Overhead and Labor Costs

Considering Overhead

When pricing, consider your overhead. This is any cost that isn’t directly related to your merchandise. With jewelry, for example, beads would not be an overhead expense because they are part of the item you are selling. Some examples of overhead costs include:

• Travel (such as going to shows to buy supplies)
• Your office supplies (business cards, paper, pens, etc.)
• Your tools (pliers, wire cutters, etc.)

I’m sure if you stopped and thought about all the little extras other than supplies that you need to operate a jewelry business, you’ll come up with a long list of overhead costs. These are critical to consider because they do cost you money, and if you don’t include this in the cost of your jewelry, then you are losing money. Calculate your overhead and come up with an approximate overhead cost that you can apply to each piece of jewelry you sell.

Labor Costs

How much do you make per hour at your current job? How much money do you need to make per hour to live the lifestyle you are currently living? These are really important questions. I’ve seen too many jewelry makers make the mistake of working for free or below minimum wage. But, how realistic is that if you really want to make your jewelry business a full-time occupation or even a part-time job?

Even if it’s something you love to do, you have to eat. Therefore, be realistic about how much you need to make per hour. Once you have an hourly rate figured out, the next step is to figure out approximately how much time it takes for you to make your jewelry. You don’t have to time yourself on every single piece from now until eternity, but you need to have an idea of how much time most jewelry items take to construct. This will help you later on when you are trying to determine the final price of your jewelry pieces.

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