Wednesday, March 3, 2010

Wise Wednesday - The Art (or science?) of Pricing - Follow Up

So last week I shared with you my take on the art and science of pricing. A number of great comments were made and I chatted with CarolBradley about the formula and she brought it to my attention that I had mistyped! I wrote that you multiply your labor by your materials when really you add them together to get your At Cost price (you should NEVER sell at cost, by the way), it is now corrected in the original post. She also shared with me her formula for pricing which I really like. To price her jewelry, CarolBradley uses:

Materials = Raw materials for the piece + shipping, etc
4 x materials
add pro-rated labor at $xx an hour
add 10% for overhead
and this gives you the MINIMUM price for retail
Again, this formula can be personalized as needed, and make sure that you are paying yourself a fair hourly wage!
*Also, in all of these formulas, we are assuming that the seller buys their materials at a wholesale price, rather than retail.

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