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[Digest] Markup on diamonds


#1
    Here's the "breakdown": Say I have a stone that costme
$1000.00 and I set it in a ring that cost $75.00 to make, and
$25.00 for labor, that's $1100.00. Now if I take that ring and
markit up 200% that should bring it to$1320.00- And here's the
part I have a problem with: Our rep scoops 11% off of the top of
the Keystone. That's $145.20, leaving $74.80 for the company's
profit. Does that sound right to you guys?(& Gals)

Tim - I can’t get my calculator to match your figures. If it
costs $1100 and you mark it up 200% that should be $3300, if you
are just doubling your costs it should still be $2200. Based on
your figures you are only getting a 6.8% profit on that ring. I
think you are really only marking it up 20% ($1100 x 1.2 = $1320),
not 200% ($1100 x 3 = $3300), and that’s why your rep is fairing
better than you are.

Nancy
ICQ # 9472643
Bacliff, Texas Gulf Coast USAFrom: Barry and Diana hansen@hansendesigns.com

Tim,

Correct me if I’m wrong, but 200% shouldn’t be $1,320.00. 100% of
1100 is 1100. So 200% is 2200. Are you saying 200% or $200? If
you marked up that 1100 piece 200% it would be $3,300.00, not
$1,320. If you’re only marking it up $200, and it has diamonds in
it, you are not getting enough for the piece. You need to realize
that a retailer is still going to mark it up at least 100% for his
store. When I do wholesale I double the cost of my materials and
add in the labor. When dealing with a large center diamond of a
carat or more I can’t mark it up that much. It will vary depending
on the size and cost of the stone. For a carat or so stone I can
mark it up to about 50% (unless, of course, it’s a D-IF stone, then
the markup is less). For a 3 carat stone that costs me $10,000 my
markup is only 20% on the stone. I still double the cost of all
the other materials and add in my labor. That turns out to be
wholesale for me.

I hope this rambling was understandable.

Barry Hansen
Hansen Designs
Corona, California

From: MetalWerks MetalWerks@aol.com

Tim, Your formula doesnt include anything for overhead ie; rent,
utilities,or the 11% for your rep let alone anything that looks
like profit. I dont see how you can make any money based on the way
you mark up your jewelry.Thomas Mann has a video out which covers
all of these things i think it would be worthwhile for you to take
a peek at it.He uses a formula based on three things 1. labor and
materials 2. overhead 3. PROFIT. I think youve left out 2 & 3 out
of your formula. Michael

From: “Arnold” arno000@ibm.net

Hi Tim, Keystone would make your ring 2200.00. Pay your rep from
that. Tom

From: E Luther ELuther@aol.com

Take the rest of your costs separately, before the diamond, total
those and mark up, then add the diamond and mark it up less. Also,
are you using a price guide (a good one)? That could be very
helpful.

-Elaine
Midwest, Illinois, US

From: crystal visions ergon@erols.com

Tim,

Did I miss something? Shouldn’t your mark-up be based on the total
value. You are risking your capital to put this costly diamond in
your piece of jewelry, so shouldn’t you profit margin be based on
its value as well?

Mike (Maryland - eastern seaboard - 72 degrees and we are all
smiling)

From: MPark763 MPark763@aol.com

If your cost on the diamond is $1000.00, you should try to retail
it for $2000.00, or wholesale it for $1250.00 - $1500.00. We also
will at least triple out cost on materials, plus labor, on a
wholesale piece. I couldn’t stay in business charging less. You
would make more leaving your money in a mutual fund. You are
entitled to a fair markup.

Mark P.

From: Michel Larbrisseau trifac@trifac.com

Hi Tim,

Seems to be a problem when you markup 200 % on a 1100.00 ring, and
it gives you 1320.00 ???

Michel

From: Fishbre396 Fishbre396@aol.com

It’s not just a dilemma with diamonds, one encounters the same
with sterling and fine silver, gold, plat. or whatever they happen
to be using (metal wise) then we have to add in the cost of stones,
and whatever cast findings . . . . (I know, we should be making our
own, but since the shows are SO demanding and I’m the only one
making the stuff, I choose to use some cast and purchased
findings.)


#2
   Did I miss something? Shouldn't your mark-up be based on the
total value. You are risking your capital to put this costly
diamond in your piece of jewelry, so shouldn't you profit margin
be based on its value as well?

I think you’re right, Mike. Think about it this way Tim: The
money you spent on the diamond is money you cannot use to buy more
gold, therefore, it HAS to be part of the equation.

Tom (Washington, DC)

Tom’s Gems – Select Facet Rough & Fine Gems
http://www.tomsgemrough.com @Tom_LaRussa1
SUBSCRIBE TO MY FREE EMAIL LIST OF ROUGH & CUT GEMS