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Future of professional goldsmiths


#1

I’ve been wondering about the future of gold and platinum jewelry.
People have been buying jewelry for thousands of years and it has
never been more affordable until recently. These price spikes are a
new one for me. I’ve been a working goldsmith for over 20 years. I
wasn’t a jeweler in 1983 when gold hit $1,000, but I talked to other
jewelers who were around then, and they said work stopped, just as
it has now. Adjusted for inflation, I guess that would be like
$5,000 an ounce nowadays.

I think these high prices are going to change people’s buying
habits. In years past, only the very wealthy could afford fine
jewelry, it was not something a middle class person would have
owned, not until after the industrial revolution in the mid-1900s
was it available to the middle class. And that spurred a lot of new
jewelers into the trade. But now it looks like there will be a
decline in fine jewelry purchases by the middle class which will
result in a lot fewer jewelers. I for one had to change my focus
more towards toolmaking rather than producing fine jewelry. I joke
around with a friend of mine that my customers were the working rich
and his were the idol rich. His customer base just petered out this
year, mine hit the bricks a couple of years ago.

I’d like to hear what other jewelers have to say on the subject.

Kevin Potter
www.potterusa.com


#2

I find things are moving along nicely, although they are changing. My
business has always been re-casting “grandma’s gold” and repairs. My
repairs are way up, and so is what I charge for them. Re-casting has
fallen off some, but it is still there.

I feel that we, as goldsmith’s, are coming into our own time. It is
time to hone our skills as I feel they will be more in demand as the
high price of jewelry will have more people fixing their jewelry.

I think that new jewelry will take off in a new direction as far as
materials are concerned. Silver, bopper, bronze, aluminum are just
some of the metals that will be used along with wood, leather, etc…
It’s time to get to know these metals.

Time to start thinking outside of the box. OH, customer service will
be a BIG factor in keeping customers. Get those repairs done on
time…Teddy

Don’t take life too seriously…you’ll never live through it.


#3

I find that people are looking more for a piece of art today in
jewelry. It has to be unique - it has to be different. It has to have
a “twist” to it. It’s less about the metal and more about the style.
And to my mind that’s a good thing - jewelry makers are first artists
and then craftspeople, although they had to learn the craft first.
Think of the amount of steel or stainless steel showing now on the
runway. And as for gold – I’m old enough to remember when the price
was freed from $35 an ounce. Why didn’t I sink everything into it
then!!!

Barbara on a dark night on Prince Edward Island, thinking about the
price of gold.


#4

Kevin- I was in the trade when the $1000 gold and $40 silver, $100 a
barrel for oil happened. Diamonds were $60,000 for a one carat
diamond. I survived the dot com bust too.

During the last big commodity bubble the only people who had good
business were the jewelers who sold at the very top and the very
bottom of the economic scale. Really rich people will always have
money and often very poor people do not manage their money wisely and
spend on luxury items.

There was a blood bath in the trade. Very many jewelers who couldn’t
adjust went out of business. That’s not OK for them,but good for the
trade in the long run. It weeded out the weakest of the herd. Not
every body who wants to be a professional jeweler should.

There is always an opportunity to make money in an economic
downturn. We made money refashioning things that were out of style
into new jewelry for those who could not afford to buy new. We also
targeted really rich people. I also stayed out of speculation on
metals and stones until the bubble burst. Once it did, with alarming
speed, for the next several years I bought common rounds and ingots
of silver every pay day at 4-6 dollars an ounce instead of 40.

Right now we are focusing on Platinum jewelry. Platinum is a bargain
compared to gold and silver. We are doing just fine.

Jewelry is a luxury item. Nobody really needs it. When folks decide
to buy jewelry, regardless of their socio-economic status, they
expect to pay a significant amount of money for a piece of fine
jewelry.

Don’t ever apologize for your prices. Remember that the person
buying doesn’t remember when gold was $300 an ounce. Also don’t
project your own thoughts onto the customer. “Jeez, I can’t afford to
spend 50 grand on a ring! Can’t they see that tiny pit inside the
shank?” All they are really thinking is that this is one of the most
beautiful, meaningful, important financial, and romantic purchases of
their lives. Make it special.

