Pricing Gold Jewelry, An Insider’s POV

Keystone Pricing

Keystone pricing is taking the wholesale cost of a piece of jewelry and marking it up 100%.

Information site, About.Com, takes this a step further. They advise entrepreneurs:

“A simple formula when pricing for wholesale is to add up your costs (this includes labor, overhead, and supplies) and multiply by 2. For retail, do the same, but multiply by 2.5 to 3.”

In other words, they advise taking not only the cost of the jewelry into account, but also other variable business expenses to determine the net cost of jewelry and then to multiply by 2 to obtain a wholesale cost or 2.5  to 3 times to obtain a retail price.

Keystone refers to doubling the cost of jewelry, whereas triple keystone is tripling the cost of jewelry to determine the retail value (A staggering 300% Mark Up)!

This is not uncommon in the jewelry industry and some jewelers mark up jewelry even higher.

Apples of Gold Pricing Methodology

Where Apples of Gold Jewelry differs significantly from standard jewelry industry pricing is that at best we mark up our jewelry an average of 30% from the cost of the actual merchandise. On select designer pieces, we may mark up select items 40% – 50% (you can call this half-keystone, if you will).

Compare this to 100% to 300% markup of the traditional jeweler, and you will see why customers often call us to ask us how we are able to sell jewelry for so low.

This is where we stand apart from most traditional jewelers and even online jewelers. When comparing Apples of Gold to traditional jewelers we are usually 50% below retail and when comparing to online stores, Apples of Gold Jewelry is an average of 30% lower than most online jewelry competitors.

This leads us to our value-based pricing methodology.

Value Based Pricing

Apples of Gold strives to determine its jewelry prices based on the value that a piece of jewelry creates for our customers. We believe that this is more profitable for us in the long term–as we serve our customers and provide an affordable, quality product.

By selling with greater volume nationally across all U.S. States and internationally across Europe, Asia, Canada, and other parts of the globe, and by limiting overhead, and very significantly not having the huge burden of stocking every jewelry item in-house, we are able to sell at vastly lower prices than most jewelers, while providing a fair valuation of our gold jewelry.

Additionally, we combine our value-based pricing with a “fair pricing” method. “Sometimes it simply doesn’t matter what the value of the product is, even if you don’t have any direct competition. There is simply a limit to what consumers perceive as ‘fair’. If it’s obvious that your product only cost $20 to manufacture, even if it delivered $10,000 in value, you’d have a hard time charging two or three thousand dollars for it — people would just feel like they were being gouged” (entrepreneurs.about.com).

The Bottom Line

Most jewelers have to charge anywhere from 100-300% to maintain a profitable business. With large overhead, shifting gold and metals prices, employee costs, and most costly–expensive inventory–they cannot survive on smaller than keystone margins.

The difference with online jewelers–and especially those who have deep and mutually beneficial relationships with manufacturers and wholesalers, the markup on jewelry will be significantly less, usually not breaching 30%-50%.

At Apples of Gold, we recently were in talks with one of our major suppliers to get lower prices to obtain a 40-50% margin on products that they supply us, and the idea was quickly dismissed–because both we and our suppliers understood that to be competitive in the online environment, such a mark-up is difficult to achieve. We finally settled on a 29.5% margin on items that we purchase from them. So an item that cost us $300, we are selling for about $385.00. A traditional jeweler would normally sell an item obtained at wholesale for $300 for $600 (keystone), or possibly $900 (triple keystone).

That is why Apples of Gold rightly advertises our products are approx. 50% below standard retail (and that is a conservative estimate).

Learn more about Apples of Gold Jewelry and our value-based pricing methodology.

Featured Products in this Post

Men’s 14K Gold Angular Link Bracelet

Sea-Foam Green Amethyst and Diamond Ring

Art Deco 1/4 Carat Diamond Ring

Caedmon Celtic Wedding Band

Featured on ApplesofGold.Com.

Jewelry Hot List

Last was the year of new jewelry for Apples of Gold, with the addition of over 600 new, unique jewelry pieces. Below are some of the “hot seller” highlights from our newest fine jewelry pieces:

Black Diamond Rings became a hit for Apples of Gold with our Art Deco Black Diamond Ring and so we added several new designer pieces to our popular black diamond jewelry collection, including a Benchmark Black and White Diamond Eternity Band, 1 Carat Black and White Diamond Cross Pendant, as well as our all black diamond solid gold cross pendant for men.

Of course, we love our blue diamond jewelry too!

By far, our best selling blue diamond ring was our 0.93 Carat Blue and White Diamond Swirl Ring. Our popular blue diamond jewelry pieces was expanded to include our best selling 0.93 Carat blue and white diamond swirl ring. We added many other blue diamond rings to our blue diamond jewelry collection as well that turned quite a few heads.

Wedding Bands have always been at the heart of our jewelry line and Paisley Wedding Bands have always been at the top of our list. Our Paisley Collection was expanded with a new deeply engraved paisley wedding band in 14k white gold, 14k yellow gold, and our most popular paisley release: the 14k rose gold paisley wedding band.

It was our goal to added many new unique personalized jewelry pieces to our collection, and we met our initial goals!   The most popular being our Personalized Gemstone Circle Pendant, the Engravable Boy Gemstone Pendant and Engravable Girl Gemstone Pendant, our Personalized Gemstone Baby Shoe Pendant, and Personalized Gemstone Heart Pendant.

We also introduced a new line of Personalized Disney Jewelry, and new gold name pendants.

Benchmark Wedding Bands - A high-end wedding ring brand which includes a Lifetime Warranty and Lifetime Re-Sizing Policy. We plan on adding many new Benchmark styles in 2009.

