Starting and Running a Jewelery Business

Number of people have been talking to me about selling their jewelry creations and starting a business. I’ve been asked questions, such as:

- “My co-workers love the jewelry pieces I make for myself, and they want to buy them. How much should I charge?”
- “To afford my jewelry making addiction I must start selling some. What should I do?”
- “How do I figure my costs and selling prices for my jewelry?”
- “A woman told me that she would pay me my costs and she will wear my jewelry for people to see and I’ll get a lot of business. Is this how I should start my business?”
- “What jewelry supplies can I buy with out paying the sales tax (California)?”
- “My hairdresser has offered to sell my jewelry in her salon. She will display them and pay me after she sells them. How much do I charge? Do I need a written agreement? Who is responsible for the sales tax? Help!”
- “How can I make sales and charge the prices you (me) tell me to charge?”

MY BACKGROUND
I design and make beaded jewelry that I sell at fine art shows, through boutiques, and to a network of clients. I have run “hobby based” businesses for more years than I want to count. I am hired as a consultant on designing and making beaded jewelry, plus the promoting and selling of that jewelry. I am an active member in the L.A. Bead Society.

I used to teach a class at UCLA, and other schools, on running a “Hobby based” business. I toured the country lecturing on this subject, and people hired me as a private consultant. A number of years ago, my own business was audited by the California State Board of Equalization (the sales tax people) and I came through without a discrepancy or penalty. So, I think (and many other people agree) I know what I am talking about.

Let’s start off with a couple of quotes that I think are pertinent.

“…(Charge) all the market will bear.” Ambrose Bierce
“Make your own myths. That’s the way the gods started.” A famous philosopher from Poland.

PRICING YOUR WORK

A basic rule:

YOUR MATERIAL COSTS X 3, + YOUR DESIGN & CREATION TIME, + “NAME RECOGNITION”, + INTRINSIC VALUE.

YOUR MATERIAL COSTS:
Base MATERIALS COSTS include: Beads, findings, pendants, stringing materials and/or wire, packaging, and anything else included in the final delivered product. If you are able purchase supplies at a one time reduced price, it is best to use the regular replacement cost of those supplies in your calculations. Remember, your client might ask you to make duplicates, at the same price.

Secondary MATERIALS COSTS include:
Time and expenses incurred in finding and selecting your base materials (time, car mileage expenses [more than $.65 per mile1], parking, meals, etc. or time, phone and/or internet charges, shipping charges, etc. Add to this, credit card or bank interest/fees, and anything else involved in the procurement of your supplies. If you had an assistant do this work, add this expense, too.

[Hertz study over 15 years ago. Includes: gas, oil, tire wear, general wear & tear, depreciation, insurance, etc.]

YOUR DESIGN AND CREATION TIME:
How much is your time, vision, and expertise worth? When a person purchases your creations they aren’t just buying the raw components (they could do this them selves). They are, in fact, purchasing your vision and expertise. They buy it because they love what you did with those basic components. As an example, Pablo Picasso applied his vision and expertise to a few dollars worth of paint and canvas to create his multi-million dollar masterpieces.

Again, how much is your time, vision, and expertise worth? I’ve heard all of these excuses. “My time doesn’t cost me anything because: ‘I’m not very good’; ‘I do it in my free time’; ‘I’m retired’; ‘I just love to see people wearing my creations’; ‘I just love making jewelry and don’t care about the money’; ‘I don’t feel it’s right charging people for my time’;” and so on. BALLONY! No matter what, if your creation is appreciated and worthy of your clients’ purchase, your time, vision, and expertise have value, and you should be rewarded.

Where do you start? If you feel you are worth $12.00/hr., “minimum wage”, or less, you might as well get a job at McDonalds, or the like, where you can earn a steady income, receive benefits, and have no business expenses. Jewelry and clothing designers/creators I have talked to said their hourly fees run between $25.00 and $75.00/hr. (& more). In a survey of self-employed people, crafts people, home based business people, consultants, etc. $25.00 tends to be the lowest hourly fee. If you call a plumber, mechanic, computer consultant, phone repairman, or the “Maytag Repairman”, you’ll be quoted a fees starting at $25.00 or more. So, in your calculations, I suggest a very reasonable minimum hourly rate of $25.00.

