Daily Wire Tip Dec. 19: Selling Jewelry: Boutique Markup

By on December 18, 2010
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Daily Wire Jewelry Making Tip for
December 19, 2010

Question:

Lately I have been selling my jewelry at wholesale prices to local boutiques which buy outright, as opposed to commission. I am wondering what their % markup may be in general. I’m aware that markups will vary, but still wondering what typical markup range boutiques may use when they then sell jewelry. Knowing can help me with my pricing and helps to understand the market.

-Rosemary in Colorado Springs, Colorado

Answer:

Nice arrangement, Rosemary! Of course, the easiest way to see the type of markup done by your shops would be for you (or a friend or relative) to go in and look at the prices on your items.

Depending on the shop, keep in mind that their prices may seem quite high in order to have a margin for advertised sales, etc. To define some terms, if you sell an item to them at your cost/wholesale price and they mark it up exactly 100%, then they are pricing your items “keystone. ” If they mark your item up 200%, then they are pricing “triple keystone. ”

I could be wrong, but I don’t think there is a “standard, ” or any specific rules for a store when it comes to pricing.

I forgot to tell you all about some of the arrangements I have with galleries and gift shops. Most galleries take a 40% to 60% commission, so it is wise to mark your items accordingly, keeping within that area’s price points so they still sell and don’t just ‘sit there looking pretty’. One gift shop my work is in takes a 30% commission, but it is a no-profit organization.

When deciding to place your work in any location, here are things to consider (and ask if they are not forthright about them):

Do they cover good advertising; do they take care of returned checks and credit card fees; do they provide packaging and what type is it; are you allowed to have your cards with your work; do they have insurance to cover your percentage in case of fire, theft, etc; do they have a knowledgeable staff who can ‘sell’ your work; what type of display and lighting will your pieces be included in; do they take care of keeping the display clean and organized or are you expected to do it; do they have an agreement to sign that states the benefits and responsibilities of both parties (and anything else that you may have questions or concerns about).  These items are what the commission is going toward (besides the building rent, utilities, etc). Now, is what they require too high or just right?

Answer contributed by Dale “Cougar” Armstrong

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21 Comments

  1. avatar

    Beth Johnston

    December 19, 2010 at 11:11 am

    One boutique where I live took a $24 piece and marked it up to $125.00….and sold it! Others I have used only market up 20% and yet another one charges a monthly fee and takes 50% on commissions! Apparently there is no “standard” when it comes to making money. The only “standard” is that the artist will get the short end of the straw most times! I am also a painter and the same applies to any sort of art. The only person I know who makes any real money opened his own store, sells supplies and teaches classes. Sorry if I sound discouraging, but in North Carolina, that seems to be the norm.

    • avatar

      Dr. Doug Shearer

      August 28, 2013 at 11:58 am

      Concerning Navajo turquoise jewelry (e.g., bolo ties, sterling bracelets) – the shops around the plaza in Santa Fe, NM regularly mark up bolo ties purchased directly from the silversmith by at least 100% and up to 150-200%. Thus, it is wise to try and find a Native American artist under the portal at the old Governor’s Palace and deal DIRECTLY with that artist. Forget the tourist trap shops that flood Santa Fe, and by all means avoid the Arab-owned shops where much fake jewelry is sold. My advise: deal directly with an artist, unless you have far too much money and too few brains. In that case – spend whatever you wish!

  2. avatar

    Chris

    December 19, 2010 at 12:02 pm

    This is an interesting topic. I hope more people will chime in that sell to stores. I have been thinking about doing this, but can’t afford to sell any lower than I am online now.

  3. avatar

    JoAnn

    December 19, 2010 at 5:46 pm

    I could not possibly sell at wholesale and make any money. If I get into a store, I mark up at least 30%, but usually more. I always sell lots in a store, whatever they price at. But I sell to make money.
    JoAnn

  4. avatar

    Kathy Bloom

    December 19, 2010 at 6:16 pm

    I don’t think there is a standard either. I live in Illinois, Northwest Suburb of Chicago, and it seems that what you guys have experienced is the same here. The comments about boutiques is true. A more sophisticated/higher-end type of people usually frequent boutiques and have more disposable income to spend and will spend it. Your items will sell for much more in a place like that. On the other hand, try selling the same item at a craft show and it will sit in your inventory. People will even tell you it’s too expensive and try to talk you down. The key is to know the type of customer you are trying to selling to and make your items accordingly.

    • avatar

      dalecgr

      December 20, 2010 at 12:29 am

      Yes Kathy, I agree.

  5. avatar

    Anna Winter

    December 19, 2010 at 9:59 pm

    I really appreciate the knowledge that you share. Some friends and I are looking at placing some of our work in shops. We have agreed that we will not accept anything higher than 40% commission for the shops. One studio actually wanted us to not do any shows anymore if our jewelry was in her studio. Needless to say, we aren’t showing our work there.
    The finer points that you brought up I would not have known to ask about. We also are using your guidelines on the percentage breakdown for our inventory. We will not mark down our more expensive pieces, as they may sit or we can wear them or use them for gifts. Prices tend to be a bit lower here where we live, but some finer pieces do sell. Thanks again.

