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