Official Disney Jewelry – featuring popular Disney characters such as Tinkerbell Jewelry, Mickey Mouse Jewelry, Winnie the Pooh Jewelry, and more! Our Personalized Disney Jewelry collection also proved very popular and all very affordable!

Read more about our Disney Jewelry line: Disney Jewelry for an Imaginative Holiday, A Man Named Walt, and our official Disney Jewelry Release.

We plan on adding more popular Disney characters in 2009.

Apples of Gold’s most popular cross, The Polished Solid Gold Cross Pendant also saw a new addition, including: 18K Gold Cross Pendant, an 18K White Gold Cross Pendant,  and a Men’s Platinum Cross Pendant.

This cross is fully solid gold and finished on both sides (not hollow), measuring approx. 1 1/4″ tall x 1″ across and 2.5mm thick. Although originally crafted for men, both men and women enjoy this beautiful, expression of Christian faith.

This amazing cross was followed by the release of our 18K Gold Onyx Cross Pendant.

What is better than your own writing or the handwriting of your beloved, engraved onto a wedding band? Apples of Gold Jewelry created the concept of engraving your own writing onto a gold band with our new Personalized Handwritten Wedding Bands in 14k gold yellow, 14k white gold, and 14k rose gold.

Simply scan your handwriting onto your computer and email it to us! We’ll do the rest!

Our unique Victorian-Style Three Stone Diamond Ring became a hot seller in 2008 and as platinum prices dropped, we decided it was the perfect time to offer a Victorian-Style 1 Carat Three Stone Diamond Ring in Platinum also. Also available as a three stone 1 carat diamond engagement ring in 14k white gold or a 1/2 Carat Platinum Three Stone Diamond Engagement Ring.

We look forward to 2009 as we expect to add more items than we did in 2008! We expect to double our production in 2009, with 500 new jewelry pieces being added in the 1st Quarter alone. Yes, we plan on keeping the Apples of Gold Jewelry elves very busy through 2009!

Best Jewelry Gifts for $125 and Less!

Apples of Gold has selected its best 15 jewelry gift ideas ranging in price from $65 to $125. Free FedEx shipping is included.

1. Diamond Harmony Cross Pendant in 14K White Gold, Price: $125

The elegant, architectural, polished lines of this cross embody balance and harmony. One diamond set in the center symbolizes the light and love of God.

2. Love Knot Earrings in 14K Yellow Gold, Price: $85

Elegant, beautifully polished love knot earrings symbolize eterntal love in 14k yellow gold. Also available in 14k white gold.

3. Beveled Globe Smoky Quartz Ring in Sterling Silver, Price: $95

This simple nickel-free sterling silver ring brandishes a majestic, genuine bevel-cut 12mm smoky quartz gemstone.

4. 14K Rose Gold Hoop Earrings, Price: $115

14K Rose Gold is the newest trend in hoop earrings. Measuring 1 1/8″ in diameter and 2.75mm in thickness.

5. Tinkerbell Pendant in 14K Solid Gold, Price: $99

Official Disney Fine Jewelry. Also Check Out Mickey, Pooh, Cinderella, and more Disney Jewelry.

6. Men’s Titanium Cross Pendant, Price: $65

One of our most popular men’s crosses. Made with pure titanium in a brushed finish with polished beveled edges.

7. Garnet Gemstone Stud Earrings set in 14K White Gold, Price: $125

Also available in amethyst, emerald, sapphire, ruby, tanzanite, and more gemstone stud earrings (prices may vary for different gemstones).

8. Sterling Silver Spinner “Love” Ring, Price: $95

A hand-crafted nickel-free sterling silver band surrounded by a spinning ring, engraved with the word, “Love”.

9. “The Arca” Men’s Titanium Bracelet, Price: $125

Forza Tesori has created an awesome, two-toned air craft grade titanium bracelet for guys who know a solid investment when they see one. The bracelet has a brilliant finish with shiny accents and smooth lines that are comfortable in any setting.

10. Bible Pendant in 14K Gold (Bible Opens), Price: $125

Our 14k gold Holy Bible Pendant Opens with numerous pages to reveal the Lord’s Prayer in the beautiful King James Version.

11. Two-Toned Dual Hoop Earrings in 14K Gold. Price: $95

Uniquely made and finely crafted in 14k two-tone gold, our dual hoop earrings are a perfect fit. Measures approx. 3/4″ in size and is light and extremely comfortable on the ears.

12. Heart Hoop Earrings in 14K Gold, Price: $65

These cute 1/2″ heart earrings make the perfect gift. Light and comfortable to wear. Also available in white gold.

13. Sapphire and Diamond Drop Pendant, Price: $124

A deep 0.60 carat sapphire center stone set in 10k white gold with accent diamonds. White gold chain included.

14. Classic 14K Gold Crucifix Pendant, Price: $115

This is our best selling crucifix pendant. Classic, traditional, elegant. Measures approx. 1 1/2″ tall.

15. Three Stone Diamond Earrings in 14K White Gold, Price: $119

A Trinity is symbolic of many things, including God, perfection, and unity. Nothing expresses this than the purity of diamonds and white gold.

10% Off All Jewelry through November 30th!

(COUPON CODE: APPLES10PT) – Enjoy 10% OFF UP TO $50 on all jewelry from Apples of Gold, now through November 30, 2008!

Choose from our high-end gold jewelry, wedding rings, gemstone jewelry, diamond jewelry, personalized jewelry, or any item from our store!

Coupon max. value: $50 per order. May be used on any number of orders through expiration date.

Use coupon code: APPLES10PT during Check Out on any regular item from our store!

Check below also for more coupons, including our year-end sale of 40% on Von Dutch Watches!