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Gemstones costing and pricing


#1

Hi again…

After casting all the models in 18K gold, I only have left to buy
and set the stones, in order to finish my first collection.

I’ll be eternally grateful if you could share your wisdom with me
(and everyone else!) on the following issues:

  1. I read on a couple of threads in Orchid that one can not rely on
    the Rappaport guide for diamond prices, as the actual prices are
    very different (lower). How then, do I make sure that I get what I’m
    paying for? How do you estimate what the price should be for a
    diamond you wish to buy?

  2. Same as question #1, only about I will mainly use
    Saphire, Aquamarine and Tourmaline. Are there price guide for those,
    and are they reliable?

  3. As the stone I buy is probably the same the customer can by
    himself and ask a jeweler to set for him, how much do you mark up
    the diamond / gemstone price (for wholesale to galleries/stores)? I
    am guessing the markup will not be the same as the markup on the
    gold cost…

Thanks so much in advance,
Jonathan


#2

Jonathan,

Without question, the best guide to the actual prices paid by
jewelers for diamonds in various sizes, shapes and qualities can be
found in The Guide…same for color, although be aware that poorly
cut junk can sell for less, especially in quantity, and well-made
custom cut stones will ALWAYS sell at a very high premium.

They can be contacted at gemguide.com and you can use my name as a
happy customer of many, many years. I have no financial connection
with them whatsoever, just a happy customer.

Wayne Emery


#3

Thanks, Jonathan, we needed another non-answerable question! ;}. The
Rap sheet wields entirely too much power, as many in the trade are
realizing now. Basically your cost will likely/hopefully be something
"Back of Rap" - 20%, 30%, 40%. The real answer to your question for
both diamonds and color is: don’t guess, ask your suppliers. I know
what diamond melee is going to cost me, so I just price accordingly,
but centers of all kinds can be wildly variable. If you don’t have
good dealers in place you have no idea what your cost will be. A one
carat ruby can be $250 or it can easily be $15,000, depending on the
ruby. I generally get around 40% back for fine goods, but I imagine
there are some here who think that’s unattainable. Don’t guess, ask
your dealers. If you are buying a $10 stone, you’d be in line to
double or triple your cost, if it has selling power. If you’re moving
a million dollar stone you’ll be getting 1% if you’re lucky -
probably 1/2%, and everything in between. I price melee at $1500/ct.,
sometimes more, and I’m paying around $650 for g/vs. If I’m selling
1/2 ct. of goods, that means I’m only making $100 or whatever -
didn’t actually do the arithmetic here. If you price like that and
sell a.20 ct. stone, you’re only making moderate money, even if the
per ct. seems like a lot. It’s a start of an answer, hopefully…

http://www.donivanandmaggiora.com


#4

Hi…

Seeing as you will get 20 different responses to this question I will
leave my response short. Others may feel to point out your
demographic area as to how you should price your items. Others may
claim your customer base. It all depends…since its getting harder
and harder to make a buck nowadays. I will have to charge by the hour
for my response. That will be $25 please.

Thank you for asking this question. I remember a book on this
subject. I will have to get out some older catalogues to see if I can
find the name of it.

Brad Baumgartle


#5
  1. find a few reputable gemstone suppliers, ask for quotes on the
    sizes and quality and in which quantities you wish to buy them, and
    where in that quote do price breaks occur for a) quantity b)
    quality/colour . then after calculating the best price on what you
    want, and inspecting the parcels you will actually recieve ask if the
    company that you want to deal with will sell them to you at a price
    you deem fair ( based on the prices you have accumulated from the
    dealers you have access to) for the stones. for any stone. basically
    if it’s in print it’s too high- that I believe is universal to
    anything marketed. markets change faster thatn printing can keep up
    with those things that afffect change- trends, mining, taxes on
    producing nations, or collectives, the abhorrent practices of " the
    diamond dealers"-( as an institution that has for decades
    overinflated the value and monopolized-or attempted a monopoly, on
    the sale and distribution of diamonds. ) and the perception of you
    and/or your enterprise by a dealer that is obviously more
    experienced in the trade of stones than you are - and I mean no
    offense by that statement, simply that if you are asking these
    questions, you have not dealt with stone dealers much. that’s normal
    in your experiencing all aspects of being a jeweler and your
    continuing education as a consumer (obviously involved in the process
    of becoming an informed consumer as you are seeking some perspectives
    with your post!) of the wholesale components that are used in the
    fabrication/ manufacture of jewelry and the beginning of learning how
    to negotiate the lowest price possible for gem materials…diamonds or
    any gem material. and it requires negotiation and entering into a
    mutually beneficient relationship with dealers of the stones you wish
    to purchase and use in your “lines”.

