EP387: How Much Should I Pay Myself As a Jewelry Designer
11:33PM Feb 8, 2023
As a business owner, you need to learn about things like breakeven points and the finances of your business. Because if you're not paying attention to that, you're going to be walking down a slippery slope. And if you're not good with money, like keep sliding into probably sliding into debt. Welcome to thrive by design, the podcast for ambitious independent jewelry brands, looking to profit from their products, get ready to make more and sell more doing what you love, without spending every single waking minute doing it. Hey, and if you're a creative fashion or product based business, I want to welcome you to the show. I'll be dropping big tips on launching, growing and scaling your business. So you could spend more of your precious time using your creativity to make money. You ready? All right, let's do this. Welcome to the thrive by design podcast episode 387. Hey there, guys. It's Tracy here, chief visionary officer of Flourish & Thrive Academy, the host of the show today. And I'm so excited to be bringing in some great stuff this week, because we just wrapped up our jewelry branded makeover bootcamp. And just like I do every single year, I'm gonna do a recap episode all about the bootcamp. The thing that was really, really exciting to me, though, is that we had an epic q&a Last week, and there was so much good stuff on there. And I know that since it was towards the end of boot camp, not a lot of people had a chance to listen to it, or download. And so I was hanging out with some of my coaches, Chelsea dawn, and one of our graduates of our Laying The Foundation program, Rosie, and we talked a little bit more about some of the questions that you guys had. So you're going to hear a little snippet from that q&a. And I think I'm going to be actually dropping some of these episodes. These asked me anything q&a is because I think they're super helpful. And unlike a podcast, you get to hear me kind of free real Whelan, I guess is the best way to put it. When I'm answering a question, like in our program or something like that, because I can go a little bit more in depth, as opposed to having something a little bit more structured, like doing like a podcast where I'm like kind of walking you through something step by step where I don't get to go as in depth. So today, we're going to be talking about pricing, how to pay yourself how to think about pricing, when you're trying to figure out how much you should incorporate into pricing for labor, and how that actually affects your pay. And then we are also going to be talking about mindset. So super great one, this is actually in response to a like one question, but it turned into a much bigger conversation, you're gonna hear me and Chelsea, and Dawn and Rosie talking about this, you'll hear us all in the background. And it's a great conversation. So we'll dive in in just a moment. But I do want to mention that we are wrapping up our cohort for Laying The Foundation for 2023 as we're doing it as a cohort. And we're really excited for this group that is getting started. Today, actually superduper fun. And we're doing our kickoff call this afternoon. So if you missed out and you're still wanting to squeeze in, then reach out to us over at support at flourish & thrive academy.com or head on over to flourish thrive academy.com, forward slash LTF. And let's not wait another year for you to get the results that you want in your jewelry business. Now, at the beginning of the year, I made a statement that I wanted to help 1000 jewelry business owners grow their business by 100k or add an additional 100k to their annual revenue. So if that's something that you would like to be a part of, please reach out to us because we'd love to support you in that. We have amazing programs over here. So if Laying The Foundation isn't the right program for you, if you're kind of in a more advanced stage of business, we have our momentum program, and also one on one custom coaching. So we would love to support you in that. And I'm just super excited with some of the things that are happening right now in our community because it's awesome. And we just welcomed an amazing group over 170 people at the time, I'm recording this podcast into our Laying The Foundation program. So I'm super excited. I'm hoping that by the time this episode goes live, we have 200 people on there, and we're going to crush it. So all right, without further ado, let's dive in to this q&a. I'm starting to work with gold filled when designing and creating my pieces. How does one go about pricing? Do you weigh the piece? Measure the piece I've been using $5 for 15 minutes for my labor and that is insane. How do I get myself over this hump? Okay, this is your making this question really complicated. What you need to do is to clearly identify what the cost of the materials that you're using for the piece. Sure if you want to do that by weighing the piece at the end, that's fine. you time yourself making the piece figure out how much time it takes to make and then you would incorporate a lay rate based on the amount of time based on the type of task it is. So the thing about pricing is in labor is this and it's a big mistake I've spoken about this many times during the bootcamp is unless you're someone like Chelsea and you have labored workers working for you, and they are getting paid an hourly rate, and you figure it out, like what they're making an hour. And that's like, kind of what is incorporated? Basically, what you would do, like, for instance, what I if Chelsea was asking me this question when she doesn't need to ask me this question anymore. But let's say just, let's say that she was paying her people $20 an hour, I don't know what she pays her people, but let's say she's paying them $20 an hour, they're making all the jewelry, there's always gonna be a little bit of extra time that is not span