In reality, you must also consider a few more (hidden) factors in figuring your true expenses. They include, your: “Costs of running your business,” “Costs of promoting your work,” and “Costs of selling your creations.”

Costs of running your business:
These can include: ·Tools; ·Displays; ·Stationary; ·Cards; ·Licenses; ·Professional insurance policies; ·Returns; ·Repairs; ·Workspace (a room or space set aside for your work and storage); ·Lessons and classes; ·Bookkeeping or hiring a book keeper for your business and taxes; ·Sales forms; ·Charge card services and machines; ·Bank services and fees; ·Furniture; ·Maintaining stock and supplies (your money tied-up); ·Business publications; ·Telephone expenses; ·DSL line; Computer and peripherals; ·Close-up camera and lights; ·Postage; ·Delivery; ·Packaging; ·Auto mileage expenses; ·Extra electricity expenses; ·Employees or assistants (with employees come taxes, unemployment, and workers-comp insc.); ·Donations; ·Samples; ·Wear and tear; ·Depreciation; ·Etc.; ·and don’t forget the time it takes you to run your business (if you were someone else’s employee, you’d be paid for this time).

Costs of promoting your work:
Promotion expenses can include: ·Photos; ·Brochures; ·Web site and links; ·Yellow pages; ·Contests; ·Advertising; ·Donations; Etc, plus your time.

Costs of selling your creations:
Venues: Direct retail sales: Open a store; Art and Craft shows; Flea Markets; House parties; Mail order
catalog; “Trunk shows”; Internet sales; E-Bay; Wear your creations at your “9 to 5” worksite and sell them; Etc.

Wholesale to other retailers: Retail stores; Boutiques; Galleries; Beauty salons; Internet stores; “Blended stores”; Etc.

Retail: Open a store – Check with your local SBA

Art and Craft shows, Flea Markets – Venue guide (publications); Tables, Canopies, Table covers, Display pieces, Signs; (Wear and tear on everything); Business cards; Sales books; Packaging; Charge card services and machine (some, plus “air time”); Liability insurance; Booth entry fees; Judging fees; Application package; Donations; Auto mileage fees or truck rental; Hotel (if out-of-town); Food & drinks; Helpers fees; Theft and breakage; Etc.; and don’t forget, Your time has value.

House parties and “Trunk shows” – Tables; Table covers; Display pieces; (Wear and tear on everything); Business cards; Sales books; Packaging; Charge card services and machine (some, plus “air time”); Liability insurance; Theft and breakage; Hostess gift or fee; Auto mileage fees; Etc.; and don’t forget, your time has value.

Internet sales and E-Bay – Computer and peripherals; Site design fees, DSL line; Digital camera and lights; Backgrounds and displays; Packaging; Delivery; E-Bay fees; Hosting fees; Domain fees; Invoices; Charge card equipment and fees; Telephone charges, Sales forms; Employees (+); Etc.; and don’t forget, your time has value.

Mail order catalog - Computer and peripherals; DSL line; Digital camera and lights; Backgrounds and displays; Printing; Packaging; Delivery; Invoices; Charge card equipment and fees; Telephone charges, Sales forms; Employees (+); Etc.; and don’t forget, your time has value.

Wear your creations at your “9 to 5” worksite and sell them – Nothing; OR, Sales forms; Charge card equipment and fees; Your employer is paying for your time.

Wholesale: Retail stores; Boutiques; Galleries; Beauty salons; Blended stores. – Wholesale discount % ; Sales forms; Sales product sheets; Auto mileage fees; Packaging; Delivery; Displays (sometimes); Travel fees and hotel (sometimes); Blended stores might require you to spend some hours in the store; Etc.; and don’t forget, your time has value.

Consignment: Retail stores; Boutiques; Galleries; Beauty salons;–
Same as Wholesale, except a lower discount rate, and a special consignment form to protect you and make sure you are paid and/or retrieve unsold merchandise.