    • avatar

      dalecgr

      December 20, 2010 at 12:27 am

      One other thing to think about. Personally, I have arrangements with galleries and gift shops that with the exception of a special trunk show or benefit, I will not display or sell to another establishment within a 50 mile radius. This makes my work more exclusive to their customers, therefore more desirable to these shops.

  6. avatar

    Kristina

    December 19, 2010 at 10:54 pm

    I sell to a woman who has 2 boutiques. When I sell her a piece for 25.00, she sells it for 79.95. I also sell in a hair salon and am charged nothing. A consignment shop will take 50%. I guess it all depends on the venue. Hope this helps.

  7. avatar

    Jessica Young

    December 19, 2010 at 11:47 pm

    From my experience to make money selling through a boutique you have to research the local market and price your jewelry accordingly. If all your pieces are unique you can even ask outright what the shop would re-sell them for before you sell, I find that a boutique owner is not likely to lie about this knowing that you can come in and check on the price later. Then you may be able to work out an arrangement. In the end it’s really up to the artist to figure out what the local market is like, since each shop and each area are different. One shop I have sold in lets the artisans set their own prices and then takes 25% commission off the top. I’ve also sold my jewelry wholesale and have found that stores pay less this way to compensate for taking on the risk of the item potentially not selling, for example a they paid me $10 for a piece they priced at $20 but would have been willing to take only 35% on commission.

    As others have already said, it’s important to know what the commission is covering – a high end store with lots of bills and employees has higher overhead costs and will likely want to make more profit off your work. Knowing what you want to make for yourself and then knowing what the market price usually is will help you set your wholesale prices, don’t sell yourself short just to get something into a boutique shop. The shop owners are running a business, they’re not going to tell you if you could get twice as much as you are asking for your work, but they will mark up your work as high as they think they can.

    As for selling online versus in a shop, people are often willing to spend more when they buy retail (or are looking to get a deal by purchasing online). My website is now out of date, but my online prices were roughly the same as what I was willing to accept as a wholesale price – I figured that I was putting the same effort into the work and so I was making the same profit, if the piece sold for more because it was in a shop then the shop had earned that extra (of course, then the shop would look bad if they marked the item up 5X’s compared to the website price).

  8. avatar

    Deitra

    December 20, 2010 at 1:24 am

    I too appreciate your sharing the issues you mention above. It sounds like we all need to ask more questions of shop owners! When I have sold items wholesale, my sale prices have been based on materials cost times 2 so that I don’t feel like I am making them for free.

    I am very sensitive to not wanting to compete with a shop, yet I need the regular income from craft markets. What do you think about selling some of my more expensive pieces (hand fabricated sterling silver pendents and earrings) in a shop and designating them as my “Signature Series”? When I am at a craft market, I can include comparable items at the shop prices, and supplement them with less expensive pieces that seem to sell better at the craft market. This way I am not competing with the shop, I can advertise for the shop, and I can be free to sell a broader range of pieces.

    • avatar

      dalecgr

      December 20, 2010 at 11:03 am

      Sounds like a good plan Deitra. Keeping your specialty items just for a shop is a good idea, but you may also wish to include a few ‘ditsies’ for the folks who would like to purchase something that is ‘yours’ but can not afford the big one – – – yet. Something like a line of exclusive headpin earrings?

  9. avatar

    Joe Barela

    December 20, 2010 at 1:37 am

    Hi everyone, since I specialize in quality pearl products, I tend to only buy high quality and directly from the pearl farm, so I buy as low as possible and even beat the prices the local Craft Warehouse store buys their lower quality pearls for. This took a lot of research and time to accomplish. I am mentioning this because My minimum mark-up is 3.5 X’s my total cost and usually 5X’s the cost. And, at this ratio I cover all my costs and still make 100% profit. Also I make high end products and my prices always beat all the local big name stores, like Macy’s, Sears, etc, and I am talking about their 70% off sale prices not their retail prices. I do all this and word of mouth sells my stuff for me and customers actually come to my house. I just do home shows and occasional charity auctions. This is enough to keep me busy. I do not trust the local shops that keep going out of business anyway. U could loose your product if one files for bankruptcy. Later I will, again, try additional venues when the economy improves. Just my 2 cents…..JB

    • avatar

      dalecgr

      December 20, 2010 at 11:01 am

      Very nice to have found your niche market Joe – thanks so much for sharing!

  10. avatar

    Cassie Sirett

    December 20, 2010 at 3:03 pm

    I have my jewelry in a shop and they charge 20% commission. The owner of the shop is a friend of the family. I had several pieces that sold quickly I marked them at cost x2 plus the 20% commission and the owner told me to charge more because she could have easily gotten double what it sold for. It really helps to know the market where you are selling!