I have always told young folks that if you really want to make
consistent money in this trade become a broker. Gems,diamonds,
metals, pawn. Just like stock brokers, they make their money
regardless of the prices. 10% to buy,10% to sell. It goes up, they
make money, it goes down, they make money.

Think times are tough now…

In the old days if you were a goldsmith you worked for the King or
the Church. They were the folks with money. If you screwed up or
made/designed something badly you got not just fired, but maybe
beheaded or excommunicated.

Have fun and make lots of jewelry.
Jo Haemer
www.timothywgreen.com


#5
wasn't a jeweler in 1983 when gold hit $1,000, but I talked to
other jewelers who were around then, and they said work stopped,
just as it has now. 

That is not entirely accurate. Gold price does not affect jewellery
business, in a way that many perceived. Rapid price fluctuation is
more damaging that magnitude of increase. Work stopped because
everybody was waiting for the price to come down. If it would
increased and stay that way, it would only be beneficial.

High price of gold is not bad. It simply means that instead of
wearing fishing sinkers, the jewellery will be delicate and
tastefully done. It means that thin chain will be treasured, and 2
inch collars will be reserved for dogs. Goldsmithing will be about
design, taste, and respect for metal. The way jewellery business was
for the last 20 years, simply could not last.

Leonid Surpin
www.studioarete.com


#6
wasn't a jeweler in 1983 when gold hit $1,000, but I talked to
other jewelers who were around then, and they said work stopped,
just as it has now. 

I was just getting serious with goldsmithing around then. Business
did just stop, just like it did about two and a half years ago. It’s
almost like someone just turned off the switch. The difference
between then and now is that in the early eighties, when gold (and
silver a little later, thanks to the Hunt Brothers) spiked, it was a
steep spike, and even though it didn’t go all the way back to where
it was, it dropped back down almost as fast as it rose. Then it
stayed there. For decades. Business was back to normal in a year or
so and really started cranking up to new high levels very shortly
thereafter. In fact, the several years following starting in the
mid-eighties until the early nineties were some of the strongest
years for growth in the jewelry business that we have ever known. It
kicked off a whole new generation of goldsmiths, pocket jewelers and
would-be retailers much like the post-WW2 era Kevin speaks of.
Everyone was selling jewelry. This time around though, metals have
spiked, stayed there a little while and spiked again. And it looks
like they’re starting to do the same thing again right now. This
time, it isn’t any fun at all, there was no drop after the spike and
business isn’t picking up anywhere near like it did in the 80’s, for
anyone in any business. I personally see no end in sight.
Competition for the primo-bench job is going to be a bear this time
around. 2011 isn’t going to be another 1986 for the pro benchie.

I’m sure the same kind of thing happened in the early thirties as
now, although as Kevin points out, jewelry wasn’t the staple of the
middle class nearly as much then as it is now. But during the time of
The Great Depression, some of the most beautiful jewelry ever created
was being made. Then as now, and since the birth of mankind until its
end, there will always be the poor. But there will always be the
wealthy too and their numbers now are much greater than most people
think (by wealthy I mean someone that can spend $20 or 30K or more on
a nice piece of jewelry every year or two). A lot of them are just a
little afraid to display that kind of buying power right now and many
have gone underground a little bit; they seem to feel they have a
great big bull’s eye on their backs. Too many people now consider
them to be the enemy that must be gotten even with, rather than their
best customers to whom they should try to sell their very best as
was always the goal in the past.

People that appreciate fine craftsmanship, the finest in materials
and classic, fashion forward design will always be here and they will
be more than willing to pay for the best. Those folks that love
jewelry but can’t afford the best, the product of the Industrial
Revolution as Kevin described, are here to stay and will continue to
be a significant part of the jewelry buying public, but they will
demand far more of their jewelry dollar. The line between these two
groups will probably continue to widen, making the work of the
mediocre goldsmith unwanted. The number of fully employed goldsmiths
(doing work to their full potential) will probably not grow
appreciably in the near to mid-future. But the goldsmith that
demands the most of him/herself, will be in the best position to
cater to both of those groups.

