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How are the prices metals affecting you NOW


#1

I think it is interesting to watch how prices effect the trends in
our field. At last check today Silver was at $10.73 and Gold $750.25.
This is half of what it was just 6 months ago, but still twice as
much as it was in 2005.

I’ve noticed much more use of bronze, brass and pewter in general.
Also other mixed media. I’m curious how the metal prices are
effecting you now. Are you using other metals and such? And how about
your pricing, how has it effected that?

As for me, I never stopped producing during the time the prices were
at their peek, I couldn’t. Now that prices are lower several of my
pieces were obviously made during this time. Hummmmmmmm will $10 to
$20 make or break the sale?

Holly


#2

Silver may have gone down significantly but gold at $750/oz is
certainly not half of what it was 6 months ago. Platinum on the
other hand is nearing that point. The “designer” jewelers (just look
in a few Nieman Marcus or Saks catalogs) certainly stepped down their
metals (or their stones—that whole pave look with a bunch of .005
ct. stones is just a scam as far as I’m concerned). But then now
they are just charging thousands instead of five or tens of
thousands. (Any of you who are worried about charging too much should
read these catalogs all the time—you’ll never feel guilty again
about any price you want to charge.)

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
www.spirerjewelers.com


#3

$750 an ounce for gold is still down 25% from the price I was paying
two or three months ago. Not half, but a nice, noticable difference.

RC


#4

I don’t know how to price right now. I’m flumoxed. I hate to price
per the lower rate of silver and have to raise prices. Or guess at
what might be the high rate. I do only wholesale, a lot of it, and
retailers need a consistent price. I’m in the process of updating my
catalog so it’s a relevant question for me right now.

For others who do production, what are you doing wrt pricing?

Nancy Goodenough


#5

Nancy,

I don't know how to price right now. I'm flumoxed. I hate to
price per the lower rate of silver and have to raise prices. Or
guess at what might be the high rate. I do only wholesale, a lot of
it, and retailers need a consistent price. I'm in the process of
updating my catalog so it's a relevant question for me right now. 

Every place you buy metals, the prices float with the market - most
catalogs indicate “price varies with market” “call for current
price” “price subject to change”. Call Rio and you’ll find the price
in the catalog is seldom the one you get. I’ve never done wholesale,
but I would think you could adjust for the current price of silver.
Whether or not you used silver (gold, whatever) from previously
(cheaper) is not the issue; what it would cost you to replace that
metal today is what makes the difference. I may be way off base, but
I think I would “float” my prices to follow the most recent market
prices. That just my opinion. BTW when have retailers given
consistent prices - most prices change from time to time - if their
lease changes they will pass on any increase I’m sure.

K


#6
For others who do production, what are you doing wrt pricing? 

It is driving us crazy. We publish a color retail catalog once a
year. All this fluctuation is really making us think hard about how
much we need to make on a piece. When gold was cheaper, we could
price pieces to sell and they did sell. When we raised prices to
cover higher material costs we had the messy business of not honoring
our recently published prices and we lost sales. There could be other
reasons besides just price that sales are down on our production
pieces, but it is too hard to know. Somewhat lower gold prices now
could be temporary, so we do not want to commit for a long time.

We had considered running the next catalog with no prices on gold,
but instead we went with a shorter run. The idea is that our current
catalog will be replaced in January.

My current thinking is that we will be better off if we price pieces
so that each design has a price that covers labor, overhead and
wholesale profit and that number plus materials is the wholesale
price. We mark that up by a percentage for retail. I think we were
getting in trouble when our formula was more of a factor of materials
because then the markup factor makes the price as volatile as the
metals market. It is not jewelry demand that has driven the price of
metals. This sort of formula would dampen the metals cost in
calculating the retail price. We would make just as many dollars on a
piece if the metals go up, but not as great a percentage. And we
certainly do not want the public to see our work as something that
is priced by the gram.

My business also retails Celtic jewelry made in Scotland and
Ireland. That part of the business is really messed up because of
exchange rates and metal prices. My suppliers are losing sales
because the prices are just not competitive like they once were.

Supply and demand is sometimes a cruel master. But if you think
supply and demand is a kook theory that can safely be ignored you are
living in a dream world. Its called the LAW of supply and demand
because the real price of anything is only what someone is willing to
pay.

Stephen Walker


#7

I don’t wholesale but if I did I would set a price at some midrange
silver value and then add or subtract a percentage depending on what
the current pricing does. Most major manufacturers do something like
this. I’m sure there are tools available on your computer that can
help set up a program like this.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
www.spirerjewelers.com


#8
I don't know how to price right now. I'm flumoxed. I hate to price
per the lower rate of silver and have to raise prices. Or guess at
what might be the high rate. 

No kidding.

I teach at Bead & Button and at the Bead Fest shows. Applications
have to be in nearly a year in advance, including the cost of
materials kits. I lost money the first year because I failed to
anticipate the rise in silver prices. Now I build in a fair amount
of “air” with the idea that if prices fall significantly, I’ll
include more materials in the kit-- or maybe make up for that
first-year loss.

