Do you charge too little?
This is a note I originally wrote to a facebook friend of mine who makes jewelry and re posted because I thought it would be useful for a lot of people.
So you are charging a per hour rate (while you are working on a piece) that you feel would be a fair wage if you had a “normal” job?
If you want to make a real living at jewelry (or any other independent endeavor) you need to consider that there is a lot of other stuff that goes into your craft as well.
Are you billing for time spent on Facebook? (Advertising) Billing for time spent talking to the client and designing the piece? (A genuine part of the time spent to “make” it!)
Do you bill for time spent doing accounting? (You have to do accounting if you are going to be legal and pay taxes and also have some clue if you are actually making money or not.)
Are you charging for the time it takes to talk to all the people who don’t buy anything? For answering all those emails? Charging for time spent receiving packages, packing up merchandise, filling out paperwork, going to the post office and shipping it?
Of course you can’t charge directly for most of these things, but the reality is you need to charge AT LEAST 3 times what you need to be making per hour when you are actually doing something you can charge for.
If you don’t do this in the long run you won’t be able to survive. In reality you should probably charge anywhere from 4-5 times a “fair wage” because at most 1/3rd of your time is going to be billable. It will probably be far less than that.
If you did have a “normal” job your employer would have to pay you for every hour spent at work no matter what you were doing. (Even going to the bathroom!) Since your employers are now your customers what you charge them needs to reflect all that you do, not just the small part that is working on their piece of jewelry. No one else is going to pay you for doing the other things…
A number of years ago I heard that an independent contractor (in any trade) needed to charge a minimum of $35/hour to survive (because of all of the costs and non billable hours that they spend on work related things). This was so long ago that no doubt inflation has this at around $50-$45/hour now.
Sure your overhead might be low, but you have to make a living or you aren’t doing anyone any good in the long run because you won’t be able to keep doing what you love and providing people with the jewelry they want.
A clue that you either don’t manage money well or that you don’t charge enough is if you never have money to buy any inventory for stock or the new tools you need.
Charge a fair price and accept that numerous people will always think things should be cheaper. They just don’t have a clue all the work, sweat and tears that go into it.