I am trying to work out price estimates for a men’s platinum wedding
band. It happens to be for a family member, but I’m trying to apply
the same pricing formulas that I would with any direct customer,
which is to sell at 2-2.5 times my cost (essentially, wholesale
pricing). One of the selling points in convincing my family members
to buy from me instead of a store is that they would save money
(because they are paying wholesale instead of retail price).
However, my price calculations are coming up extremely close, and in
some cases over, prices for a similar band at retailers that I’ve
researched from Zales, to Tiffany to random retailers that show up in
google. It would seem to me that because of the retail mark-up, my
pricing should be coming out at about half of what retailers
advertise. When I’ve done women’s bands before, this has pretty much
worked out to be the case.
So I’m wondering, is there a different markup typically used for men
in retail? Or a different markup for higher priced items, in order to
keep the retails reasonable? If these retailers are marking up 2-3
times (as seems to be the typical markup according to several
sources), and they are buying from a wholesaler who marks up 2-3
times, I can’t imagine how they are arriving at these prices.
For example: I found this ring online which even tells you the
weight of the ring.
The value of 14.4 grams of platinum (according to dendritics.com’s
precious metal calculator) is $599.38, and they are selling the ring
for $1029. That’s less than twice the value of only the platinum.
What about the labor? What about the wholesaler’s markup? Does
anyone have any insight into how these people are pricing these
things so low? Alternatively, if anyone has any tips/suggestions on
pricing formulas or pricing ethics I’d love to hear them.