For those of you who are thinking about selling gold jewelry, it’s important that you understand fully how to determine the price for gold jewelry. Not only this can help you to notify 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 a component of wholesale gold jewelry trading is to understand the breakdown of the cost of a piece of gold jewellery. Lets say the recent 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 initial 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. For this reason, the total cost of the gold for a 3 gram ring would be $27. 78.
Labor Cost One other major an element of the cost for a piece of gold jewelry is the cost for labor, particularly for pieces set with precious gems. Gold jewelry generally requires sure filing and polishing after it’s cast out of the mold. The labor cost may sometime be as high as $2 per gram, depending on the source of the jewelry additionally, the fashion. In addition, the cost of setting any gems on a gold jewellery 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 confident fashion of gold jewellery 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 for this reason the price that you may get it, buy looking at the markups of your competitors, you could 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 model is not really that high. On the other, if everyone has identical pricing and also the markup is 50% above the cost, the style can have already saturated the market.
Volume t 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 many 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. One other point that is worth noting is that the volume theory as well applies to jewellery vendors. If you buy in big quantity, pricing have to go down automatically. Therefore, running a successfully business involves providing the balance among the all the elements within the resources and infrastructure you have such as employees and capital.
Closeout Jewelry Since jewellery business is highly time-sensitive, patterns that were once trendy several months ago can not sell at all couple months later. So, when purchasing gold jewelry wholesale, you should estimate the monthly sales and stock according to the sale volume. For example, you might want to stock a confident trend 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 jewellery, you may reduce the mistakes during your entrepreneurial endeavor, thereby increase the probability of succeeding tremendously.
Author: Agus RahmanThis author has published 3 articles so far.