that she's paying for them. So what I would probably do is like, inflate that by a small percentage, for whatever it takes, or costs to make that piece of jewelry, incorporate that time segment into the piece of jewelry. And then that's how you get you identify your labor rate. For people who are making their own jewelry, though, I see people saying like, Oh, I incorporate $50 now or I incorporate $20 now or I incorporate $100 an hour. Well, that doesn't really make sense, because a lot of you guys are all making jewelry, that doesn't require a $100 an hour bench jeweler to make it. So the way that I if you're making all of your own jewelry, what I would recommend that you do is that you understand what the market rate for that kind of labor is in your local area. Like if you were to hire someone else to do that, what would you have to pay them in order to do that, to make that piece of jewelry. So when I design a piece of jewelry, because everything's custom, I already know how much labor is going to be up front, because we do estimates with the jewelers. And they tell us we have a price quote, I incorporate that into the piece. My jewelers charge like anywhere from 40 to $100 an hour but they are working on very expensive fine jewelry pieces. And we you know we have it dialed down like for each stone set, we know the price it's going to be for each stone set. Now if you're making handmade jewelry, and there's stuff that's like hammered and soldered, and it's made primarily out of wire like that traditional look that we see a lot of people making that kind of stuff, you could probably hire a bench jeweler for 20 to $25 an hour. That's just like what because it's not advanced bench skills. It's more basic mental skills. And like, I just know from general market rates unless you're in a really expensive place to live. That's what you would pay someone to do that kind of work most likely. In general, like there's always exceptions to the rule. So you might say, Tracy like in my market, we have to pay people $30 an hour, well then incorporate $30 an hour, I'm just giving you the general gist. But don't think of yourself as someone who is a $50 $100 or a $20 an hour wage earner. Sure, eventually, you want to get to a place where you're paying yourself a regular salary, I know that that's not always the case. And more challenging to do if you're not already doing at least $100,000 in your business, that your sales are going to be up and down. Some months are lower, some months are higher, unless you're really good at budgeting. I know some people here are and they can, you know, estimate and project what their sales might be. They're good at budgeting all of that stuff. Until you get to that point. What I want you to think about is what do I need to sell in order to have enough profit to pay myself the salary that I would like to make as a business owner, one of our earliest students, she's not making jewelry anymore, but she had a stack she used to get stacks of orders like Chelsea did her name is Melissa capillary. She came in and coach for us for a while. She is a former teacher, she went back to teaching but just in a different way. And she just had a baby, I found like an old post that she did in one of our groups and she's like, had this massive stock of like 108 orders or something like that. I remember when she first took Laying The Foundation, she's like, I cannot believe it. Like I like I was giving myself like one more shot. And then I was gonna go back to teaching. And she's like, after learning all of this stuff, I was able to start paying myself like $1,000 a month and then I was able to replace my teaching salary and then this and then this. So what I will tell you is if you set that goal and target for yourself, and I know that this question was about pricing, but it's really about the bigger picture because pricing plays so much into everything else that you do in business, that having those targets and like an understanding of what needs to happen. From down to the granular level of how you're pricing your jewelry will make a big difference and how much money you make in the long run. Does anyone at Chelsea Rosie or dawn Do you guys have anything that you'd like to add to that or how you figured out how to pay yourself because I think that that might be a helpful something for anyone. Chelsea you might be a good person to talk to this.
Yeah, so I basically use a method like what you were saying we we have like a little calculator that we use to do down per piece what they're getting paid. But honestly, I read that book Profit First, like years ago. And that really helps me with like a better mindset on stuff. I mean, I, at this point, I pay myself whatever I would like to pay myself. And every time I go on a trip, I figured out how it's a write off, so I can travel more. But when I first started paying myself, I was like, if I was if I needed to go out and get an actual job, would I take the job if it was paying me this amount of money? And if I said no, well, then I'm not paying myself enough to do my to do my business. Like a lot of people. For some reason, when they're thinking about it as a jewelry business. They're like, well, I just need to pay myself $10 an hour. But Chick fil A pays more than $10 An hour like no, I mean, yeah, Chick fil A pays 1850. Like at least pay yourself what you get paid to make a chicken sandwich, you know? So you just have to think of it that way. If somebody like my mindset is, if somebody else offered you this as a job, would you? Would you take that amount of money? And if your answer is no, well, then you need to figure out how you can pay yourself more money. So most of the time, it's gonna be you're gonna need to raise your prices. But if you wouldn't meet them, if you wouldn't take that dollar amount from somebody else, then you need to have a little pep talk with yourself about what an acceptable dollar amount is.
