This week's Featured
Item!
Starting and running a jewelry business.
(Part 8 in a series)
Over the past 7 weeks we have covered:
· Starting your business and the steps
involved.
· Pricing your jewelry (or other creations).
Includes examples.
o A “Basic Rule”.
o Materials costs – base & secondary.
o Design & Creation time – value of.
o Name recognition.
o Intrinsic and perceived value.
o General business costs.
· Wholesale pricing.
Let’s look again at some of the questions I listed in
part 1 of this series:
· “My
co-workers love the jewelry pieces I make for myself, and they want
to buy them. How much should I charge?”
o I hope by now you understand that your work has value.
It is relatively common for women to admire the beautiful jewelry that
another woman is wearing. Sometimes when they find out you are the creator,
they ask to purchase your creation. In doing so, they are they are confirming
the value of your work. Since they are confirming your work has value,
you, too, should respect yourself & your work, and charge accordingly.
· “How do I figure my
costs and selling prices for my jewelry?”
o Go back to “The Basic Rule”. YOUR MATERIAL COSTS X 3,
+ YOUR DESIGN & CREATION TIME, + “NAME RECOGNITION”,
+ INTRINSIC VALUE.
o The Basic Rule is only a basic guide, a starting point, to help you
develop your own pricing schedule. One in which you can recover
all of your costs, be paid what you are worth, and make a profit.
· “A woman told me that
she would pay me my costs and she will wear my jewelry for people to
see and I’ll get a lot of business. Is this how I should start
my business?”
o First, she is telling you that your work is special and valuable.
o Second, unless she is a great sales person with a large social circle
of friends with the money to buy your creations, you’ll end up
with nothing and she will have your wonderful creation without paying
for it.
· “What jewelry supplies can
I buy (with a state resale number) without paying the sales tax (California)?”
o You may purchase “for resale” the following items,
only: 1) everything that will be included in the final product
when it is sold; 2) packaging for your product when it is sold and delivered
to your client.
o You must pay sales tax on everything else you purchase that
is not physically included in your final product when you sell it. The
state requires you to account for everything you purchase “for
resale”, and it expects you to pay the unpaid taxes on everything
you do not sell.
o The state requires you to pay, to them, the sales tax for
all items you sell. They don’t care who pays the tax
(your client or you), as long as they receive their money. I suggest
you collect the tax from your client when you make the sale.
· “My hairdresser has
offered to sell my jewelry in her salon. She will display them and pay
me after she sells them. How much do I charge?, Do I need a written
agreement? Who is responsible for the sales tax? Help!”
o This is called a “consignment” sale.
Because she is not purchasing your creations, outright, and you will
have to wait for your money, your discount, to her, should be
less than for a regular wholesale sale.
o It is very important to have a written contract between
you and the consignee. It should cover each person’s
responsibility, when you will get paid, how and when you will recover
all unsold merchandise, physical responsibility, etc. You can find sample
Consignment forms in books on crafting as a business. (See book references.)
o The Consignee should be responsible for the collection, and paying
to the state, local sales taxes.
· “How can I make sales
and charge the prices you tell me to charge?”
o First, I’m not telling you how much to charge. I am
giving you information, and the tools to develop your own pricing schedule.
One in which you will cover all of your expenses,
receive a reasonable compensation for your creativity
and craftsmanship, and make a profit.
o Don’t take the attitude, “I’m not worthy.”
If you are creative and a fine craftsperson you are every much
as worthy as Paloma Picasso (Tiffany & Co.).
o Produce fine quality, creative and unique jewelry.
o Be creative and do not create jewelry that resembles mass
produced, cheap and/or imported, jewelry.
o With your wonderful work, you should aim high. Set your “Client
Level” and “Price Point” high, and you will
take yourself out of the arena of the low talent and low priced “designers”.
Remember, “Heavy Weight” boxers never have to worry about
“Bantam Weights.” Whether it’s beads or boxing, or
music, “want-to-bees” with no talent will always be in the
background. So always keep yourself in the front.
Next week I will finish this series with a few
more comments, a number of reference books and magazines, and more.