    • avatar

      dalecgr

      December 20, 2010 at 8:59 pm

      Oh my goodness Cassie! Let me get understand you correctly; you sell your items at twice the materials cost. So you make jewelry for fun and not for profit – right? Please do yourself a favor and read this article: How to Price Your Wire Jewelry. To me, even adding the 20%, you are still giving your work away.

  11. avatar

    Melinda Negri

    December 20, 2010 at 3:32 pm

    This topic is very interesting for me and timely, as I have been seriously considering selling wholesale in addition to selling at art shows and on my website. I confess that I am still a newbie, and hope that someone will share advice on a few questions:
    1. Am I correct in my understanding that the standard wholesale markup is 2 x cost of materials?
    2. Is selling through a boutique and selling wholesale the same thing with regard to price markup?
    3. From the previous posts I have read on this topic, is it the norm to sell online at a reduced price versus what one would sell an item for at an art show?

    Thanks to all for sharing your advice on this subject!

    • avatar

      dalecgr

      December 21, 2010 at 11:54 am

      Hi Melinda,
      Of course like any subject, each contributor will have his or her own opinions (hopefully based on experience and not theory). With 19 years of experience in this industry, here are my personal answers to your questions:

      1. No, ‘standard’ wholesale markup is not 2 times the cost of materials. You forgot to add in cost for labor and your overhead (utilities, rent, shipping etc). Also, with the price of materials fluctuating on a daily basis, is 2 times the cost of materials really enough to replace them?
      For example, if the material cost for a simple pair of headpin earrings is $1.45, do you really want to sell them at a ‘wholesale’ price of $2.90?? Try adding a minimum of $10/hour labor and now these 20-minute earrings are now at a wholesale price of $6.20. If you would normally sell these yourself for $15-$18.00/pair, then if you took a serious ‘wholesale order’ for 50 pair at $6.20/pair, would you happily make them?
      OR you could wholesale by multiplying your materials cost x 4 to cover everything mentioned above, plus $10/hr for labor. So now those earrings are $9.10/pr wholesale, and the store or catalog will sell them for anything from $20 to $30/pr. (Which should be your personal retail price too!) And if they are good customers, you now have a little room to negotiate your payment schedule. For example, if they pay in full ahead of time or within 30 days of placing or receiving the order, you can offer a 10% discount (an offer to entice them to pay ahead or at least on time).

      2. No, selling through a boutique/shop and selling ‘wholesale’ is not always the same thing. If you were to participate in a ‘wholesale’ show or catalog, then you would be looking to take orders for a selection or collection that you would be willing to mass produce for a per item wholesale price (such as the earring example above). When selling to a shop, most often the shop will either choose a selection of different items or ask you to send/drop off things that total a certain dollar amount, with their preferred price per item. Now you sell them items using the basic formula of materials x 4 plus $10/hr labor and the store will up this wholesale price any way they choose, including putting your work on sale if they choose, as they now ‘own’ these items.

      3. Keeping in mind that these are my answers and that there are many ways to perform any sales activity, No I do not think it is wise to sell your work at different prices in different venues that are advertised.
      For example: you have a business card with all of your information on it, including your website and store locations that carry your work. On your website is a druzy pendant priced at $65. You participate in a show and bring this same pendant that is now ‘show’ priced at $95. A potential customer comes by, loves the pendant but is going to think about it. They go home, visit your website and see that the pendant is less expensive on-line than in person. Why do shows? That customer will not be back to see you in person.

      Or you have a pendant in a consignment shop for $125. You do a show close-by and folks see a similar item ‘show’ priced for less than your ‘shop’ price. You are cutting off the hand that feeds your bank account ‘off-season’!

      The only time that I personally change any of my prices is when I am doing a show in a different area and then I price my ‘show stock’ according to that area’s economy—and certainly not anything that I have for sale in a shop, gallery or on a website! And I never put items ‘on sale’! (Most serious ‘art’ shows will not allow sales, show specials or discount baskets.) And yes, I have a ‘show stock’, a ‘gallery stock’ and a ‘shop stock’.

      Occasionally I browse the web, looking at wire jewelry and the prices, sometimes I see entire pages dedicated to items ‘on-sale’ or ‘discounted’. It drives me nuts! If the artist does not value their work why should customers? In my opinion it is ‘OK’ to advertise a ‘special sale’ during the year, for a couple of weeks, but not indefinitely! It’s also ‘OK’ to occasionally have a ‘close-out’ of items you are no longer going to make and would rather sell for the materials cost + labor instead of cutting them apart.

      OK, so this may be called a rant but bring it on! I am sure there are several folks who do not agree with me. So please, share your ‘experiences’ with us!

  12. avatar

    Connie

    December 29, 2010 at 12:03 am

    One thing that is nice is to do some research on having jewelry parties. Then you get full commission except the free amount you put and the persons extra prize if you get a booking. There lots of fun and you make a lot more money.

  13. Pingback: Wire Jewelry Idea May 30: Consignment Conundrum | Jewelry Making Blog | Information | Education | Videos

  14. avatar

    Robin Aston

    May 30, 2012 at 6:46 am

    If I put up a website to sell my items I don’t know how to put paypal, etc on it.

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