.com/renata-harris (1/2 marathons for World Society for the Protection of Animals)
                http://flashsparkle.blogspot.com Vegan cookery

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                • #9
                  Thanks, I DO value my time (I have two children 2 years old and under so what time I get to myself is VERY precious!).

                  Let me say, for all people go on about under-pricing, it works the other way too! I had several people walk right by me at the craft fair I attended, then something caught their eye and they actually stopped to look, and said that they were actually on their way out of the fair because they had taken a look at other jewellery stalls and decided that it was over-priced and more than they were prepared to pay.
                  So, we can LOSE custom by others over-pricing, it gives the impression that handcrafted stuff is far too expensive for most people at this time.

                  Again, I'm not talking about technical pieces that have taken hours to make, or even high quality crystal or semi-precious, I'm talking about beads.
                  I still think that a necklace costing £3 or £4 to make shouldn't be marked up to £60 if it has taken 20 minutes to make (or probably less) even given any overheads like websites etc. To me that is overkill to the extreme.

                  And you are right, no-one is forcing them to buy it but when the general public are blindsided and baffled by jargon like 'high quality Czech handmade glass and tibetan silver clasp yadda yadda yadda" then it can look much more expensive than it reaaly is.....they see 'silver' and 'quality' and think ooooooo it must be great if it's that expensive. This doesn't make it right!

                  Louise
                  x

                  Comment


                  • #10
                    Like yourself I go on to websites and check out competitor prices and sometimes they are a lot higher than what I charge and I can see how much work and the cost of components have gone into that piece. Then there are other sites that sell them cheaper than I do and I know that they are just covering their costs and making a little for themselves but there are other factor to consider as well. It depends on how much advertising to sell that piece of jewellery as well. If it just off a website, your costs will only be website hosting, postage and packaging. Me personally I do a lot of wedding fairs to get my sales and the wedding fairs cost me anything from £50 to £150. Then I also advertise in newspapers quite a few times every year and again this cost approximately £40 to £60. I was doing the Scottish Wedding Directory but they have put their prices up so much I couldnt justify it this time.
                    Something Shiny Something Sparkly
                    Handmade Tiaras & Jewellery by Diana @ dizaTIARAS
                    My blog
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                    • #11
                      If I sold everything I made on the day I made it, then I could afford to sell it a bit cheaper but some weeks I may only sell a few pieces, so have to charge a lot more for them as otherwise I wouldn't make a living. I think it's reasonable to give myself a good hourly rate for the skills I have as a designer/maker. That said, my work is quite reasonable compared to lots of others who do similar work and no-one seems to mind paying upwards of £25 for a pair of silver earrings or £80 for a bangle at a craft fair. On line, people will pay a lot more, I think probably for the convenience of being able to just click on something.

                      I think it boils down to whether it's a hobby or your full-time career.
                      Best wishes
                      Carole

                      www.caroleallenjewellery.co.uk

                      Comment


                      • #12
                        I think you can damage yourself if you underprice. What if a company/shop asks to buy from you wholesale? If you are charging £8 for a necklace that cost £4 to make and they want to buy wholesale at 50% of the cost you can't sell to them (or you can and not make any money!) so you could loose a big order.

                        I have products on my site that have different mark ups, I make quite a lot on some things not so much on others. My studs are £15 but probably only cost me £2.50 to make, a particular bracelet only has about 70% mark up. I make jewellery because I love it but I want to make a living from it so that I can continue to do it. People are not just paying for my silver and findings they are paying for my time (resourcing materials, studio overheads, photoing jewellery, putting it onto my website etc the list could go on and on) and my creativity, as much as people think that they could make that (you know the ones who come to you stand and mutter they could make that for free!!), isn't free!

                        When I price I bear in mind the customer type I want to sell to, how much they will spend and how much I can sell for wholesale and still make a profit and pay for my time. I still think I undercharge on a lot of items, nothing is over £75 on my site. I think the confidence for those prices comes with experience. I say if you can get those high prices good on you, your customers must think your work is worth it. Customers are savy enough to shop around and will pay what they want, you don't see primark putting prada out of business. There is room for all but don't hurt yourself in the process. Look after yourself as well as the customer.
                        Just my thoughts anyway!! xx
                        Lucy

                        www.lucykempjewellery.co.uk
                        http://lucykempjewellery.blogspot.com

                        Comment


                        • #13
                          I think you have to price honestly according to the materials, the skills and the time involved in making the item. Over-pricing assumes buyers are valuing your time and effort in the same way as you do yourself, which is often not the case (unless you are selling to fellow crafters of course!).

                          Buyers may be very canny to how much your materials are likely to cost, so won't buy if you are adding on too much for your own labour, especially when there may not be that much 'skill' involved. I guess the proof of this is whether or not you actually sell items. I sell mainly through face to face contact, and I think this makes my pricing more honest. I increase my prices a little on my website to account for overheads involved in selling that way.

                          If you are talking about proper skilled silversmiths and precious materials etc, rather than bead stringing and simple wire work etc, like mine, it is reasonable to be charging a premium for your skills and the fact you are selling your skill as well as the materials.
                          WightRose

                          http://www.folksy.com/shops/Wightrose

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                          • #14
                            Pricing's the thing, eh? Personally, I think we all come up against the "I could make it for less"... which is true for most of us, but not for the general public!

                            For my own stuff, I could never sell it really. Half of it takes so long that selling it for cost-only would really skew the market - and selling it for what it's 'worth' in terms of the time I spent on it... well, who would pay £200+ for 'Lilian'?

                            Not a helpful post, I suppose....
                            "I was inoculated, very early in life, against all forms of magic and elfin whimsy, even when convincingly disguised as literature." Clive James
                            Click the scales- rep points are for life, not just for Xmas!
                            http://madlyswaps.blogspot.com/

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                            • #15
                              I agree with what Lucy was saying: a lot the pricing will depend on where the jewellery is being sold.

                              If you only sell direct to the public at fairs, you can charge whatever you like and keep the profit, but if you also sell through galleries they'll add their own commission. So you have to have a trade price, which covers your materials, time etc and a bit of profit, and that's what the shops/galleries pay you for your work, and their customers will pay that plus the commission. But you can't charge the same trade price directly to the public because then you'll be undercutting the gallery prices and if people find out they can get it much cheaper from you, the gallery won't be best pleased! So you have to have a higher retail price too, which is more in line with what the galleries would sell your work for.

                              I didn't understand this at all when I first started doing fairs so my retail prices have had to creep up a bit since I've done gallery stuff too, but I still do special offers for fairs etc which are a bit cheaper than my website prices.

                              I hope that's not too much waffle...but it might explain a bit why some people's work is dearer than others anyway...??
                              Emily
                              X
                              Emily Richard Jewellery
                              www.ejr-jewellery.co.uk

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