[Jewelry making - Article 00801] - Re: [Orchid] Price of a piece of jewelry

[donna williams more]

========[ Invite a Friend - http://www.ganoksin.com/invite.htm  ]========

    In the real world I am a comptroller - I have worked in many fields,
    real estate, manufacturing, retail. 

    Rule of thumb across all of these fields is that after you consider
    all of your Cost of Sales (all of those direct expenses involved in
    the manufacture/sale of a piece) and all of your Indirect Expenses
    (Office Supplies,  Advertising, what you typically think of as
    Overhead, plus those unexpected expenses everyone gets hit with) you
    should end up with a MINIMUM of 42% profit. 

    How to compute this: 

    ([Cost of Sales]+[Indirect Expense])X 1.42  So that if my materials
    and labor cost $50 and my indirect expenses are $25, I need to sell
    the piece for AT LEAST $106.50. 

    Always remember that "down time" is an indirect expense. 

    Since materials costs flucuate, I suggest always taking the higher
    cost.  If prices have recently come down, you need to use the higher
    cost you spent on the materials.  If prices have recently gone up,
    you need to take the higher price of your replacement materials. 

    42% is a minimum figure to shoot for, and it only works if you can be
    accurate in what your costs are.  Yes, there are many fine computer
    programs available, but I learned bookeeping the old fashioned way -
    a pencil, an adding machine, and a legal pad.  I honestly think that
    most small one or two person businesses would be best served by
    actually computing the numbers themselves. This leads to an
    understanding of the process, and highlights any obvious
    discrepancies. The McBee One-Write Systems are outstanding for this
    purpose.  As the business grows, then a computer program becomes a
    useful tool that is worth the expense. 

    This letter has grown out of control in length, but as I learn so
    much from Orchid, I would love to give knowledge back in my own area
    of expertise.  Anyone who wishes specific help or answers is free to
    email me directly and I will do what I can. 

    Donna Marie 

____________________________________________________________________
T h e   O r c h i d   L i s t
Open Electronic Forum for Jewelry Manufacturing Methods and Procedures
____________________________________________________________________
Orchid FAQ:
~ http://www.ganoksin.com/orchid/faq.htm
Orchid Archives:
~ http://www.ganoksin.com/orchid/archive
Orchid Galleries:
~ http://www.ganoksin.com/orchid/gallery.htm
Invite a Friend:
~ http://www.ganoksin.com/invite.htm
____________________________________________________________________
Tips From The Jeweler's Bench - Article Archive
~ http://www.ganoksin.com/borisat/tip_sear.htm
The Jeweler's Selected Bibliography List
~ http://www.ganoksin.com/jewelry-books
Buy Orchid Jewelry:
~ http://www.ganoksin.com/shop
____________________________________________________________________
-Unsubscribe:
-Email: orchid-request AT ganoksin.com Body=unsubscribe subject=blank
____________________________________________________________________