You have a couple of solutions: First, you can set your prices in
tiers, the first will cover the market up to a certain market, say
$7.00 Silver. The next tier could cover up to $8.00 and so forth
setting up different price levels. And, naturally you would price
your product at the highest level in that tier. That way, the market
could vary from say $6.00 to seven and you would be priced at seven
and would have eliminated any exposure to the market. Should the
market go above seven dollars you would price using the next tier and
so on. This is a very reasonable method for you and the customer.
The next way would be to change price every day by calculating metal
value increments to cover the daily fluctuation of the metal market.
Bill on the day after shipment and buy enough metal to replace the
amount of metal sold the day before. This technique would allow you
to maintain your metal inventory without exposure to the market. You
wouldn’t make any money speculating on the market using this
approach. But , you would be safe from exposure and allowed to make
normal profit margins. But, you claim the buyer would not be
receptive to this method.
A third method would be to purchase enough metal to cover all your
orders, calculate the price at that market and fix the sell price.
Often when a buyer wants to fix price in the precious metal market
he would pay for the raw silver in advance to secure his price
position. For a supplier to guarantee the price of finished goods in
a volatile rising market is a very risky policy.
Try fixing the price of future silver shipments with one of your
suppliers! Sorry! Business should be a two way street, everyone has
to work together in situations like this. We make findings and our
computers are set up to change our prices every day. And, the metal
we sell today is replaced tomorrow.