This ends the majority of your basic expenses.

BASIC RULE IN VALUING COST:

There is another factor that must be considered in developing your own retail prices. If you sell your creations through agents and/or retailers, they will be expecting one or more of the following; a wholesale discount or a consignment discount, plus (perhaps) an agents’ fee. Also, if you give a discount to any of your friends, relatives, and/or retail customers, you must take this into account, and build this into your retail price. Otherwise, perhaps unknowingly, you will lose money.

This is part of the reason our “BASIC RULE” states:
YOUR MATERIAL COSTS X 3 (at least) + YOUR DESIGN & CREATION TIME, + “NAME RECOGNITION”, + INTRINSIC VALUE.

Before I discuss figuring your own value, I’d like to show you a few examples of bead jewelry pricing I have seen:

1) A few years ago, in Honolulu, Hawaii, I visited the jewelry department in the famous, high end, Texas based, department store. I saw beautiful, and exquisite, jewelry created with gem beads. The price tags on the jewelry were what I would expect of such a fine store. One necklace, in particular, stood out in my mind. It was a 17” necklace of strung jasper nuggets with a sterling clasp. The price tag was, approximately, $600.00. The basic cost, of all components, would have been around $10.00. While I was there I saw three gem bead necklaces sold. No one tried to negotiate the price.

2) Last year I was in the Beverly Hills (CA) branch of a famous, high end, New York based department store, and, of course, I visited the jewelry counter. Again, I saw beautiful, and exquisite, jewelry created with gem beads, and, again, the prices were consistent with such a fine store. Here two necklaces caught my eye. The first, by a “famous designer”, was created with polished (fragile) calcite crystals, strung with a silver clasp. Tag price, around $500. Components cost, around $12.00. The second necklace, also by a “famous designer”, was created with African, sequin like, thin vinyl beads strung with a 14k lobster claw clasp. Price tag - $600, materials cost – around $35. While I was there, I saw a number of people being shown, and purchasing bead jewelry. No one tried to negotiate the price.

3) Last year I was at an Arts & Crafts Show in Los Angeles (venue fee = $275) where I saw a lady selling beautiful, gem bead necklaces. She had them priced between $35 & $50. Her materials costs were between $15 & $20. As I watched, some people looked at her jewelry, a few made offers, and all passed on. I heard one old lady offer her $20, and she turned her down.

These are examples of some common extremes in pricing. They show how designers with very differing ideas of self worth figure their selling prices. It is important to take into account that the designer in case #3 was selling at her retail price. Where as, the designers in cases #1 and #2 had sold their jewelry to the stores at reduced, wholesale prices. I have heard that these stores mark up their jewelry approximately 2 ½ times.

Based on a 250% mark up, the necklace in case #1 wholesaled for $240, case #2a wholesaled for $200, and case #2b wholesaled for $240. As you can see, even at their wholesale prices, these designers are making a good profit, and, people are buying their jewelry, too. Of course, these designers are aiming at “higher end” clients. If you were to compute your direct sales prices using the same creation value and mark up system these designers used to compute their wholesale prices, you could sell your creations for 60% less than those “big name” designers, receive a reasonable income, and still have a small discount “fudge factor” to work with.

By the way, while at the same Arts & Crafts Show as case #3, I saw another person selling gem bead jewelry for considerately higher direct “wholesale” prices. One $2000 necklace caught my eye. It was a multi-strand Ruby nugget necklace with a 14k clasp. I recognized the ruby nuggets, because they had been purchased from our parent company. The total materials cost for that necklace was $250. As I watched, there were a lot of lookers and a few buyers, too. The designer offered to sell me the necklace for $1500.

Now let’s discuss your own value as a designer/creator of your jewelry. In part 1, we said the “buyer is purchasing your vision and expertise” (including your invested time), not “just a piece of jewelry.” So, what are your time, vision, and expertise worth?

Before I go any farther, I have received a few comments on my statement, “hourly fees run between $25.00 and $75.00/hr. (& more).” I was told that hourly fees should start at $50.

