For those of you who are thinking about selling gold jewelry, it is crucial that you understand fully how to determine the price for gold jewelry. Not only this can help you to tell a good deal from a bad one, it also helps to analyze your competitors and understand the market better before you make any investment.
Gold price
The most important part of wholesale gold jewelry trading is to understand the breakdown of the cost of a piece of gold jewelry. Let‘s say the current good price is $500 per ounce. To calculate the cost of gold for a piece of 14 karat gold jewelry that weighs 3 gram without any stones, we first divide the price per ounce by 31.5, to get the price per gram, which is $15.87. This is the price of pure gold. To convert this to 14K gold, knowing that there are 24 karats in pure gold, we divide $15.87 by 24 and multiply the result by 14. The price per gram for 14k gold is roughly $9.26. Therefore, the total cost of the gold for a 3 gram ring would be $27.78.
Labor Cost
Another major part of the cost for a piece of gold jewelry is the cost for labor, especially for pieces set with precious stones. Gold jewelry generally requires some filing and polishing after it is cast out of the mold. The labor cost can sometime be as high as $2 per gram, depending on the origin of the jewelry and the style. In addition, the cost of setting any stones on a gold jewelry can be over one dollar per stone. Certain advanced setting such as channel set and invisible set cost even more because of the high level of craftsmanship required.
Markup of Competitors
A good way to analyze if a certain style of gold jewelry is profitable and beneficial for a business is to understand your competitors’ prices. Since you already know how to calculate roughly the cost of a piece of jewelry, and therefore the price that you can get it, buy looking at the markups of your competitors, you may get an idea of how severe the competition is. For instance, if the competitors are marking up the jewelry three times of the cost, the competitiveness of that style is not really that high. On the other, if everyone has the same pricing and the markup is 50% above the cost, the style might have already saturated the market.
Volume trading
Another angle of looking at the pricing issue is that when the competitors are marking up at a low margin, the item is probably accepted by a lot of consumers. The justification behind it is that when the profit per piece is low, and people are trading them actively, there probably is a high demand for it. On short, the higher the profit margin, the low the volume of sales and the low the profit margin, the higher could be the volume of sales. Another point that is worth noting is that the volume theory also applies to jewelry vendors. If you buy in large quantity, pricing should go down automatically. Therefore, running a successfully business involves getting the balance between all the factors within the resources and infrastructure you have such as employees and capital.
Closeout Jewelry
Since jewelry business is highly time-sensitive, styles that were once popular several months ago may not sell at all couple months later. Therefore, when buying gold jewelry wholesale, you should estimate the monthly sales and stock according to the sale volume. For example, you may want to stock a certain style for two months worth of stock and restock it when it runs out in order to minimize the closeout items in the inventory, which is sometimes referred to as inventory shrinkage.
By understanding the market and your competitors before buy wholesale gold jewelry, you can reduce the mistakes during your entrepreneurial endeavor, thus increase the chance of succeeding tremendously.
Posts Tagged ‘Jewelry’
Wholesale gold jewelry trading guide for entrepreneurs
Sunday, April 17th, 2011Jewelry Stores in the High Street Have a Way With Artistry
Thursday, March 24th, 2011Jewelry stores provide us with a service that can be found only in a few places. These places will have a selection of different jewelry that you can buy. The price range for all of these will be different according to the type of jewelry that you are looking to buy. Since people love to wear jewelry there are many of these jewelry stores to be found in various locations.
This will make things easier for you when you are thinking of buying pieces of jewelry. For the person who loves wearing elegant creations made from gold or silver, the quality jewelry stores should have a selection that will appeal to you. You will be able to see various styles of jewelry that may be designed from different periods of time. This varied style period of design will let you see if you would like to have an antique pendent that has been set in a modern and antique mixed setting.
The number of different jewelry stores also means that you can choose to buy jewelry that can be of an artistic nature, rap style or Hip Hop jewelry, ethnic looking jewelry, classic jewelry and many others. With all of these jewelry stores you will need to see the prices for the different pieces of jewelry that is in these stores.
You can find these jewelry stores in the high street, various malls and even on the internet. Regardless of where you are buying your jewelry from you might want to look into more than one store. This will give you a wider selection of jewelry that you can choose from. You will need to take some time in choosing your jewelry otherwise you may end up with jewelry pieces that you can’t use.
Besides the regular jewelry stores you can also find jewelry stores that sell mainly costume jewelry. While these jewelry pieces don’t have the same high quality as their normal cousins you can still find a great selection of costume jewelry that you can wear anywhere. These costume jewelry stores will have affordable prices for you. This means that you can buy various pieces of jewelry without having to worry about getting a large bill.
What’s more you can find elegant looking costume jewelry from certain costume jewelry stores that you can mix in with your normal jewelry. This mix and match ability is possible due to the fact that you can find lots of different jewelry stores. All of these jewelry stores will have a selection that will have you marching in just to see what you can buy.