Pricing... Again.

[Patstone]

So you rely almost totally on your website and word of mouth with a couple of shows. I am retired, so we have other income thank goodness.

[pearlescence]

I watched the luxury Christmas prog on ch 4 last night. £650,000 for a silver and gold plated diamonds tree topper. It was lovely..but I wonder if it sold.
It really is a matter of somehow making contact with the buyers who will appreciate good work and are willing to pay a good price for it. I know my pearl stock bears comparison with any pearls out there in the market in the UK today, but tell that to the person who wants the Mikimoto brand or to shop in Aspreys...even though they are willing to pay a hugely inflated price for them

[ajda]

You're misreading what I've said.

Apologies if that's so... though I'm still puzzled. I understand your advice to individuals not to underprice their work by underestimating costs - thereby doing themselves down. I still don't get your notion of "devaluing the market as a whole". Where you place yourself within that market, at the tat end or the luxury end, or somewhere in the middle, is up to you.

Alan

[pearlescence]

I think - I me think - that what Peter meant was not going by what you sell ..ie shedloads of imported tat at the low end of the market or exclusive brand stuff. He was saying that within your market don't underprice because that makes it so much harder for anyone in exactly that market as well.
When that happens and you are respecting your work with prices which allow a living and someone comes along next to you with cheap tat it is soul sapping but true that they will get most of the sales and the money and you will get the funny looks for being too expensive
There are fake shell pearls out there for pence after all. And dull lumpy irregular pearls. again for pence. Or you can get mine..each one picked by me from the wholesalers in HK for quality and then haggling on price. But people will go to ebay for jewellery maker for their pearls because they are cheaper. <sigh>
People don't know better. I once had a conversation with someone wearing some majorcan fakes - she said she knew they were real pearls as she had been to the factory and seen them being made....

[Gemsetterchris]

It's quite possible for some of us to produce something like a "mega-buck" item, the problem is having to lay out on the material in the first place & then sell it.
Unless you can get in with the right circle of people It's abit tricky, since they'll more likely head somewhere established as a known luxury brand & not from someone working in the garage
There are exceptions, as one of the best hand engravers in the world does in fact work in his garage..& being a benchworker, isn't a millionaire.
At least you'll be rich in job satisfaction while struggling with the bills.

[Petal]

Interesting thread this. IMO, having just done three shows, two of which were curated and one wasn't I'm definitely going down the curated only shows from now on. I also want to see an exhibitors list before I book an event, so I can see what people are selling, what the quality is and the price! At all three shows we met some wonderful customers, some returners from previous years, plus new ones. I only had one person who wanted a 'bargain' and wanted to haggle me down. They paid the full price and I told them that my prices were going up next year!

[BarryM]

There is no such thing as the "right price" based on a formula of total cost times some markup multiplier. The sales price of an item depends on many factors other than the cost of production - quality, demand, economic conditions, rarity, marketing strategy, fashion etc.
A low price does not necessarily equate to "tat", which seems to be a common interpretation - just look at the price of antiques - the sales price of which vary more with fashion than many other factors.
It is not the responsibility of anyone to preserve a price point "for the good of the market" - a market by definition is a competitive environment. If it suits me to sell my products at cost or even lower or at 10 times the cost then that is MY decision and mine alone - we all have different drivers and motivation.
Hobby makers (such as myself) are a tiny, tiny fraction of the total jewellery market and will not offer serious competition to a professional jeweller, the main danger is from imported goods where manufacturing costs are significantly lower than the UK and volumes are huge.
One cannot blame the customer for buying "cheap imported tat" in preference to hand made, high quality, high price items - our culture is changing to a "throw away and buy another" attitude for many items - from computers to clothes and also (sadly) jewellery. Quality and longevity are less important than price and availability. "I want it now and I want it cheap" rather than "I'll wait and also pay a high price for exactly what I want"
It is the customer who drives the market, not the producer.



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[pearlescence]

Totally agree BarryM. As for price v Value. Mrs Thatcher's pearl necklace sold yesterday for £32.5k...I could make you a nice new one, probably with rounder and certainly with shinier pearls and 18k gold clasp for £1k tops, probably closer to £500
However (avoiding a 'but' there!) the 'just a hobby' brigade do drive prices down with their replacement of materials prices, nothing for their time or profit, while some of us also have to charge VAT and corp tax...<sigh> You can't even point out they would probably save money if they went legit and put it on their tax return. It's a hobby so it doesn't figure

[ps_bond]

There is no such thing as the "right price" based on a formula of total cost times some markup multiplier. The sales price of an item depends on many factors other than the cost of production - quality, demand, economic conditions, rarity, marketing strategy, fashion etc.

Nope, but there is the minimum price at which it should be sold in order to cover costs. The formula is there to demonstrate that. The markup is nothing more than a convenient way to capture the cost of selling, as I keep saying.

A low price does not necessarily equate to "tat", which seems to be a common interpretation - just look at the price of antiques - the sales price of which vary more with fashion than many other factors.
It is not the responsibility of anyone to preserve a price point "for the good of the market" - a market by definition is a competitive environment. If it suits me to sell my products at cost or even lower or at 10 times the cost then that is MY decision and mine alone - we all have different drivers and motivation.

A low price invariably means low quality for new goods; subsequent second-hand value is a whole other market model. Specific to the field of handmade jewellery, if you don't spend much time on a piece then you aren't able to put much of yourself into it (so the buy-in to "soul" becomes spurious - what's the point in buying it handmade?); if you spend lots of time on it but don't charge for it then the customer will not perceive it as having any value. If you understand that and want to do it regardless then go ahead.

All that can be done is to try and encourage people to recognise that they are undercharging for their work; if they can't or won't understand that by doing so they devalue the market as a whole and that in turn will damage their longer term prospects then that is exceedingly short-term and narrow focus thinking. Again, this is not (just) me saying this - this is basic marketing theory.

If you can sell your products at 10x cost, then go for it and good luck to you if you can do it. But only an idiot sells for less than the actual cost; if you want to do that, charge properly and give the money to a charity, you'll do yourself less damage in the long term. Loss-leaders very rarely actually make a loss; break-even is the usual base price.

Hobby makers (such as myself) are a tiny, tiny fraction of the total jewellery market and will not offer serious competition to a professional jeweller, the main danger is from imported goods where manufacturing costs are significantly lower than the UK and volumes are huge.

Hobby makers - or more accurately part time makers - overlap with the full-time makers, particularly in silver jewellery. If you are selling any jewellery, you are a professional - you get paid for it (and pay tax on it). The jewellery market splits down into a number of sectors, of which the mass produced stuff is just one.

One cannot blame the customer for buying "cheap imported tat" in preference to hand made, high quality, high price items - our culture is changing to a "throw away and buy another" attitude for many items - from computers to clothes and also (sadly) jewellery. Quality and longevity are less important than price and availability. "I want it now and I want it cheap" rather than "I'll wait and also pay a high price for exactly what I want"

The issue is not buying the cheap imported tat, it is tarring handmade jewellery with the same brush.

It is the customer who drives the market, not the producer

Hmm. Interesting idea, so all marketing theory can be binned then? Producers can and do both influence and control markets wherever possible - they create demand and then fulfil it. CF Apple (again!).

[Gemsetterchris]

If your still learning & you know your not as good as it gets, charging abit less for the work quality & extra time can't be a bad thing.. running a business before you've learnt the ropes isn't a great idea.
If you're confident you've mastered what your doing, then charge for it without justification.
I might have to add some engraving to something, but wouldn't think of charging much for that if I thought it abit amateurish.