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Markup on diamonds


#1

Hi, Y’all! I’ve got a dilema. We are trying to offer pieces with
diamonds- something we’ve never done before.My dilema is “How much
do you mark up a piece with diamonds in it?” Or actually, I should
say the problem is that once all is said and done, our rep walks
away with more profit than us, and we’re the one’s who have the
costs, and actually do the work on the piece. 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)

Thank for your input.
Tim


#2

If you are getting true wholesale on the diamond, you should be
marking the diamond up. Many jewelry stores triple the wholesale
cost.


#3

Tim, If you keystone your cost in the ring you described your
selling price should have been $2200.00. The rep would get about
$240.00 and that would leave you quite a bit more profit on that
piece. It seems when it comes to diamonds I’ve seen them double and
triple keyed unless you get into larger high quality stones and
then a company will want to keep a 35% minimum margin and will
shoot for 65% if they can get it. It really depends on how much
you have in it and how much you have to get out of it. PATTY in
Spfld. Missouri


#4

Hi folks, I normally deal with fairly small diamonds (under 1/4
ct) that I mark up 2 1/2 x . I’m working on a couple of custom
ring estimates that involve 1/3 and 1/2 ct diamonds. I’m
wondering what do other people do as far as pricing when
selling directly to the customer (ie not wholesaling or
gallery). Thanks for your input, Michelle

Sumiche Handwrought Jewelry
Creating what you want in gold, platinum and silver
http://www.efn.org/~sumiche


#5

Hoo boy you are going to hear everything on this one. Pricing
of diamonds retail is a major issue. There are people working on
as little as 1-2% and there are others who will keystone or
triple keystone. I think you have to evaluate the type of
operation you are and what it costs YOU to sell the stone, i.e.
have sources, make good buys, rent, overhead, time getting the
stones etc. Or you can sell better make diamonds and make a
higher markup usually just because most people don’t carry them.
Generally speaking, the smaller the stones the more you can
charge, because if you sell a $10,000 diamond and mark it up 20%
you can still make $2000, but if you sell a $500 diamond you only
make $100. Daniel R. Spirer, GG Spirer Somes Jewelers 1794
Massachusetts Ave Cambridge, MA 02140 617-491-6000


#6

Michelle, Depends entirely upon what expenses you need to cover
and what you want to make for your work. There is no universal
rule of thumb - it varies from just enough to feed your cat to
everything that the traffic will bear. Usually don’t cut back on
my markups until I get above the $5,000 retail range. You need to
make a bit more on the good jobs to make up for the losses on the
jobs where, through no fault of your own, you barely break even,
or (very infrequently, we hope) lose your shirt - you know, the
ones where the solder joint you’ve done a thousand times
inexplicably turns the whole mounting into a heap of glowing
metal, then the lovely stone you had custom cut just for this job
decides to object to your setting technique by shattering into a
lovely pile of glittering shards, and then … well, you get the
idea. Rejoice in the good jobs - they make the
drudgery fly by. Mike