That's so true, Chelsea, I love that. And the other thing that I want to remind you is that as a business owner, you need to learn about things like breakeven points and the finances of your business. Because if you're not paying attention to that, you're gonna be walking down a slippery slope. And if you're not good with money, like keep sliding into probably sliding into debt. And so we teach you those skills as well. We get it kind of upfront. It is like an ongoing concept. So we tried to bring another support, like, as we you know, in the diamond insiders community as an ongoing thing, we would do it more intently in our momentum program. But these are important things to think about as you're growing business, and move on to the next question. So I incorporate a lot of different stones in my jewelry, often three to four stones within one piece, how many types of stones should I use in a collection before it starts feeling random? Well, that depends on your design aesthetic, because I don't, it's really hard to, to answer a question like that without visually seeing something because I don't necessarily think that there is a right or wrong answer. I mean, you could potentially make a rainbow of gemstones and have like seven stones in a piece of jewelry. But I think it's really about the design perspective point of view and how it looks like I wouldn't put a boundary like that on something without seeing it. I mean, design and aesthetics, signature style, all that stuff is very visual. And it's a learned skill, like you can. And this is this is something where it's like, there are certain types of jewelry making that are really, really common. Like, you know, a lot of people make beaded jewelry, a lot of people make things that are cold fusion because it's easy to get off of the ground. But how are you putting your signature on that stuff. So Chelsea is a great example. I mean, all of the ladies here are a great example of how they've developed a signature style. They've been done with her precious metal, clay and Rosie with her nature inspired jewelry and all the things that she's doing. The thing that I want to that I would say though, is like there's a lot of people doing a lot of things. It's how you make your brand your own that really makes your brand your own. And like someone like Chelsea, a lot of people do beaded stalker bracelets, but the way that she presents it and develops her brand, like even from the way that it goes into the box, like is so unique and Don's perspective on metal clay. It's like the personalization. And some of the things that she does, are really like unique to what she does, etc. So that's how I would really be thinking about design and color development. I mean, even when I started out my first business, like it was all my first jewelry company like the early stages, the early designs, and even actually, if I think about it throughout the entire scope of that company for 11 years, it was all around color stories. And sometimes we had like, six different stones and a color story, you know, and how we would mix color together. So that's that's your own take on it. There's no right or wrong way.
I did have one other thing that I wanted to add really quick. A lot of the time like I do something super basic, that'll like literally anybody could figure out how to do like it's not complicated. Our lifestyle photography is what sells to our customers. So I think a lot of the time you can get really creative and mix in different like materials and mediums and make things that aren't necessarily like looking like a full collection as long as the way that you're conveying the lifestyle behind your products actually makes sense as a whole. So like say if you it's all beachy type vibe if all of your photos convey that then you can mix in different element and sometimes do you stones? Or do you use resin like etc It just needs to as a whole makes sense for branding. That
is where creating a desire brand comes in this is this is Chelsea's desire brand effect because she has created something that for most it's like some of my look at like an Instagram post and be like, Oh, it's beaded bracelets, but she sells $20,000 On Friday, like almost every week of beaded bracelets guys like it's like, and other stuff too. But like, Do you know what I mean? It's just like, but she's built a business for 14 years on a concept that she just keeps repeating. Because she has a brand. This is how she is standing out in saturated jewelry market. And she doesn't have every customer but she has a crazy loyal following like insane so and that's all you really need is people who keep coming back, right? So that I thank you for adding that in and and Rosie and Don interrupts anytime you want to throw in a tidbit too.
I just wanted to say like when Dennis and I go to shows, my husband is like, we're like, total opposites. Because I'm very shy and reserved. Yeah, he's like, out there. Kind of like, you know, the cow that just comes crashing and everything. That's how we built our brand is people come to our booth. And they know what we're all about by looking at our jewelry and listening to things that we're talking about with our people. And that was kind of an eye opener for me one time when we were at a show. And this lady from this organization was so taken by us because she saw everything in action like Dennis talking to somebody who suffered from depression. And this lady actually was going to go home and kill herself. Yeah, it was like the weirdest ordeal. Like because we stopped and talked with her. And the people surrounding in our booth. It was like incredible. But it definitely showed the people that we stood behind our brand. And we weren't just like putting symbols and words on our jewelry, just to make the sale we really felt for the people. So that was quite an experience that day. Wow. Yeah. It's crazy.
That's insane. Thank you for sharing that dawn. Gosh, I'm like, you save someone's life.
Yeah, it was really does talk to her for about 15 minutes, he finally pulled her aside, it was crazy. And we have a lot of stories like that, you know, because we're interacting with people. And that's like a lot of the stuff that we learned in Laying The Foundation, building relationships. And your brand isn't just about the boxes and the bags and your logo, a lot that goes to it.