Here are a few things to look at to help you figure your “basic billable hourly fees.”
· If you have (or did have) a regular 40-hour/week job, add up your hourly wage , plus of all your benefits (medical, over-time, advancement, paid vacation, company discounts, social security, retirement plan, education, etc.). This is your low base.
· How much do others receive for the same job, designing and creating jewelry?
· Figure your monthly comfortable income needs and divide by the number of billable hours you can work in a month. (Your income needs must include paying for the Costs of running and promoting your business and the benefits you would receive if you were an employee).
· If yours is only a part time business, for “a little extra income”, use all of the above as a reference, and don’t forget, your time, vision, and expertise are very valuable.

NAME RECOGNITION:

Here in L.A., I have met a number of people, who have NAME RECOGNITION in other fields, who, talented or not, have started their own jewelry business. Some of these designers are in the entertainment or fashion industries, and others just have a ton of “Chutzpah”. These “celebrities” seem to have influential friends, connections, and entrée. They are able to open their business “with a splash”, have “Beautiful People” wear their jewelry, get their creations in the best venues and fashion shows, attract the press, and charge high prices. But, if the celebrity designer’s jewelry doesn’t catch on, or live up to the hype, their businesses will close and their reputations might fall.

NOW LET’S TALK ABOUT US, “REGULAR PEOPLE.” Most “regular people” seem to feel: a) they have no name recognition, and 2) they aren’t as good as those celebrities. Well, you might not have International Name Recognition, but you might have Local Name Recognition, plus, you can always create a Name. Remember, if a celebrity fails, their reputation falls, too, and it’s hard for them to recover. Where as, “regular people” have nowhere to fall. As to, you not being “as good as those celebrities”, that’s nothing more than your fears and insecurities. If your work is good, or better, you deserve recognition, and the money that goes with it.

HOW DO YOU CREATE NAME RECOGNITION? First I’ll repeat a quotation from Part 1 of this series. “Make your own myths. That’s the way the gods started.”

Virtually, all celebrities and corporations have publicity agents whose main job is to produce NAME RECOGNITION for their clients. They do it by keeping the client’s name and products in the public eye. By following their methods you, too, can develop your own NAME RECOGNITION. So, let’s develop your fame and recognition.

Publicity: Send out little “News Releases” to your local newspapers, etc. Don’t forget the little neighborhood papers, as they are always looking for news about local people. Radio and TV stations also like to do features on successful, local people. If you have designed some special jewelry, send releases and photos to national publications, especially craft, jewelry, and fashion publications. Collect and show copies of the articles, your Releases generate, to help justify your importance and value.

Here are a few subjects that warrant publicity:
* The opening of your business.
* Your jewelry will be included in a fashion show or trunk show.
* Any awards or recognition for you and your jewelry.
* The placement of your jewelry in a boutique or gallery.
* Any famous people (local or national) who own, or are wearing your jewelry.
* A bio on how you started a “Small Business”.
* A special element or process in your jewelry.
* Any classes or demonstrations you are giving.

Magazine articles: Submit ideas or Write:
* “How to” articles for craft, jewelry, and/or bead magazines.
* “How I started a (ex. home based) small business for Small Business; Entrepreneur; Woman’s; Craft; etc. magazines.

Exposure: Placement of your jewelry where you can receive exposure and/or recognition. These can all generate “News Releases.”
* Enter art shows, exhibitions, and contests.
* Arrange for a local newscaster to wear your jewelry.
* Have your jewelry worn in magazine and newspaper fashion layouts.
* Volunteer your jewelry for fashion shows.
* Have your jewelry worn by fashion manikins in local store windows.
* Volunteer to teach jewelry classes at hospitals.
* Make presentations at local service club lunch meetings. (Rotary, Lions, etc.)
* Donate a piece of jewelry to a (high end & high visibility) charity auction.
* Presentations on TV Craft, Women’s, and/or Business shows
* Place your work in the most “In” boutiques.
* Produce a web presence and links.
* Produce a sales brochure, with photos.
* Purchase ad pages in advertising books aimed at selling crafted jewelry.

