Record exactly what you spent to create each design.

You will really need to price each item used in your designs. For example, if you pay £1.00 for 100 beads, and you used 20 beads in your project, you would divide £1.00 by 100 (£0.01 per bead) and multiply by 20, and so on until you have the total cost of each design. The more meticulous you are about calculating expenses, the better your pricing will be. Even the packing materials you use for the design (organza bags etc) and the shipping costs of the supplies should be accounted for. Keep receipts, this will also come in handy during tax time, if you want to deduct business expenses.

Calculate the price.

Using a formula will give you a starting point, and you can tweak the price with the steps that follow.

Take the total cost of your supplies, multiply it times 2.5 (some people multiply by 3) and there’s your retail price. A spreadsheet is perfect for this step. Simply set up a table of products used your cost, and then a formula to calculate the pricing using the 2.5 or other multiple.

Adjust the price for the cost of your time.

You really, really need to get paid for your time, so decide how much you want to make per hour, and make sure that your labour is accounted for in the price.

Let’s say, for example, the cost of supplies for your design is £5 and you calculate £12.50 as your retail price (using the 2.5 guideline). If you want to pay yourself £6 per hour and you spent 2 hours on this design, then you really need to be charging at least £17 for the piece (£5 supplies, £12 labour).

Just because you enjoy doing the work doesn’t mean you shouldn’t get paid for it! Make sure you’re getting at least minimum wage.

Market research.

Now that you have an idea of what you need to charge for a design, it’s time to take your fledgling jewellery piece to the market and see if it can be profitable. In the main, it’s a good idea to start off with the highest price you think you’ll get for it, because you can always bring the price down.

Has anyone ever offered to buy any of your jewellery? This is a fantastic indication that there’s a market for it. If people fight over a necklace you made, that’s also a great sign that there’s a market for it. Friends, family and co workers can be great sounding boards for prices. Ask them for a rough idea of what they would pay for it.

Have you already sold some of your jewellery? This is important in that it gives you information on how much you can sell a design for. You may hear that they would pay £XX for a design, but an actual sale is real, tangible evidence.

Re-evaluate the design.

If you encountered feedback in the previous step which indicates that the price you arrived at isn’t going to work then you’ll have to do some thinking about this particular design.

Have a look at the materials you used. Did you use sterling findings and semi-precious beads, or less expensive beads? Higher quality materials will always demand a higher price in the market. You may want to consider mixing jewellery made with high quality materials and less expensive ones. This lets you attract business from both the high end buyer, and the more budget minded ones.

Don’t sell yourself short just to break in to the market. This will only get people used to cheap prices and it’ll be difficult to raise them later on, endangering your chances of ever making your business profitable. It’s better to redesign or reject pieces that don’t cover their costs – sometimes you’ve got to be a little bit ruthless!

As someone who’s sold on the internet for 7 years now I can say that people are often suspicious of products sold at unusually low prices and the old adage of “you get what you pay for” is alive and well. If your pieces aren’t selling well, try raising your prices. It might go against your gut instinct but trust me; you may well be surprised at the results!