| For those of you who are thinking about | | | | get it, buy looking at the markups of your |
| selling gold jewelry, it is crucial that you | | | | competitors, you may get an idea of how |
| understand fully how to determine the price | | | | severe the competition is. For instance, if |
| for gold jewelry. Not only this can help you | | | | the competitors are marking up the jewelry |
| to tell a good deal from a bad one, it also | | | | three times of the cost, the competitiveness |
| helps to analyze your competitors and | | | | of that style is not really that high. On |
| understand the market better before you make | | | | the other, if everyone has the same pricing |
| any investment.Gold price | | | | and the markup is 50% above the cost, the |
| | | | style might have already saturated the |
| The most important part of wholesale gold | | | | market.Volume trading |
| jewelry trading is to understand the | | | | |
| breakdown of the cost of a piece of gold | | | | Another angle of looking at the pricing |
| jewelry. Let's say the current good price is | | | | issue is that when the competitors are |
| $500 per ounce. To calculate the cost of gold | | | | marking up at a low margin, the item is |
| for a piece of 14 karat gold jewelry that | | | | probably accepted by a lot of consumers. The |
| weighs 3 gram without any stones, we first | | | | justification behind it is that when the |
| divide the price per ounce by 31.5, to get | | | | profit per piece is low, and people are |
| the price per gram, which is $15.87. This is | | | | trading them actively, there probably is a |
| the price of pure gold. To convert this to | | | | high demand for it. On short, the higher the |
| 14K gold, knowing that there are 24 karats in | | | | profit margin, the low the volume of sales |
| pure gold, we divide $15.87 by 24 and | | | | and the low the profit margin, the higher |
| multiply the result by 14. The price per | | | | could be the volume of sales. Another point |
| gram for 14k gold is roughly $9.26. | | | | that is worth noting is that the volume |
| Therefore, the total cost of the gold for a 3 | | | | theory also applies to jewelry vendors. If |
| gram ring would be $27.78.Labor Cost | | | | you buy in large quantity, pricing should go |
| | | | down automatically. Therefore, running a |
| Another major part of the cost for a piece | | | | successfully business involves getting the |
| of gold jewelry is the cost for labor, | | | | balance between all the factors within the |
| especially for pieces set with precious | | | | resources and infrastructure you have such as |
| stones. Gold jewelry generally requires some | | | | employees and capital.Closeout Jewelry |
| filing and polishing after it is cast out of | | | | |
| the mold. The labor cost can sometime be as | | | | Since jewelry business is highly |
| high as $2 per gram, depending on the origin | | | | time-sensitive, styles that were once popular |
| of the jewelry and the style. In addition, | | | | several months ago may not sell at all couple |
| the cost of setting any stones on a gold | | | | months later. Therefore, when buying gold |
| jewelry can be over one dollar per stone. | | | | jewelry wholesale, you should estimate the |
| Certain advanced setting such as channel set | | | | monthly sales and stock according to the sale |
| and invisible set cost even more because of | | | | volume. For example, you may want to stock a |
| the high level of craftsmanship | | | | certain style for two months worth of stock |
| required.Markup of Competitors | | | | and restock it when it runs out in order to |
| | | | minimize the closeout items in the inventory, |
| A good way to analyze if a certain style of | | | | which is sometimes referred to as inventory |
| gold jewelry is profitable and beneficial for | | | | shrinkage.By understanding the market and |
| a business is to understand your competitors' | | | | your competitors, you can reduce the mistakes |
| prices. Since you already know how to | | | | during your entrepreneurial endeavor, thus |
| calculate roughly the cost of a piece of | | | | increase the chance of succeeding |
| jewelry, and therefore the price that you can | | | | tremendously. |