You, too, can become a famous jewelry designer, but first develop your vision and your craft. Before you’re famous, you can make mistakes, without repercussions. But, once you are famous, and have NAME RECOGNITION, poor design and craft errors can be disastrous.

Other components of NAME RECOGNITION include:
· Distinctive packaging. ie. Tiffany’s blue paper box.
· An individual, classy Logo or Logotype. Hire a great graphic designer.
· A Logo tag on all jewelry pieces.
· Tie in signage, stationary, business cards, brochures, etc.
· Produce a “Look” to your displays.

INTRINSIC VALUE IN PRICING OF YOUR WORK:

The intrinsic value of the gemstones, and other components, you use, should influence the final price you give your creation. A ruby is a valuable, precious gem. The fact that you are able to purchase $10/ct. rubies for $1/ct, doesn't it devalue those rubies? So, use the gems, or components, full value, as it’s intrinsic value.

Research the marketplace for personally designed and crafted jewelry that is similar to yours. If those pieces are selling for higher prices, they will influence intrinsic value of your work. (Name recognition can, also, influence either price.). At the same time, if stores are selling imported jewelry, that is similar to your work, for very low prices, that, too, will influence the intrinsic value of your work. Based on that, it makes sense that you shouldn’t try to compete with those under priced, mass produced imports. Use your own creativity and produce your own creations.

I’ve sold my jewelry creations in numerous art shows. Sometimes there were other designers, in those shows, that were selling their own jewelry, equal to my work, but at much lower prices. When their low priced work wasn’t very good, or very creative, it usually didn’t really influence the intrinsic value of my work. On the other hand, when the low priced work turned out to be very creative and well made, it did effect the intrinsic value of my work.

As an example, a few years ago, I was showing my jewelry in a better art show in the Los Angeles area. One of the other vendors was selling his jewelry, and it was very similar to my work. His work was very creative and well crafted, and he was selling his work for half the price I would have. I visited his booth and complimented his work. Soon we were discussing pricing. He explained that he was a well-to-do doctor, and he created jewelry as a creative outlet. He, also, stated that he had no interest in making a profit, (he needed a business tax loss), and that he was thrilled that people liked (and purchased) his work. Obviously, he continued to under price his work.

Although, I could have let his pricing influence the intrinsic value of my work, I decided not to let it. I continued selling my work at my prices, and I did pretty well, although I did lose a few sales to him. By my maintaining my prices, my intrinsic value stayed the same. All, in all, both of us made a number of sales, maintained our own prices, and I made a profit.

Intrinsic value can influence how a buyer values your work. If your work is priced below what a buyer would expect to pay, the buyer will not have confidence in your work, and might assume it is nothing more than a cheap, mass produced, import.

Five years ago, I was showing my jewelry in an expensive, indoor, 3 day, Arts and Crafts show. There was a lady, one aisle over, selling her jewelry in her, brand new, beautiful, expensive, booth. We got into talking, and she said that this was her very first show and that she was uncertain about her work. I noticed that most of her necklaces had $30 ~ $40 price tags. I saw that her work was very nice and I suggested that she raise her prices. Her response was, “No one will buy my jewelry if I raise my prices.” We discussed her costs, value, and pricing, and then I returned to my booth.

The following early afternoon, she visited my booth. She was crying, and told me that no body was buying her jewelry. I told her, that since she had nothing to loose, she should try raising her prices by 300%. She said that she couldn’t do that, but she would experiment with doubling her prices. An hour later, she returned to my booth. She was beaming, and said she had sold two necklaces. She told me that she appreciated my counseling, and she would re-evaluate her pricing before her next show.

So, “Intrinsic Value” can also be defined as “perceived value.”

Another important consideration is “Price point”, or determining the clients and price range you are targeting. Before you start your business and purchase your jewelry supplies, you should make the following decisions:

     - What price range do you want to sell in?
     - $25 ~ $50, $100 ~ $200, $500 ~ $1,000, $2,000 ~ $10,000?