There is no lack of work for those that excel in any of the jewelry
trades, in fact the future is quite bright. For those that don’t
excel, things are only going to get worse. We’ve seen how this plays
out in the number of retail jewelry stores (many of which opened
during the post-80’s-gold-spike boom) that have closed their doors in
the last few years. The good ones, the ones that paid attention to
their costs and their customers needs and desires, that were able to
adapt to new strategies, survived. Those that looked at things more
traditionally and weren’t able or willing to adapt, got squeezed out
in large numbers. I think we are going to see, if were not already
seeing, the world of the professional goldsmith following much the
same path.

“The cream always rises to the top” is still a valuable metaphor
that will be proven true once again. The harder the times, the
tougher the competition, the more true it becomes. This is why some
of the finest jewelry ever created was made when times were the
hardest. Even the cheap costume jewelry of the time is among the
finest ever made. Only the best of the best goldsmiths were still
around to create it.

If you (Neil’s all-encompassing you) want to be successful as a
metalsmith in the near and mid-future, you will have to be the best
you can be, and then get a little bit better. If you’re not willing
to really put your all into it, someone else will, and they’ll get
the job(s) you want. Employers are hiring with increasing strength
and retailers are looking for quality custom and trade shops like
they never have before, but they’re only hiring the cream, not only
in breadth of skill and craftsmanship, but in attitude - customer
service is still alive, well and thriving. They are merely following
their customers’ lead and are looking for the biggest bang for their
buck in a world full of mediocrity. Any goldsmith willing to be a
big bang for the buck is going to be just fine.

Dave Phelps


#7

Hi Kevin,

I think these high prices are going to change people's buying
habits.

That was a very interesting post. My personal observation is that
it’s certainly not as easy as it was to make money in the fine
jewelry biz. But that doesn’t mean you can’t and many people are
(making money). I talk to a wide range of retail jewelers and it’s
fascinating how widely their opinions on the business in this
economy vary.

Some are all gloom and doom, they are in hunker down mode. They have
slashed their advertising budgets, cut staff and inventory and are
living on buying scrap. They believe that their future is in
jeopardy and they are very worried.

Others are doing just fine (a minority are doing fantastic). They
recognize the challenging economy, yet they are maintaining sales
while watching and cutting their costs. Some are actually increasing
advertising budgets and taking market share from the ones in
hunker-down mode. They are adjusting their inventory to reflect what
their customers are looking for and kicking up customers service,
none of them are taking their customers for granted.

The difference seems to be mostly attitude and capital. They are all
running similar businesses in the same region. The jewelers who are
succeeding are the ones who are flexible and see the challenge as an
opportunity.

No doubt there are many good jewelers who are under-capitalized and
who are failing because of that lack of cash. That’s the way of
things.

I do count my blessings that I’m able to stay busy, in good times
and bad, doing custom work. When metal market prices increase it
seems like in some ways customers value the precious metal jewelry
they buy even more than when gold was at $400. It’s tougher, but I
have no fear of ever needing to find another line of work. At the
very least people will always get married and always want jewelry
for that ceremony. The last two people on earth will probably want
to give each other rings…they just better hope one of them is a
goldsmith.

Mark


#8
The line between these two groups will probably continue to widen,
making the work of the mediocre goldsmith unwanted. 

I fear that a great many marginally skilled people are going to find
David’s prediction more true than they want to believe. We just
acquired a large client because he simply got fed up with the lousy
work he was getting elsewhere. After his first pickup he said, “Yep,
this is the place for me…” BTW, when I got into it gold was $45
and silver was $2.20…


#9

I go to the Tucson Gem Show every year and I used to set up a booth
and sell. I watched the number of exhibitors drop every year and the
number of visitors decline every year. This past year at the AGTA
show, the premium show in tucson, in order to make it look full,
they spaced all the booths out and put tables and chairs everywhere
and moved everyone in off the walls and closed an entire arena. I’m
friends with many of the exhibitors and some of them would say
"Business is great!" even though I know no one has bought a thing
all day and there is no one to sell anything to in the entire arena.
Others are more forthright.

I guess a positive attitude is very important, but being realistic is
also very important. I’m prone to delusional thinking myself, that’s
why I put this post up - to get a feel for what business is like
around the US. Orchid is such a good resource for talking with other
jewelers and getting anhonest to goodness, down-to-earth assessment
of different parts of the country.

