A couple of weeks ago, I emailed a manufacturer about producing a pendant that I last made in 2009. I never got a reply, so when I went to visit him about an engagement ring I was working on, I asked, “What’s up with that pendant?” He turned green. He really did! Not solid, Kermit-the-frog, it’s-not-easy-being green, but still quite moldy around the edges. I braced myself for bad news. “I looked at the piece on your website,” he said. “And I’m going to have to charge you almost what you have been selling it for.”
Well! I knew the skyrocketing price of gold was going to catch up with me one of these days. Back in 2007, I was stressed out about gold hitting $700 an ounce. Since then gold has more than doubled, trading as high as $1,577 an ounce. (As I’m writing this, it’s about $1,540.) Silver, the more economical choice, has doubled in the past 12 months alone.
I figured it was time to check some chain prices, particularly a heavy 18K gold chain that I’ve been tracking for years. Here I am taking a bite out of it in 2010.
I bought 16 inches of that chain, wholesale, for $255 in 2006 and $444 in 2008. Last year, it went up to $530, excluding the clasp. Now it costs about $640, wholesale, excluding the clasp. Here’s a scan of the quote I got on a day when gold was at $1,550.
Directly below the price of the chain is the wholesale price for the clasp: $73.92. The two prices below that are for jump rings. Those are little metal links: one is used to attach the clasp to the chain; the other is the one that the clasp goes through when you put the necklace on. Fully assembled, with clasp and jump links, the chain will cost me $724.63. By the time it hits the display case of a store, it’s worth $3,260.84 — and that’s with pretty low markups for the wholesaler (me) and the retailer (the store).
That’s a big chain, so I also priced a one-millimeter chain that I use more frequently. In 2007, a 16″ version cost less than $60 wholesale, including the clasp and jump links. Fortunately I stocked up on that chain back then, because now the same one costs about $105. That means that skimpy, mass-produced chain with no pendant is worth about $470 at retail.
Not a lot of designers would give you so much information about their costs, but I want you to appreciate what a steal most of my jewelry is right now. While I’ve been basing the prices of my latest designs, such as my new Cleves earrings, on the current price of gold, I’ve only raised prices on old inventory by 10% or 15%. Like businesses ranging from supermarkets to jeans-makers, I’ve been squeezed between rising raw material prices and customers battered by a bad economy. It’s hard to mark things up when people aren’t spending like they used to. I figured as long as I made enough money on the old pieces to replace the inventory as it sold, with a little bit of profit left over, I would hold steady. Now there’s no profit to be had at all — which, my Bitchtastic Guide to Business™ book will point out, is a highly undesirable situation — so I will be repricing many of my gold and silver designs. Because I didn’t raise prices incrementally, it’s going to be a huge jump: many prices will at least double overnight. I’m currently working on prices for the catalogs I produce for store buyers. When I finish that project, I will change the prices on my website to match. That means that for a few more days or weeks, old inventory is being sold for shockingly low prices. For instance, my Mud Flap Jill necklace in 18K rose gold and rubies is being sold for the 2009 price of $500.
Meanwhile, the Mud Flap Jill in 18K yellow gold is selling for $1,500.
There is no difference in price between 18K yellow gold and 18K rose gold. The only difference is that my original inventory of yellow-gold Jills sold out. The new yellow-gold Jills reflect 2011 costs. I have one rose-gold Jill left from 2009 and it’s still at the 2009 price. The minute it sells and I have to make new rose-gold Jills, the price of the rose-gold Jill will go up to $1,500. So if you want one for $500, I suggest you buy it THIS SECOND. And if you want to look around for another bargain, here’s my website:
It’s not often that you can make an investment that’s guaranteed to at least double in value within weeks, unless you’re lucky enough to get in on an underpriced initial public offering of stock. This is your chance to be a savvy investor! Buy now before it’s too late.
And come back tomorrow for the answers to your burning questions including:
- Why don’t you buy cheaper gold?
- Your price is just double the price of your materials, right?
- Why don’t you work in brass?
- Why don’t you make everything in Asia?
I’ve answered the second, third and fourth questions before in posts such as Get Smart (About Manufacturing) and OMG! Get Smart (About Quantity). But I don’t mind answering them again. I grew up with television commercials for discount retailer Syms, which declared, “An educated consumer is our best customer,” and I totally agree with that philosophy. The first question is straight out of Dumbassville, but I’ll answer that one too.