Are you pricing your product right?

At the end of my jewelry making workshops, I usually offered coffee and snacks to participants. This is the time when we did not talk about tools and techniques but about other tricks of the trade. One topic that often came up was pricing products. These eager participants who learned the art of making jewelry, eventually had dreams of starting their own business.
I loved stoking the entrepreneurial fire in them by sharing whatever little experience I had. So coming back to the question of pricing your products. Is there a set formula that they could use? I really wish there was! Honestly, every person will have a different experience with respect to their target group, mode of selling, finish of products and expertise. But it mainly depends on what you spend every day or every month. When I say spend, I am talking about time and money both. 
This includes buying raw materials, tools, actually making the jewelry, photographing it, marketing it, selling it directly or indirectly, managing accounts, shipping expense. Again, if you have hired space and people to grow your venture then those additional factors also have to be taken into consideration.
 
Does that mean you take into account every waking hour of your existence? Because that is what passionate entrepreneurs do, right? Breathe, eat, sleep their startup! Well, as I said there is no rigid rule. If you think your time and effort need to be justified, then include it in your costs.  
 
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But if it is of any help, a magic formula that I eventually created and that worked for me was 5x+n. Where ‘x’ is the cost of any tangible money that you spend in raw materials and ‘n’ is any number that you feel does justice to your product. 
So for example raw material for a pair of earrings cost me INR 20/-, I will sell it for INR 100 and above. The extra 80/- cover my shipping cost, packaging, branding cost, hours I spent designing, photographing, uploading pictures, responding to customers etc. Now I decide if I want to sell it for exactly 100 or for anything above that based on my instinct about the product. Some products that were unique than others were priced higher whereas some that were simple went at a lower price.
 
This is something you will eventually grasp as you learn the ropes yourself. What suited me and my customers may not suit you and yours. There are other ways you can optimize the price too but that will need another post. 🙂 
 
Finally, I would say give it a full-fledged try and you will enjoy the process irrespective of the outcome.
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