I dunno Jerry. It seems remarkably reminiscent of the run up in gold
and silver prices in the mid-70s. So I wouldn’t say it’s unique.
RC
Is anyone watching gold this morning? (Wednesday) Gold Up $50, silver up $.77 and platinum up $40! The effect NOW?-Ouch!
But wasn’t platinum recently at $2270? It dropped under $1100 before
the $40 increase. And didn’t gold peak at over $1000. And it’s still
only at $850. There’s no ouch there. Personally I’m breathing a sigh
of relief on the prices.
Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
Is anyone watching gold this morning? (Wednesday) Gold Up $50, silver up $.77 and platinum up $40! The effect NOW?-Ouch!
News this evening said it was an all time record, today, for a one
day dollar price jump in gold. At one point during the day, the
futures market for december delivery was up over 90 dollars, before
relaxing a bit. Spot price was up, I think, over 70… Nice if you
happen to have forgotten to send in your scrap for refining back this
last spring, but not as nice if you placed an order for metal
yesterday, that got priced at today’s close (like we did…)
Cheers
Peter
And today gold is back down again. Time to start looking at the long
term and not the short on this kind of stuff.
Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
But wasn't platinum recently at $2270? It dropped under $1100 before the $40 increase. And didn't gold peak at over $1000. And it's still only at $850. There's no ouch there. Personally I'm breathing a sigh of reliefon the prices.
I was wondering when someone would mention that platinum is only
$200/oz above gold. It would seem to be a good time to buy platinum
before it goes up, or do you think it will fall further? BTW, it was
up above $2200 in February, 2008.
Nel
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.
Tell me about it!!! I keep those catalogs around for whenever I feel
unsure about my prices! And have you actually felt some of that
stuff? It’s really light weight for what you’re getting. It probably
doesn’t hurt that Neimans has a huge markup.
BTW- Me & Ro has been selling 10K forever. It’s part of their less
expensive line… kinda marketed with their silver. “unique color”?
yeah, the color of 10k!!!
Amery Carriere Designs
Romantic Jewelry with an Edge
www.amerycarriere.com
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..
When you are wholesale only and relying on your stores to put food
on the table a few stores that squawk can hit hard. It is not SOP and
well known with every store. That’s making a huge assumption that
we’re all selling to stores that watch the market as much as we do.
Some of us also sell to stores that have no idea how much the market
is really effecting us and need to be educated.
One of my best stores of the year is a shoe store. Yes, a shoe
store!! She sells high end $800 shoes on a regular basis. A few
hundred dollar silver necklace is a nice add-on to someone buying a
few pairs of $500-800 shoes! But, her focus is not jewelry. She
understands that metals are up, but since she’s not directly
involved
with it she really doesn’t comprehend the extent that they have
increased and the effect it has on my production. She also doesn’t
understand why 1 pt white diamonds are more expensive than champagne.
But I’m helping!
What I’m doing for my next catalog is making sure I’m covered if
silver increases again. I’ll find a happy medium between what it is
now and the high and then adjust from there. I find it’s much easier
to offer a small discount with a quantity order if my prices are a
little inflated rather than add! Especially if I get a reorder from
a store that’s a special order from a customer and they’ve already
quoted a price. that’s happened a lot this year. I’m trying to
educate my retailers especially those that are not jewelry stores
and don’t watch the market as closely as we do.
This year my prices were not high enough and I was scrambling to get
new price lists out. Oh, another thing I do is make sure my price
list is separate from my actual catalog that way I can send updated
lists as pdfs via email when needed. What I did was do an email blast
for my current customers and then anyone who ordered from old line
sheets got a set of the new price list informing them of the change.
When you have posted prices like on a line sheet it’s sometimes hard
to “price it out” without any sort of explanation.
Amery Carriere Designs
Romantic Jewelry with an Edge
www.amerycarriere.com
I was wondering when someone would mention that platinum is only $200/oz above gold.
Yes, and thank the gods for that! The fact that platinum is “only”
$200 above gold still means that platinum jewelry costs at least
twice as much as gold (there is no 14kt. platinum, book density of
14kt. is 13.4 while we use 22 for Pt., etc.). But I’m pretty much of
a platinum specialist - people bring me platinum work because I’m
good at it, and the business has pretty well dried up the last year,
or at least the last 6 months. Double the price of gold is OK for
those who want it, but paying $2,000 for a wedding band was really
out there, which is where it went for a time. And that’s really the
soft part of it - rhodium is finally manageable at $4410 - is was
$9745, or $313/gm. !!!