It's the humans behind the brand. Yeah, definitely Don is and I just want to keep saying this. For all you shy people out there for all you introverts. Don is a complete introvert and she has a very successful retirement lifestyle business that supports like, what matters to her. And I think that's the key that I always like to drive home, I talk about six figure businesses or million dollar companies all the time, just because numbers are tangible to me. And I'm also very goal oriented. So I like to make money, I also like to stretch myself to try and hit something like that. And so to me, if I'm operating out of my mindset, like I'm like, Okay, well, what is going to sustain my life, but then I realized at a certain point, that and I say sustain my life, like the kind of lifestyle that I want to live, then I realized at a certain point, it didn't necessarily have to be a bigger business, it just had to be either more efficient or more profitable. And that's the big lesson that I came away from the second time around is that I had a much smaller business, the sales were a fraction, or like a quarter of what I was doing in my company where I was selling like million dollars a year, higher price point, less work, no overhead, like I took home most of the money, that was the profit. So it you can have any kind of business that you want. It's really about getting clear about what you're trying to create. And then you can reverse engineer that and build the business around the lifestyle that you want. And that's like if anyone gets I mean there's so much that you guys are bringing that I probably wouldn't even have said it's like I've just like feeling so in awe of like what you guys have create all of you have created
which is amazing.
I would just add on that to what you said like you're not just adding the symbols to making a sale you're doing what really matters to you. And I'm the same to me there's there's certain things that are important to me, giving back The community is a huge one for me. And it comes back to you like I'm not doing it. You know, I'm doing things that I really want to do, like I made a not for profit design, specifically for the Canadian comfort support society. And I just had one of surgeons admin, buy one from me, and say that she's going to this big retirement party for one of the top surgeons in Canada, and she wants to make sure she gets it to be able to wear that event. You know, like, that's amazing exposure, I didn't make that pendant for that exposure. I made it because that organization is near and dear to my heart. My son was born with club feet. And I wanted to give back to that community so that everyone can afford to have treatment for their kids who are born with that condition. Just you know, like, do it from your heart, and the rest will fall into place I absolutely live for like when I get thank you cards from customers, I will do a happy dance around the house for date. It is the best feeling.
I love it. I love that. Thank you so much. Gosh, and I've seen like all these people commenting about their experience with Laying The Foundation in the chat too. There was one I wanted to read out. And he says, says, Chelsea, you're inspiring me, I have and then there's lots of comments about the rest of you too. But like, I just want to say this. I have a lower price point to I can't believe what's possible. And Annie said, This is why I love LTF you can be a fine jeweler or doing beaded bracelets. LTF works. I'm starting with round two with it. Awesome. Okay, cool. And then Amber's saying I love people. And I love opening my heart chakra and letting people see what purple girl designs is all about. I love that. And so exciting, Rosie, great mindset. All right, thank you so much for listening to this. Ask me anything q&a, all about pricing, paying yourself, what that really means how to be thinking about your pricing all the things. And yeah, I'm excited about it. Now I know a lot of you participated in boot camp, we had over 8000 people registered for the jewelry brand makeover boot camp and our masterclass how to stand out in a saturated market with a timeless jewelry brand. And I was really excited about that. That's like some of the top numbers we've ever hit, quite frankly. And we had over 3000 people in our Facebook group, which has been unusual in the last few years because people have been kind of making this mass exodus away from Facebook, we had like sometimes almost sold out zooms, meaning we had a very close to 1000 people on each zoom, which is really huge for our community that's as small as mine. So I am just honored and thrilled that you guys were showing up for your business and doing all the things. And I'm very excited to be welcoming such rockstars into this program who are taking their business to the next level and doing some great things with it. Now with that being said, I know that a lot of you participated in boot camp and you decided not to join us for Laying The Foundation for whatever reason. And you might be listening to this show. So if you're listening to the show, I would love to ask you a favor. Could you give us a rating and review for the podcast and just let us know what you think. Obviously a positive rating and review is ideal. But I'd really love to know your opinion so that we can keep putting out great episodes that you enjoy that you want to hear about and all the things this kind of is like to me like a reciprocity. You know, we put on a lot of free out a lot of free stuff, including we worked our asses off excuse my language for this bootcamp, and it's hard for me to ask for favors but if you wouldn't mind giving us a rating review. Or if you've read my book, and you bought it on Amazon, please give that a rating and review because it helps us get in front of more jewelry business owners just like you. Thanks so much for listening to the show today. This is Tracy Matthews, signing off. Until next time