Having made the sterling silver byzantine weave and amethyst bead necklace for my friend and priced it at £50 I wanted to know if I had priced it correctly or not.
About the same time as I'd been looking for sources of sterling silver jump rings etc to make the necklace I had revistied the website for CooksonGold which is a company which sells a huge variety of goods to jewellery makers. I had opened an account with them back when I did my silversmithing course and was slightly surprised to find that the account still existed even if it hadn't been used for years. I bought the sterling silver wire I needed from Cookson. While I was looking at their site I saw an announcement for their recently started forum and decided to sign up.
It just happened that just after I had given a provisional price for the necklace to my friend, a discussion about pricing started up on the CooksonGold forum and gave beginners like myself a huge amount of useful information about how to go about pricing items for sale.
After a bit of research through a few books and online I settled on a pair of formulae for pricing that I was happy to use. As I am not expecting to be a full time jeweller and have to pay my mortgage from my earnings, the formulae for pricing were a bit simpler than if I was giving up the day job. The formulae I chose of follow include one for a trade price and one for a retail price and are given below:
Trade price: (((price of materials + price of hallmarking) x 1.25) + a labour charge) + 10% of the total as profit margin
The retail price is calculated in a similar way except that instead of multiplying by 1.25, the total cost of materials plus hallmarking is multiplied by 2.
When I plugged the details of the sterling silver and amethyst necklace into these formulae I found that the trade price should have been £63 and the retail price should have been £88.50 - I guess my friend got even more of a bargain than I thought she did!
You live and learn, as the saying goes. So when the friend in question asked me to make her a bracelet in a similar style to the necklace I did and quoted her a price of £45 on the grounds that she'd got a good deal on the necklace. She was happy with the bracelet costing her £45 and admitted that she thought that the necklace was low in price.
I made the bracelet for her and then priced the bracelet using my formulae and found a trade price of £36.50 and a retail price of £47.00 so she still got a good deal on it too.