     - Who do you plan to sell to and what is their income/sophistication level?
       Neiman-Marcus or Wall Mart or Swap Meet?

     - Will you be selling in Beverly Hills or in a low-income community?
        If your prices and intrinsic values are too low, they won’t sell in Beverly Hills.
        If your prices and intrinsic values are too high, they won’t sell in a low-income community.
        (In either community, if you try to sell Rubies at low prices, the buyers won’t respect your work or believe the Rubies are real.)

     - Will your buyers be “high income-young urbanites”, “old rich”, seniors, or people on a fixed income?

     - Do you want to work with plastic, Austrian crystal, Agates, Amethyst, or Alexandrite?
       Platinum, 22k gold, 18k gold, 14k gold, gold fill, sterling silver, pewter, gold/silver plate, or less?

      - Do you prefer quality sales, or quantity sales?

Once you have determined your “Price Point”, you can proceed with your planning, supply purchases, design, and the crafting of your jewelry. If you do not do this, you can end up very frustrated and broke.

Note: The purpose of this series is not for me to tell you exactly how much money you must charge, that is collusion (illegal). Instead, it is meant to be a guide to help you understand some of the basics of business, how to understand and calculate your true component costs, and determine the value and selling price of your jewelry.

• Your first, and most important step is to create a written, personal Business Plan. It should include: What you are selling; Methods of manufacturing; Types of selling (Retail, Wholesale, Internet sales, etc.); Who is your Targeted Market, and what is your Price Point; Place of business; Who will be involved in your business; etc.
   
• If you are looking for outside financing or working with a business consultant, your Business Plan will be requested.
   
• Define your business type: Sole Proprietor; Partnership, Limited Partnership, Corporation, etc. If it is a Partnership or Corporation, I suggest you have a lawyer set it up.
   
• As a Sole Proprietor, you are completely responsible for all income, expenses, and liability.
   
• In a Partnership, each partner is responsible for the debts of the partnership, even if the other partner has incurred the debt.
   
• In a Limited Partnership, one partner is the talent and the other partner is the financial investor. The investor, who has no active roll in the business, is the “Limited” partner and is not responsible for debts incurred by the business. You, the talent, do have an active roll, are the “General” partner, and are personally liable for partnership’s debts.
   
• With a Corporation, you are setting up a completely new entity. It provides limited liability for all stockholders (you and others) and can provide unique tax situations. Talk to a lawyer.
   
• Create a business name. It can be just your own name (“Joan Doe”), your name plus added words (“Jewelry by Joan Doe”), or a created name, such as; “Beautiful Beaded Jewelry”. If you have created a business name, other than only your own name, you have created a Fictitious Business. When you create a Fictitious Business, you must file a “Doing Business As (DBA)” form and publish the necessary information in local publications. In Los Angeles there is a network of DBA Newspapers, who allow you to file on their web sites and they will handle everything else, including publishing your information in their network of newspapers.
   
• Define your fixed business location: Home based (will customers be visiting your home, or not) – check local Zoning laws, Store Front, or Office Space.
   
• Have an accountant, or bookkeeper, set up you accounting books. Define who will be maintaining your books.
   
• Obtain a state resale certificate (and number), and understand your responsibilities. This allows you to purchase all components of your final product without having to pay sales tax. It also requires you to collect taxes on all of your sales, maintain sales records, and send the collected taxes to your state’s tax agency. In California, the agency is called the “State Board of Equalization.” You can visit their local office or go to their web site, to obtain your Resale Certificate and number.
   
• Obtain a local Business License, if it is required. Some jurisdictions do not require one if you are a small, home based business grossing under a specified amount.
   
• Set up a separate Business Checking Account, and perhaps, a separate Business Charge Card. Get to know your banker. He can be of help in starting your business, and after your business is in operation. Create a “line of credit.”
   
• Arrange to accept credit cards from your customers. You can do this through your bank, or through an independent credit card processor, such ad Retriever.

