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Pricing Formula


Wholesale vs. Retail

This leads us to wholesale vs. retail. If you want to make quantity sales, then this is a subject you must deal with. Many crafters feel they are being taken advantage of by wholesalers, but the rules for wholesale have already been established. So, you must play by their rules. Sure, you may be able to make twice as much selling your merchandise retail, but how much effort will it take for you to sell each one? You may sell your jewelry at a show, but you will have to spend 1-2 days at the show, plus spend money on food, drinks, gas, etc., while a shop could take it off your hands for only a few hours spent on the sale.

Jewelry Pricing Formulas

There are a few different formulas you can use when pricing your jewelry. One piece of advice to think about before you start this process, however, is to make sure you come up with a wholesale and retail price early on in your business development because later it can be too difficult to back track and do this. You want wholesale prices in case you one day decide to sell to a shop and you want retail prices in case you decide to sell at art shows. Obviously if you do both, you don’t want shop owners to get made that you are under cutting their prices, so your retail needs to be in line with shops that you sell to.

A simple formula when pricing for wholesale is to add up your costs (this includes labor, overhead, and supplies) and multiply by 2.

2 x (supplies + labor + overhead) = total cost to you

For retail, do the same, but multiply by 2.5 to 3 (often referred to as keystone pricing).

Below is an example of how this formula works, and of course, this can vary depending on the cost of your supplies, your hourly wage, and your overhead cost, but it will give you an example of how to apply the formula:

You make a pair of earrings and the cost of the supplies is $2; they took you 10 minutes to make and your hourly wage is $18, so that would be a labor cost of $3; overhead costs you’ve estimated to be $1:

Wholesale earring price: 2 x ($2 + $3 + $1) = $12

Retail earring price: 2.5 x $12 = $30

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