I am wondering what purchasing strategies make sense when precious
metals prices are so unpredictable. Surely the font of wisdom that is
Orchid must have some insight.
Mutual fund investors are advised to buy a regular amount at regular
intervals so that the cost is averaged out over time. But it seems
that buying gold for production is going to give up any quantity
price break if you buy that way, unless you are buying quite a lot at
regular intervals.
Does it make sense to buy a certain amount of gold at some regular
interval, just to average out the cost? This, rather than hold off
until it is absolutely needed and then have to pay whatever the
market is that day.
Last week I lucked out. I had a purchase with a supplier for gold
wire and settings that was billed early in the week, before the
prices shot up. But most of the gold I use is for casting and a lot
of unsold older stock has gone in the crucible this year. Cannot do
that much longer.
Steve Walker
I’ve gotten a chuckle out of the references to Neiman Marcus and
their prices. I have always referred to them as “Needless Markup”.
I am wondering what purchasing strategies make sense when precious metals prices are so unpredictable. Surely the font of wisdom that is Orchid must have some insight.
I think it depends on how large your company is. If you’re buying
hundreds of thousands (or more) in gold a year then yes, it might be
worthwhile to try to buy a regular amount on a regular basis to try
to average out your costs. On the other hand, if you’re smaller, it
just doesn’t make much sense to stockpile metal. It costs a lot of
money to inventory stuff you aren’t using. With the ability of many
companies to ship a product to you overnight the day after you order
it, you have to weigh the relative costs. Personally I think keeping
the inventory as low as possible and ordering only what you need is
the best way to go.
Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
I am wondering what purchasing strategies make sense when precious metals prices are so unpredictable. Surely the font of wisdom that is Orchid must have some insight.
The best way to purchase precious metals is to buy the same amount
of metal that you sell on the day that you sell it. You should also
change your sales prices based on the spot metal price for that day.
This way you eliminate the cost variation of the metals cost to you.
The problem is of course you need to sell enough metal to make your
purchases worthwhile. This is how the big boys do it. For studio
jewelers and small businesses this is tough. But no matter how you
do it the closer in time you can make your purchases to your sales
the less the cost fluctuations in the market will affect you.
James Binnion
@James_Binnion
James Binnion Metal Arts
“Needless Markup” is a fairly common name around here too, but Saks
sells the same “designer” jewelers for the prices. It isn’t the
department stores that set the prices, it’s the “designers” (by way
of setting their wholesale prices).
Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers
Holly,
As you can see from all the responses, there is more than one way to
skin acat. Regardless of which path you choose, it’s always a good
business p= ractice to minimize your inventory (within reason) and
maximize throughput, since holding inventory has a cost.
However, if you decide to stock up on gold/silver, recognize that
this action is an investment action, a hedge, not an inventory
decision. You can also hedge metal prices through futures contracts.
One is leveraged, the other is not. But they are both investment
decisions. Make sure you understand the benefits and risks that are
inherent with hedging before making this decision.
Jamie
I am wondering what purchasing strategies make sense when precious metals prices are so unpredictable. Surely the font of wisdom that is Orchid must have some insight.
I guess the practical answer is to watch the metals market and buy
when it is lower and buy from a supplier that sells according to the
daily spot price. When buying sheet metal, wire, and such this may
be easier then when you cast (if you send it out to do so). They
usually go by the spot on the day they bill you verses the day you
order which can be as much as a couple weeks down the line, so you
can just hope the price doesn’t go up too much.
James wrote
The best way to purchase precious metals is to buy the same amount of metal that you sell on the day that you sell it....For studio jewelers and small businesses this is tough.
You’re right, that is tough for studio jewelers. For those that
cast, there are usually minimums and price breaks for quantity
purchases, so stocking for a season is more practical than stocking
for how much you can sell in day.
Yep, Jamie there is more than one way to skin a cat, and I think it
is interesting to get all of these different perspectives.
Holly