finding out the origins of the gem material that interest you is
helpful in negotiations of not only price but how many “middlemen"
you wish to eliminate in your procuring the stones you want to use
for whatever your purposes are. I, for instance, would far rather
travel to Thailand once a year to buy from the small scale producers
and collectives that are combing the gravels in their fields for an
addition to their near subsitence incomes than opening a catalogue
and paying a price that is at least marked up X x 2. 5 ( standard
retail), and in the case of most larger US distributors is higher
still than that- and limited to what they have gotten the best prices
on by buying in quantity from a larger distribution entity than the
rough miners, or even the cutters that are mostly owned by that
entity that distributes the gem materials globally through trade
shows, or organized collectives like Israeli diamond merchants, IDEX,
or deBeers, or even smaller collectives like independant asian owned
distribution channels that are ultimately " state” operated…However
most small scale jewelers are not able to afford direct buying or
travel and expenses relative to procuring a year or two worth of
stones, so the only alternative is to open a catalog, attend a "gem
show"or resort to ebay, or other auction-like venues to purchase as
directly as is financially feasible. and the small scale jewelry
manufacturer can develop relationships and make very good purchases
from those alternatives. always remeber that any dealer of stones is
charging more than they paid for the prices you see on the tables, or
in the catalogues, and no good business person will pass up a
reasonable offer.

so make reasonable offers, don’t be afraid to ask for a period of
time to inspect a parcel and a reasonable return clause when signing
any contract, or entering into any buying arrangement with any
dealer or distribution channel. always inspect what you will receive
and refuse anything that is flawed beyond your standards…always
offer the “sticker” price minus 20% as an opening figure. it is
negotiable- anything is negotiable in the gem trade. as you become
more experienced and more relationships are built with dealers, you
will be offered parcels that the dealer knows you- his/her target
market- will likely buy and pay the price they know they can get from
you. they eventually will regard your business as either negligible
or substantial and your money is almost immaterial as far as the
dealer is concerned. their concern is moving quantity, moving
inventory that is out of vogue or that is in excess in their stores,
moving merchandise that is flawed or rejected and possibly only good
for recutting, ( chipped or abraded materials),and you will learn
who the cheapest recutters are and who offers you the best service
and quality for the money and turn around time. there are no pat
answers to your queries just that experience and your personal
financial picture are the variables- all stones are available all the
time- the prices are always negotiable, and in time you can construct
or propogate a network that suits your own needs. and perhaps your
propensity to create a collective group of buyers of gemstones to
help the group buy in quantity which always commands more attention
and eventual personalized services and far more reasonable prices
than are availble to the jewelr that buys 5 carats of tourmailine,
10 round garnet cabs, and 8 10 pt. diamonds of SI1 quality. quantity
is almost the single most relevant factor to keep in mind as you try
to develop an efficient buying strategy for your needs.

3- markup: that is derrived from your asessment of time, labour,
studio (and employees) overhead, costs of materials, and consultation
(if it’s custom or one-off work), and any taxes you have to pay as a
manufacturer of jewelry. it is relative to each piece and each price
tier you offer your target market. All bear equally as the previous
components of figuring the retail cost ( or wholesale for that
matter) of your work and how much you value it yourself.

R. E. Rourke