Over the past 7 weeks we have covered:

• Starting your business and the steps involved.
• Pricing your jewelry (or other creations). Includes examples.
• A “Basic Rule”.
• Materials costs – base & secondary.
• Design & Creation time – value of.
• Name recognition.
• Intrinsic and perceived value.
• General business costs.
• Wholesale pricing.

Let’s look again at some of the questions I listed in part 1 of this series:

• “My co-workers love the jewelry pieces I make for myself, and they want to buy them. How much should I charge?”
   
• I hope by now you understand that your work has value. It is relatively common for women to admire the beautiful jewelry that another woman is wearing. Sometimes when they find out you are the creator, they ask to purchase your creation. In doing so, they are they are confirming the value of your work. Since they are confirming your work has value, you, too, should respect yourself & your work, and charge accordingly.
   
• “How do I figure my costs and selling prices for my jewelry?”
   
• Go back to “The Basic Rule”. YOUR MATERIAL COSTS X 3, + YOUR DESIGN & CREATION TIME, + “NAME RECOGNITION”, + INTRINSIC VALUE.
   
• The Basic Rule is only a basic guide, a starting point, to help you develop your own pricing schedule. One in which you can recover all of your costs, be paid what you are worth, and make a profit.
   
• “A woman told me that she would pay me my costs and she will wear my jewelry for people to see and I’ll get a lot of business. Is this how I should start my business?”
   
• First, she is telling you that your work is special and valuable.
   
• Second, unless she is a great sales person with a large social circle of friends with the money to buy your creations, you’ll end up with nothing and she will have your wonderful creation without paying for it.
   
• “What jewelry supplies can I buy (with a state resale number) without paying the sales tax (California)?”
   
• You may purchase “for resale” the following items, only: 1) everything that will be included in the final product when it is sold; 2) packaging for your product when it is sold and delivered to your client.
   
• You must pay sales tax on everything else you purchase that is not physically included in your final product when you sell it. The state requires you to account for everything you purchase “for resale”, and it expects you to pay the unpaid taxes on everything you do not sell.
   
• The state requires you to pay, to them, the sales tax for all items you sell. They don’t care who pays the tax (your client or you), as long as they receive their money. I suggest you collect the tax from your client when you make the sale.
   
• “My hairdresser has offered to sell my jewelry in her salon. She will display them and pay me after she sells them. How much do I charge?, Do I need a written agreement? Who is responsible for the sales tax? Help!”
   
• This is called a “consignment” sale. Because she is not purchasing your creations, outright, and you will have to wait for your money, your discount, to her, should be less than for a regular wholesale sale.
   
• It is very important to have a written contract between you and the consignee. It should cover each person’s responsibility, when you will get paid, how and when you will recover all unsold merchandise, physical responsibility, etc. You can find sample Consignment forms in books on crafting as a business. (See book references.)
   
• The Consignee should be responsible for the collection, and paying to the state, local sales taxes.
   
• “How can I make sales and charge the prices you tell me to charge?”
   
• First, I’m not telling you how much to charge. I am giving you information, and the tools to develop your own pricing schedule. One in which you will cover all of your expenses, receive a reasonable compensation for your creativity and craftsmanship, and make a profit.
   
• Don’t take the attitude, “I’m not worthy.” If you are creative and a fine craftsperson you are every much as worthy as Paloma Picasso (Tiffany & Co.).
   
• Produce fine quality, creative and unique jewelry.
   
• Be creative and do not create jewelry that resembles mass produced, cheap and/or imported, jewelry.
   
• With your wonderful work, you should aim high. Set your “Client Level” and “Price Point” high, and you will take yourself out of the arena of the low talent and low priced “designers”. Remember, “Heavy Weight” boxers never have to worry about “Bantam Weights.” Whether it’s beads or boxing, or music, “want-to-bees” with no talent will always be in the background. So always keep yourself in the front..

¨Where It’s At. A guide to Arts & Crafts Shows. (AL, AZ, AR, CO, GA, KS, LA, MS, MO, NM, OK, TN, & TX)
1-800-972-8589

¨Art Fair Source Book (Includes a shop rating).
www.ArtFairSourceBook.com