Question:
I'm just starting my own business and found the information you provided regarding pricing quite interesting. It leads me to two follow up questions. You talk about markup being 5-6 times cost (of both materials AND labor). Is there any formula that you are aware of that people use in determining labor? It seems like this could be very much open to a person's whim as to what their feel their time is worth . Also, if you had materials costs of let's say $15-20 on a necklace, that retail price would be $75- 120 (using your 5-6X) BUT that doesn't even include the labor part of the equation. Am I understanding your concept correctly???

Answer:
The first part of your question is about figuring labor cost. Rather than trying to put a value on your time, it is easier and more accurate to figure what you could pay someone to make the piece. If you figure $8 per hour and it takes 30 minutes than your labor cost is $4.

In your example if your materials cost $16 and labor $4, your total cost is $20 and ideally it should sell retail for $99 to $119.

The amount that an item will sell for varies depending upon where you are selling the item. The same piece in the example above could sell for $200 in a boutique or upper end department store and only $30 at a swap meet.

You need to consider where you are going to sell your jewelry when you make it and adjust the materials that you use to match the venue that you are selling at.