But it is a nerve-wracking game, guessing where prices will be in an
uncertain future, and being committed to stand behind that guess.

Noel


#9
I don't wholesale but if I did I would set a price at some midrange
silver value and then add or subtract a percentage depending on
what the current pricing does. Most major manufacturers do
something like this. I'm sure there are tools available on your
computer that can help set up a program like this. 

Daniel, that certainly makes sense, but doesn’t work with my market.
Some fellow artists tried charging a surcharge when the silver rate
was racing up, and it was not well received by retailers and they
dropped that method, just kept raising prices.

Wholesaling is a whole different ballgame, which is why I asked what
other artists who wholesale are doing.

I was a mathematics major, so can figure out how to charge, and a
former IBMer, so I know how to market, but I’m not a psychic, so
don’t know how to handle this market.

When silver jumped to over $22 from $5-6, and now around $10, that’s
a big swing. The cost of silver is a high percentage of my wholesale
price because I have my originals cast and this market therefore is
highly dependant on the spot. I’d lose business if my galleries
could not count on a consistent price. My average price is only about
$25, so I sell a lot of pieces.

What are other wholesale artists doing?

Nancy Goodenough


#10

RC and Daniel

$750 an ounce for gold is still down 25% from the price I was
paying two or three months ago. Not half, but a nice, noticeable
difference. 

I need to correct my original statement. I use mostly silver and it
is down half of what it was 6 months ago, not gold. I should have
clarified that much better.

Nancy

I do only wholesale, a lot of it, and retailers need a consistent
price. 

Nancy, I think wholesale buyers need to be educated too. If we have
to buy our goods at daily cost, then retailers need to be educated
on the ups and downs of the market too which explains the
inconsistency they will see. I do have some wholesale accounts and
when they buy I have the opportunity to talk to them about the
metals market. They do seem to understand (oddly enough) I guess
because they deal with other merchants who may tell them the same
thing. I also have sent them notes keeping them abreast of the
market. They seem to appreciate the explanation that explains what’s
happening on Wall Street. (Which is a whole other crazy issue)

Maybe that is the answer to talking to end customers too. Education!

Holly


#11
that certainly makes sense, but doesn't work with my market. Some
fellow artists tried charging a surcharge when the silver rate was
racing up, and it was not well received by retailers and they
dropped that method, just kept raising prices. 

I’m not entirely ignorant of the wholesale market having spent a good
five years in my early days doing nothing but wholesale. I think, as
with all jewelry, you can create the market yourself if your product
is good enough. It doesn’t really matter what other wholesalers are
doing, it matters only how you do it. If your product is in demand
than the customers will learn to deal with a sliding scale (which if
you point out to them may mean lower prices in the future, I’m sure
most wouldn’t object to). But if that isn’t going to work for you,
then there is my second thought on the matter. Price your work at the
highest silver has been in the last year. If it goes down you make
some extra money. If it goes up higher, at least you’ve already
covered most of the increase. Before saying you can’t charge that
much, I urge you to go look (as I recently posted on this subject) in
the Nieman Marcus catalog at the jewelry on sale in there. Look at
the prices they’re getting for mostly boring designs, with cheap
stones and whatever metal they can sell for a monstrous markup now.
Me & Ro, one of those “designers” is selling a lot of 10k gold (since
metal prices went up). 10k gold as designer jewelry!! The salespeople
told me it was because of the “unique” color they get from it.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
www.spirerjewelers.com


#12
What are other wholesale artists doing? 

What I’m seeing from some manufacturers is that they have printed
tickets with a suggested retail and they give a wholesale factor from
there. An item I saw awhile ago had a factor of .33(triple key) then
recently it was .38 Retail $675 x.33 = 222.75 wholesale… became
$675 x.38 = 256.50

I think what makes this work is that the retailer does not see a
separate surcharge (+$XX) so doesn’t feel he’s being charged more for
the same thing. An additional $33.75 in the above example.

It also makes it easy for the maker to adjust to a fluctuating
market. This works a little different than just saying “well the
market is up or down 10% so my price is 10% up or down too.” The
material is only a portion of the cost to produce.

But another manufacturer has held completely steady on his pricing,
regardless of the market. Maybe he’s sitting on a horde of old gold,
I dunno. But I’ll tell you, as a buyer, its reassuring to know I can
depend on the catalog price and I’ll be more comfortable reordering
next time.


#13

Many catalogs have a statement that prices of items in the catalog
are listed at a given price of gold e.g. $400. If gold is now at
$800, the price of the item is doubled. If gold is $600, the price is
now 50% higher.

Obviously this method also ups the mfg. cost of the item as well, bu
a little more profit never hurt anyone.

