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Profit in what we do


#1

Dear John & All,

This is a good example of how we view money and what we do.

Some artistic folks will sneer at anything but pure creativity. How
dare I consider money entering my jewelry world? Well, look around
and see what is happening to our jewelry world. It is called
globalization. We recently lost a decent size manufacturer to China.
Bang out the door after Christmas and unemployment for about two
dozen jewelers, diamond setters and polishers. I’m talking about gold
and sterling jewelry not brass or copper.

My point today is profit. I teach two or three classes that include
pricing jewelry. Profit and time are a major factor. Your base line
expense is time and materials. Keep track or those. In the
traditional pricing world a wholesale mark up of approximately 40% is
added on to that cost and you have the price to charge a store. This
is by no means the industry standard. Fame and recognition will get
more. Harder now for everyone with $1500.00 per ounce gold. A store
will triple the price and offer a discount, because everyone wants a
deal. Most stores will never actually charge less than one keystone
which is a 100% mark up. Hello China labor costs!!

Here is the comparison. If you can at all find a piece anywhere that
resembles what you are making, the race is on. Stuller is a great
catalog to obtain. They offer a picture with weight, price and gold
market price right on it. So I can determine a price per pennyweight
to compare. There is a window or profit now that I can compete
against. For the profit, I can either make the piece or buy it.
Better yet you can determine a price per pennyweight they charge. I
need to know that. Especially with today’s market and mark ups.

Another pricing standard is price by weight. In my own shop I had an
account for many years that the rings were put on the scale as
castings and I doubled the cost and out the door they went. They were
a finished store quality ring sold by weight only. If I could make
them fast enough I did OK. The weight only factor is mainly in import
product, but for a few years I did quite well. This was also a 14
karat ring line that sold several rings a week. Gone now with the
current market.

If you see a product imported, you will not be able most time to
compete with the price. Machine made chains are the best example of
what we cannot make by hand any longer. Several other items come to
mind.

Currently my gold sales are primarily in wedding sets. Silver still
sells and bronze, copper and alloy are entering my line.

Good fortune to all.

Regards,

Todd Hawkinson
Southeast Technical College
www.southeastermn.edu/jewelry


#2

About globalization in the jewelry business…

To resist is futile… you will be assimilated. That’s true not
only for the Starship Enterprise, but for most all of us. To resist
change is futile. I often wonder what kind of lifestyle the Celtic
goldsmith had compared to others in his village. He was working with
beautiful things but did he have a higher status or a higher level
standard of living? He was after all an artisan who worked with his
hands. I don’t believe the jewelry industry in North America will
die, but I do believe it will change because it will be forced to do
just that. We cannot possibly compete with China -

at least not today. I don’t try to compete with the jewelry
department at Walmart. But then it is also not my style of jewelry.
But a person still has to put a roof over the heads of the family
members, put food on the table and educate the children so we should
never sneer at the business aspect of what we do. New materials, new
methods will come into our repetoire. If we don’t adapt to changing
market conditions, we die as metalworkers. Another aspect of
marketing is the “greens” and if I can honestly put forward a product
that has a green element in it, I will not hesitate to put it in
capital letters in my marketing material. I think the basic thing is
know which market you are trying to serve. I live on a little island,
the smallest Province in Canada. It has a large agricultural
component in the local economy. But if farmers don’t adapt and grow
"heritage" vegetables, “organic” produce, new livestock such as
alpacas and exotic cattle, they are forced to take off-farm
employment and someday the farm is carved up into new housing
developments. Change… is a scary thing and yet it is what has
brought us to one of the highest standards of living in the world.
Now if I can only survive the damn post office strike that is looming
on the horizon…

Make beautiful, original things for unique people.

Barbara on a cloudy night on Prince Edward Island


#3
Well, look around and see what is happening to our jewelry world.
It is calledglobalization. 

Todd gets it… Sneer away but the painter who is turning those out
is paying his/her rent and feeding his/her family. I had a friend who
worked in a painting factory in China (“Any painting, $49.95!”) He
told me about getting old paint-by-numbers kits and painting them
freehand, with real paints, and selling those. Just for the
compositions. The was 1 (count 'em) Picasso, and 1 (count 'em)
Matisse, and then there’s all the rest of us.

production that John is so in love with, and the high end. 

If the only path, which is open to you is production, do yourself a
favor and find something else to do. English as a second language, I
guess, as I never used the word love. I’m a special order jeweler
and I don’t work in a bank or have two failed jewelry businesses that
we know of. Been in Suite 959 for 28 years now. If anybody can click
their heels together three times and go “poof” and become Michael
Perkin, I’d like to watch that. You gots to pay your dues, whether
it’s a formal apprenticeship or grinding away at the boring parts
till you DO get it. That’s how jewelers and fine craftspeople of all
kinds are made. The real point is that Todd really DOES get it. There
is so much of it in America that I doubt we can recover in any
large-scale sense. That being that the model for so many people is
working solo in the garage, and it’s the rare person who ever rises
above that. Sure, you sold $12,000 worth of jewelry last year - I
sold that much last MONTH. Scale, scope, perspective and greatly much
the fact that we grow exponentially more when we work together, in
teams, collaborations or what have you. I am where I am today in part
because I walked into places that were over my head and had to learn
new things every day just to keep up. That’s how you gain at least
some familiarity with CNC, induction welding and casting, machine
setting, presswork and tool and die and on and on and on. Which they
do in China, but here so many want to work alone in the second
bedroom… An no, I’m not going to waste my time making a ring
that I can simply buy for $300. I DO get it, that’s the point, too.
The fact that somebody else made it does not equate to poor quality.
Delegate authority…In with the left hand, out with the right,
thank you very much!