[Jewelry making - Article 00065] - Re: [Orchid] Calculating freight & labor costs for part

[Karen Goeller]

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Peter,

    If you buy 10 $10 items and pay $20 in shipping, the shipping cost
    per item will be $2. 

    If you buy 10 $1000 items and pay $20 in shipping, the shipping cost
    per item will still be $2. 

    As to your time in assemblage, since it seems that you're describing
    a "buy-sell" business (buying pre-fabricated items, assembling them
    by stringing onto chain or ribbon, then selling them), your labor
    costs should be fairly low. Take the hourly rate of your assembling
    workers (minimum wage?) and the total hours spent assembling, then
    divide by the number of pieces. 

    Your self-created PMC pieces, by contrast, should have a higher
    labor rate associated with them (higher skill needed = higher rate).
    You need to know how much time you've put into each piece. If you're
    doing them as a batch of 20 pieces, take the amount of time to finish
    the whole batch and divide by 20 to get the per-piece rate. 

    Don't forget to also spread the cost of supplies, advertising,
    travel/show expenses, studio space, etc. across all your work as
    well. 

    Now that you know the cost of each piece, your price is calculated
    by multiplying the cost by the profit margin you're going for (for
    example, 50%). 

    Make sense? 

Karen Goeller
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