This question really depends on your intention in making your own jewelry. If you are making DIY jewelry as a hobby, you will probably save in the long term by just making your own at home.
If you are not very particular with the materials used and you’re fine with cotton twine and leather cords, plus other materials that cost less than gold and silver, you should be able to save quite a bunch from DIY jewelry.
However, if you want to know how to make jewellery to sell, then you need to employ a slightly different formula to figure out if you’re going to profit from your efforts or not. The good news is that there are literally thousands of artists out on the Web who are able to succeed with DIY jewelry to sell. This success can also be met by artists who want to try their hand in creating DIY jewelry bracelets and DIY jewelry earrings.
Computing the base price for homemade jewelry
There exists a simple formula for computing the base price of pieces of jewelry that takes into account the cost of labor, plus overhead costs:
(Materials + packaging) x 4 + hourly cost of labor x 10% (for overhead expenses)
The cost of your labor will depend largely on how quickly you can get things done, and the difficulty in which you are able to execute a design. Of course, in the beginning, you may take more time to make something because of your lack of familiarity with basic techniques. It’s up to you how you would rate your hourly labor rate with each piece of jewelry.
Let’s say that the cost of your materials is about $5, and the packaging costs $2. Combined, that’s $7. Multiply that by 4 and you have $28. Let’s assume that it took you about 2 hours to complete a really detailed bracelet at $15 per hour. $28 + $30 is $58. Multiply this figure by .1 and then add the product to the total.
The base price for the piece of jewelry is $63.80. You can now adjust up and down without losing a lot of cash. Some folks like to think that all they have to do is to double the cost of the raw material. You can do this, but this will definitely not make your business profitable, as this formula does not take into account overhead costs, fluctuation in material costs, and the like.
Now, the reason why you need to multiply the cost of the raw materials by 4 is never about marking things up too much. The real reason behind the quadrupling of the cost of the raw material with the base price is you need to give yourself room for price adjustments for wholesale. Wholesale rates are great if you eventually transition to mass production, and can be a good source of income later on.
Planning your homemade jewelry business
Like other markets, there are multiple ways to enter the homemade jewelry market and make a profit the first time around. There are two main types of jewelry that are being sold in the market today. The first type is called fashion jewelry or costume jewelry. This type of jewelry is also called “fake jewelry” because it is not made of precious metals or stones. However, they are still being sold quite well throughout the world.
This type of jewelry is manufactured from cheaper materials like copper wires, plastic beads, plastic gems, etc. They are naturally mass-produced because it is so easy to acquire the raw materials, and the DIY jeweler would actually have a lot of leeway in designing each batch of jewelry because of the sheer availability of raw materials.
Your target market for this lower-priced jewelry would be trendy and hip customers who like to have a lot of variation with their personal fashion every single day. Due to the base price of costume jewelry, people can actually purchase a lot of jewelry at a single time, which is good because you would want your wares to move quickly out of your inventory.
The second type of jewelry is called fine jewelry and these are what we commonly see in jewelry stores. They are made with precious metals and can be set with precious or semi-precious stones.
This type of jewelry requires a lot of work for first-time jewelry makers and you would often have to prepare real jewelry equipment as well as tools to be able to make fine jewelry at the level or grade that jewelry enthusiasts expect them to be.
Fine jewelry is also often made for special occasions like coming of age celebrations and weddings.
There’s a reason why such jewelry costs so much: they are in high demand, their value doesn’t really decrease especially if they’re made of gold, and they can be sold and resold once again at profitable rates. A good example of fine jewelry is the iconic diamond ring, which is often called a woman’s best friend.
In-between jewelry is made of mixed materials. For example, some pieces of jewelry can be manufactured with a mixture of plated gold and a semi-precious stone (as in the case of many rings affixed with gemstones like rubies and emeralds).
These are mid-range jewelry that may not cost as much as fine jewelry but still command a heftier price point compared to costume jewelry. This type of jewelry is perfect for trendy and design-savvy customers who like buying jewelry but may not be interested in super expensive ones.
As an up and coming jewelry maker, it would help if you can research the most popular types of jewelry in your local market so you can plan your business well. Find a spot in the market that you can fill because no one else has filled it first. You might be surprised as to how profitable a DIY jewelry business can be.