Professional Formula: Price = (Materials + Labor + Overhead) × Profit Margin. For a ring with $30 materials + $75 labor + $15 overhead = $120 cost. Add 40% margin = $168 retail price.
The Four Key Pricing Factors
Professional jewelry pricing considers these essential elements
Metal Costs40-50%
Current precious metal prices plus fabrication costs
Calculation Method:
Metal weight × current price per gram + fabrication
Key Variables:
Gold/silver spot price
Metal weight
Purity (14k, 18k)
Fabrication complexity
Gemstone Costs20-35%
Stone costs including cutting and setting labor
Calculation Method:
Stone cost + setting time × hourly rate
Key Variables:
Stone quality (4Cs)
Setting difficulty
Custom cutting
Stone availability
Labor & Skill25-40%
Design, crafting, and finishing time at skilled rates
Calculation Method:
Total hours × skilled hourly rate ($25-100+)
Key Variables:
Skill level required
Design complexity
Finishing quality
Custom vs production
Business Overhead10-20%
Studio costs, tools, insurance, and business expenses
Calculation Method:
Monthly overhead ÷ pieces made per month
Key Variables:
Studio rent
Tool maintenance
Insurance costs
Marketing expenses
Pricing Guidelines by Jewelry Category
Three Professional Pricing Strategies
Cost-Plus Method
Traditional wholesale/retail markup approach
Formula: Price = Materials × 2.5 + Labor + Overhead
Best For: Production jewelry, wholesale accounts
✅ Pros:
- Simple calculation
- Covers all costs
- Industry standard
⚠️ Cons:
- May underprice unique designs
- Ignores market demand
Market-Based Pricing
Price according to market comparables
Formula: Research + competitive analysis = price range
Best For: Common jewelry types, online sales
✅ Pros:
- Market-responsive
- Competitive positioning
- Customer expectations
⚠️ Cons:
- May not cover costs
- Race to bottom
Value-Based Pricing
Price based on perceived customer value
Formula: Customer value perception = price ceiling
Best For: Art jewelry, custom work, luxury pieces
✅ Pros:
- Maximum profit potential
- Rewards skill/design
- Brand building
⚠️ Cons:
- Requires strong brand
- Market education needed
Current Metal Pricing Considerations
Live Metal Prices (Per Troy Ounce):
Gold (24k)
$1,950-2,100
Variable daily
Silver
$22-28
More volatile
Platinum
$900-1,100
Industrial demand
Pro Tip: Check current metal prices daily and adjust your material costs accordingly. Consider locking in metal prices for custom orders with deposits.
Jewelry Business Success Metrics
Healthy Pricing Indicators:
- Materials cost ≤ 40% of retail price
- Earning $25+ per hour for skilled work
- 40%+ profit margin after all costs
- Customers willing to pay asking prices
- Repeat customers and referrals
Warning Signs:
- Materials cost > 50% of selling price
- Making less than minimum wage
- Profit margin below 30%
- Constant price objections
- Unable to increase prices