230% markup - can this be right?

[Milomade]

what do you guys have as an hourly rate?

[Boo]

Sorry, I'd gone to bed.

I'm sorry, but I'm not going to discuss specific numbers in a public forum (or even privately), but if you want help ascertaining your own figure, this free spreadsheet from Chris Parry is really good for working out a number. It's a spreadsheet and you put in your own numbers and over several sheets it gradually works out an item price for you. It's quite an eye opener.

The early and really useful part of it is ascertaining your hourly rate - it starts by asking how many hours a month you're expecting to work, how many will be spent non-creating, the annual income you want to generate etc. That gives you a basic hourly rate, to which you then add other indirect costs you need to cover, like utilities, insurance, repairs, marketing etc. - this then gives a second total to add to your hourly rate in order to cover those costs in the hours you've said you'll work. You then add the direct costs like packing materials, the items raw materials and it works out a wholesale and retail price based on that information and how long you spent making the piece.

And the final figure will be a lot higher than you'd expect. It gives an absolute minimum price to cover costs and time, a wholesale price which gives you some profit and the retail price.

Chris Parry -Bespoke Jewellery: Free Spreadsheet for pricing your work.

[Boo]

I meant to add, working through the calculations, my own prices are a little above the wholesale price, meaning I'm covering everything I need to - but that doesn't leave enough capacity to go down the wholesale route.

I am gradually adjusting new prices higher for 2 reasons, one of which is that I simply think they're too low at present and in the coming months my jewellery sales are going to be more important to my income as I'm already under notice with my day job as the contract is concluding in the New Year - and I can't survive longer term on current prices - as some of my costs are covered by other work at the moment, but won't be in future.

I'm off out this morning for an early appointment, but I'll return later.

[Solunar Silver Studio]

If you're thinking like this, it would suggest that you've got your prices wrong - too low. I'm just the same, hence it wouldn't be worth selling wholesale for me at the moment. I'm effectively selling retail at wholesale prices.

Someone on Etsy explained the way they do it and the penny dropped for me - it suddenly made sense - you work out a price that covers your costs and time and overheads and this becomes your wholesale price - the price you won't sell below - wouldn't be worth doing so. This is your actual item price.

You then add whatever factor is appropriate to bring that to a retail price - usually a factor of something like +125%. If you sell it yourself, the retail mark up is yours - you have marketed it, paid for your site etc. etc. out of the retail portion of the price - you pay yourself for the effort of selling it. If a shop/gallery buys it at your wholesale price, you get what the item is worth to you to sell it at - the first price you set - and they reap the 125% retail profit for making the effort and their costs in selling it.

So in reality, your bracelets should be a wholesale price of £30 and you/the shop should be selling them retail at £65.

Thanks for explaining that so well Boo....but...OMG...it's scary!!

[Milomade]

thanks for all the help. I made a conscious decision to make a new price list for my work based on all your suggestions - thanks Boo for the spreadsheet - that's going to be a great help. I'm wanting to spend more time on Mil;omade next year and less time web designing so like yourself I need to reconsider prices too.

[shelliem]

I don't know if it's too late to add to this thread but I used to work in the Gift Industry selling handmade wooden toys which were to be honest not that great quality but looked good and very unique (which is why I left because morally it didnt sit with me).

However, because the products were so unique people used to pay the price for them which I certainly wouldnt have paid - knowing how much they cost and the quality of them.

One of the issues we used to get from our customers (the retail outlets) was that our retail website was undercutting their website, so the company had to make a decision about whether to ultimately sell via the website and lose the retail business from the customers complaining or do something about the website.

They chose to change the prices on the website to a retail price and the extra money that they charged more than covered for the loss of business they recieved from some of their online customers. We still sold at trade prices at fairs etc.

Also I'm not sure how you would do this but we used to have something listed in the shop which generated repeat business, which also gave us an excuse to call our customers every month and retain business and shop space - which in this case were letterboards which had letters for childrens bedrooms, the shop needed to keep them updated or they would have wasted their original start up cost of it and customers used to love them. I'm not sure how I feel about the ethics of this however most of the shops would have generated more profit from these letters than the other items they sold from the company.

Maybe some food for thought ?

[Solunar Silver Studio]

The pricing spreadsheet looks really interesting too.... Thanks!

[Milomade]

right I'm off for my meeting - quite nervous now - don't want to come accross as a bumbling numerically dyslexic idiot - but I've got 40 minutes on the train to have a good think and calm down.

[Petal]

I've sent you a PM !!!!

Good luck Evie

Love

[AlexandraBuckle]

Good luck at the meeting Milo.
I don't have much to add about the pricing that others haven't already mentioned. But i'm happy to discuss my prices etc via PM if you need more help