Kevin Potter
www.potterusa.com


#10

I sell primarily in retail establishments throughout the Carolinas
in the US. ALL retail is down in our area according to the places
that carry my work - it is not that my work isn’t selling at its
normal volume, it is that NOTHING is selling at the normal volume.
It is actually worse here now than it was for the last two years…
not sure if folks have been living off reserves and those are gone,
or what the deal is…

My custom orders are doing as well or better than the last two years
though… and the average value has gone up on those. So I’m trying
to do more custom and repair to make up for the decrease of the
wholesale end…

And I can believe that folks weren’t buying in Tucson! I’m not
buying stones right now unless it is for a specific custom order…

Beth Wicker
Three Cats and a Dog Design Studio
http://www.bethwicker.com


#11

I think the financial scammers whose names are well known in the
press made quite a dint in many markets. Just look at high end real
estate in the second home market. And then there is the general
economy. Just like the events of 9/11 influenced behaviours, I’m not
at all sure, that the world will go back to the same behaviours when
better times begin to roll again. But there are many real estate
people who will tell you everything is wonderful and business is
booming.


#12

Kevin, great thread. I have been in business for 32 years, retail. I
do a lot of repairs and custom work. Sales are way down, but
business is busy as ever, the last three days I needed roller skates
to keep up with everything. It’s getting harder to keep up with the
day to day change in metal prices. I can remember my favorite little
chain for pendants a few short years ago costing 25 dollars, today
it will add 100 dollars COST to the pendant. I am lucky to be in a
small area with just a handful of working jewelers, and one of the
two that will work on silver. I think it will only get harder to
make a living at the bench if metals keep the uphill climb. The
saving grace is that so far people still want pretty shiny things to
wear. And some of them are willing to trade in old stuff to make new
stuff. When the jewelry box is empty of scrap, well, then it might
be time to retire. I hope that will be a long time off.

Janine in sunny but windy, Redding California


#13

Hi Jo,

Right now we are focusing on Platinum jewelry. Platinum is a
bargain compared to gold and silver. We are doing just fine. 

That’s great and is a credit to the business you have built.
Personally platinum has all but disappeared except for making
matching bands for existing platinum engagement rings. I just quoted
for a platinum gents band. The material cost for platinum was $1200
while the material for the same in 14K white was closer to $400.

I’m not doing the selling, just the making, but I’ll be surprised if
he goes with the plat.

Are you using some sort of magic dust? ; )

Best regards,
Mark


#14

I am not a goldsmith, but a silversmith. In western Minnesota which
is a farm based economy business is good. This area has a huge
amount of farm income and farmers are doing extremely well right now.
I believe that the bottom could fall out soon though. As the national
economy has faltered in the last 8 years I have expected it to hit
this area. It has not.

Jean Menden
www.jmendensilver.com


#15
Are you using some sort of magic dust? ; ) 

Fairy dust is what I use. It’s hard to come by, but it works really
well. You can find it in-season at your local goldsmith/wizardry
shop, right between the magic wand battery chargers and the diamond
magnets, usually in the same section as the girdle stretchers, wire
thickeners and girdle unchippers. Just follow the instructions on the
pouch.

Seriously, platinum sales here are still four or five to one
compared with white gold, and climbing. Yellow gold on the other hand
is starting to make a bit of a come back, there for a while I
couldn’t give the stuff away. Regardless of the metal you still have
to sell it. Believe in it, demonstrate the heft, show the longevity
using antique jewelry, compare the color with white gold, and tell
them how for just a little more, they can have the durability of
timeless, classic platinum, the most noble of the noble metals to
pass down to their grandkids.

It’s all in the presentation. No magic here.

Dave Phelps


#16
Fairy dust is what I use. It's hard to come by, but it works really
well. You can find it in-season at your local goldsmith/wizardry
shop, right between the magic wand battery chargers and the diamond
magnets, usually in the same section as the girdle stretchers, wire
thickeners and girdle unchippers. Just follow the instructions on
the pouch. 

Love it… Think I’ll set up a goldsmith/wizardry
booth at the next trade fair.

Lee Pownall
Brisbane Australia