More Than WE Know

One of the challenges in any retail business is knowing how to price your merchandise. This is especially true when you sell original handcrafted, unique items.

It’s not enough to just figure out how much the materials cost to make the product. You also have to consider the cost of the time involved in designing it, creating it, marketing it, promoting it, selling it, packaging it, shipping it, and distributing it. You also have to allow for the cost of storage, waste, breakage, and returns. If you distribute it to wholesalers, you’ll want to be sure you leave room for their markup as well.

And before you settle on a price, you’ll need to consider who your customers are and what they can afford, as well as who your competition is and what price they are charging.

Most handcrafted items won’t compete on price alone, but it is an important decision with a lot of complex, contributing factors.

Assuming, that is, that you want to make a profit.

Amy Olson of Amy Olson Jewelry says that learning how to effectively price her handcrafted jewelry was one of the challenges she had to overcome in becoming a profitable entrepreneur.

Here is her story.

Amy, tell me about your business.

I am a full-time jewelry designer and artisan. I make limited edition and one-of-a-kind pieces for sale in boutiques, shows, and my etsy site. The materials I use are primarily semi-precious gemstones and heavy gauge sterling silver, but I love to mix in vintage components and 14kt gold for
interest and variety.

I have sold my pieces in various boutiques throughout the west coast, and also through seasonal trunk shows. I live on the east coast now and am in the process of committing to my jewelry business full time.

How did you learn how to create jewelry?

For as long as I can remember, I have been interested in anything that I can craft. I am mostly self-taught, though I have taken a few basic classes in wirework (I had the great fortune to work for Mark and Viki Lareau in Tacoma, WA, who gave me my first set of tools for Christmas. I still use them!).

I credit my grandmother for all of my skills, for she is my inspiration. After all, she was the one who got me crafting as a young girl and is a gifted craftsperson herself!

What is your best holiday item?

I think that my best holiday item would be anything from my Winter Collection. I have a few pieces that are specifically titled ‘holiday’ because they remind me of the season. For winter pieces, I’ve focused on oxidized sterling, 14kt gold fill wire and chain, and rich colors such as red and gold.

What inspired or motivated you to start your business?

Well, I’ve been making jewelry for over ten years now and the more I learned about the process, the more I wanted to make it my full time job. I am constantly inspired and am completely rewarded when I find my work’s perfect compliment in the wearer.

What keeps you motivated?

I need structure to maintain my motivation. Therefore, I create a schedule for myself everyday and try to stick to it. I will spend part of my day working on my line, part of my day promoting, and the rest of the day outside or among other people. In the afternoons, I enjoy going to a bookstore or coffee shop to sketch or look through magazines. These activities tend to keep my ideas flowing.

How did you fund your business?

I’ve just been using the money I have! I haven’t had a need to take out a loan yet, but I have certainly maxed out a few credit cards. My ultimate goal is to have a studio/boutique where I can sell mine as well as other artisan’s work. That is when I may have to take out a loan!

Who is your target market?

My target market is women in their 20’s and 30’s who want to embellish their wardrobe with jewelry or enjoy dressing up for the office. My pieces tend to fall in the more ‘classic’ category, but I enjoy mixing it up a little by combing vintage and modern elements and
making them asymmetrical.

What percentage of your business is online? What is your ideal percentage?

I would love to sell more online, but right now I would say that maybe only 30% of my business comes from online sales. I do really well at shows and markets where I am there in person to talk to the customers.

Where do you get most of your customers?

I get most of my customers through word of mouth, I believe. I’m not sure of this, but I haven’t found that my advertising or networking has been to my advantage too much. Promoting myself is definitely my weakest area!

What is the biggest challenge you faced and how did you overcome it?

Well, my biggest challenge so far has been staying motivated and creating a schedule for myself has definitely helped to solve that! I’m grateful to my friend Amy,who offered up that advice!

What was the best unexpected thing that happened to you?

I have customers who follow me to every show I’m at to buy my jewelry. It is so flattering to have someone like your work that much that they would travel and make the time to be at all of your shows. It really makes me feel good!

What do you wish you had known when you started?

I wish that I had known how to price my jewelry. It has taken a long to come up with a system that works for me, but I’ve finally done it! I’m sure I’ve lost a bit of money and profit along the way, though.

How did you come up with your pricing system?

I asked a lot of questions and did a lot of research. I listened to how other artists priced their work and came up with a system that works for me based on a variety of other equations. I also read books about building a craft-based business, which definitely helped me establish the base for which I have built off of.

Do you have kids? Do you work at home?

I do not have kids, and yes, I do work at home, which can be quite a challenge. There are so many distractions that can keep me away from my work.

What advice do you have for other Women Entrepreneurs, or Entrepreneur-wannabe’s?

There is so much valuable information available out there now, so before you jump in with two feet, do a little research so that you can be as well prepared as possible. Then jump in and follow your heart! I’m sure it will take you where you need to go!

(Amy’s right - there is a lot of good information out there. Here is a good article on pricing handcrafted jewelry. It’s good advice for other handcrafted items as well. )

To see more of Amy’s unique jewelry visit her site Amy Olson Jewelry.

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If you would like your business profiled on More Than WE Know please contact me at Liz (at) Morethanweknow (dot) com.

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