Dave


#14
The cost of silver is a high percentage of my wholesale price
because I have my originals cast and this market therefore is
highly dependant on the spot. I'd lose business if my galleries
could not count on a consistent price. My average price is only
about $25, so I sell a lot of pieces. 

What are other wholesale artists doing?

Daniel already said this - this whole issue has already been solved
in the industry. Precious metals are sold at the price of the day of
purchase, plus whatever. Noel said she got in trouble in a class
because she “broke” that rule, and I gather priced supplies at a
flat rate. Rio Grande and pretty much everybody has it right in the
book: “Sheet silver is spot plus $xx.xx’”. If you have a line of
castings they are priced at spot plus the $15 profit and labor you
need to get. A store that squawks at that is living in some other
world, because all of this is SOP and well known. Likely the problem
is that people are explaining it instead of just pricing it out. I’m
afraid that this is the solution to the question - some sort of
patchwork workaround with uncooperative stores is out of the realm
of my own ability. Some things are just simple… And this particular
quote:

I'd lose business if my galleries could not count on a consistent
price. 

Is one reason I refuse all silver work. Spot plus markup IS a
consistent price. The silver business can tend to want to operate in
a nether world between base metals and precious metals. It just
can’t do that at $20/oz.

http://www.donivanandmaggiora.com


#15

The uncertain market makes a real problem for me. Several of the
galleries that carried my work have closed. Another has changed
their commission to 60/40–with the artists getting 40%. I can
understand this, as their expenses have gone up considerably, but
either I raise my prices, or just break even. Now that the prices of
raw materials have gone down a bit, I shall stock up as my inventory
of silver is down. However, it has come to the point where I have to
decide on whether to forget silver, and switch to gold and aim for a
more affluent market.—those who are not being hurt by the high cost
of gas, and other necessities.

Alma


#16
But if that isn't going to work for you, then there is my second
thought on the matter. Price your work at the highest silver has
been in the last year. 

Daniel, for now I’m going for a similar solution. I’ve chosen a rate
in the middle. It’s not so much that I lose a lot if it goes to the
recent high and I’m not ripping off my retailers if it stays low.

This seems like an obvious solution, I realize, but a few dollars up
or down translates into $10-$12 difference in the retail price and
that can be big in this market where the retail price is $50-80.

And, Holly, since I have hundreds of retailers, it’s not practical
to contact each one as the market goes up and down. Yes, I do have a
conversation when we discuss an order, but on a practical matter
they need some stability in pricing.

Thanks for the input.
Nancy Goodenough


#17

Some one once said…“These are strange times we live in!”

A few thoughts for all the Jewelers who make their living in the
trade. I think most all of us love what we do and wouldn’t want to do
any thing else. Also many of us are at an age where it would be hard
to make a living in any other field.

I got in on the gold, silver and platinum price breaks in the past
week.

(amen) My supply will only last till its gone. Then what, will the
prices be fair enough to make a profit. I’ve been hearing stories of
four digit gold prices by Jan. of 2009.

Gold miners have all lowered output, say its too costly to mine at
750 and $800 an ounce prices. Many gold mines have closed their doors
until prices reach $900 to $1200 an ounce.

I could go on and on.

Is this something we are all witnessing for the first time? The
Absolutely Greatest part of all this Insaneity is…

Wait a while, Things will change

Jerry Levin
Fine Jewelry- behind closed doors


#18

Is anyone watching gold this morning? (Wednesday) Gold Up $50,
silver up $.77 and platinum up $40!

The effect NOW?-Ouch!

How does this effect buying raw material supplies? Many wait and
hope for a more stable market.

Daniel Ballard


#19
Noel said she got in trouble in a class because she "broke" that
rule, and I gather priced supplies at a flat rate.

I don’t suppose it really matters, but what I said was I lost money
because I am required to commit to a kit cost almost a year ahead
and, my first year, didn’t look closely enough at my crystal ball to
anticipate the precipitous rise in the cost of silver. I wasn’t
trying to make much profit on the kits and didn’t mark up the
materials enough. A fellow-teacher at one of the events referred to
the “fact” that we weren’t there for the pay, that we made our money
on the kit fees. That opened my eyes! Since then, as I said, I make
sure there’s room for profit in the fees I set, even if the price of
silver rises again. If it goes WAY up, at least I won’t lose money!

Noel


#20

Nancy - How to price a year in advance is always tough, and in
today’s metals market it is even harder. I suggest that you put a
small disclaimer in your catalog on the order of:

The prices here are based on $14 silver and are subject to change
if silver pricing changes more than 15% from this base price.

Admittedly, this isn’t the most elegant solution, but it is very
workable, it is set at a silver amount that is high but realistic,
and it covers you in this volatile market. Your customers can’t be
unaware of the pricing swings of commodities now, so they should
understand that through this statement you will do everything in
your power to hold to the prices you have listed, but may have to
change if the markets go out of control again.

BBR - Sandi Graves
Stormcloud Trading Co (Beadstorm)
Saint Paul, Minnesota