Apples of Gold Jewelry: JCK Las Vegas

May 30th, 2009–Apples of Gold heads to Las Vegas for the annual JCK Las Vegas Jewelry Show–considered the largest and most prevalent fine jewelry exhibition in the world, with a global outreach that far surpasses any convention of its type. It simply has to be seen to be believed.

It is a time for “team building” within our own company as well as strengthening relationships with current suppliers, and discovering new designers. Just being there envelops your senses in the latest and most rarefied fashions to hit the jewelry industry.

As expected, turn-out was much more conservative this year, with turbulent economic news on everyone’s minds and the unfortunate reality for many manufacturers and wholesalers that the financial expenditure of exhibiting, and for some, merely attending the show is no longer feasible (not to mention the scores of jewelers who have closed up shop permanently).

The previous year we had seen about a 30% decrease in attendance (utilizing our keen visual observance) as the first signs of economic trouble descended upon the jewelry industry in 2008. This year, 2009, as I strode the near-empty halls and conversed with fellow observant jewelers, it had seemed that we had not a 30% drop in attendance, but a 30% attendance rate compared to 2008 (in effect 70% or so less people walking the confusing, maze-like halls of the Venetian/Sands Expo where JCK houses its exhibition).

However, the exhibitors in attendance were focused, in jovial spirits, and in a good position to target the healthier jewelers that had made it to this year’s JCK, Apples of Gold, being among them.

After all, if you were able to tend, you were probably doing okay. There is a sense among many jewelers today that if you can ride this barrage of economic difficulties, you will be one of the stronger jewelers left standing.

Our first stop at JCK was with a current supplier that we had brought onboard only 3 months prior: gold and silver jewelry designer, David Tishbi. Their eclectic and unusual collection, handmade in Israel, had been a great hit for us and we wanted to meet them in person to discuss what we could do to improve our already successful endeavor with them.  David Tishbi mixes bold, fashionable designer pieces using nickel-free sterling silver and 14k solid gold and rose gold.

We also met several fashion-forward designers, including Liz Donahue of Starhaven, whose beautiful silver jewelry line will be added to our designer collection, we hope, in the upcoming months, after having made an exclusive agreement to select and feature some of their top selling jewelry pieces on our website (items that can easily co-exist and augment the Apples of Gold brand). I also couldn’t help but pick up one of their pieces for my wife, whose birthday falls a week after JCK ever year (lucky her!)

Along with several other gold jewelry pieces that we had to fill in from manufacturers who either went out of business over the course of the year, or categories that had been previously underdeveloped, we made many potential successful points of contact to fill these categories with new lines of gold pendants, gold bracelets, gold earrings, and many other of the classic gold jewelry lines that are must-have staples for any serious gold jeweler.

A more daunting task: we also have been attempting to source a quality, affordable, socially conscious diamond supply, with conflict-free diamonds from a reliable source. We made some promising strides in securing several suppliers and socially conscious diamonds are now available from Apples of Gold as loose diamonds by request. The greater challenge is securing new lines of socially conscious diamonds in many of our finished pieces also.

To this effect, we met with Unique Settings of New York to bring on hundreds of new diamond engagement rings and semi-mount. Look for a strong and contemporary line of high-end, handmade diamond engagement rings to come from Apples of Gold over the course of the next few months.

With many more opportunities to come this year, Apples of Gold has and will be expanding its jewelry line more this year than ever before. We are thankful that we have been able to do so in light of the current economic climate.

Look for upwards of 700 or more new pieces to come out of Apples of Gold Jewelry in the remaining part of 2009 alone! And with each piece, there will be a pledge of affordability and quality–as well as fine, designer pieces that you will not find at any internet jewelry retailer.

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.

Pricing Gold Chains Like Jewelers

Gold chains are by far the simplest types of gold jewelry to price. Learn how to price gold chains like professional jewelers!

The most important thing to look for is the gram weight of the gold chain in question. Once you have determined the gram weight, you are equipped for price comparisons.

Of course, keep in mind that price alone is not always the sole factor. Purchase jewelry only from reputable jewelry stores, and make sure they have a strong return policy, an established reputation, and excellent customer service.

Pricing Basics

Let’s use a 3mm gold rope chain for our pricing model. If a gold rope chain costs $450.00 and weighs 14.0 grams, you can do the math and realize that you are being charged $32.14 per gram of gold that is in that chain.

Quick Formula: Price of Gold Chain / by Gram Weight = Price per Gram.

You find another 3mm gold rope chain priced at $500.00. This chain appears to be $50 more expensive. Upon closer examination, the chain weighs 16.5 grams.  Using the above simple formula:

$500 divided by 16.5 = $30.30 per gram.

The second chain is actually the better deal when you consider the gold content ($30.30 per gram of gold vs. $32.14).

This is hypothetical of course and prices can vary significantly from store to store. We have found that most online jewelers charge an average of 30% more for the same gold chain as Apples of Gold Jewelry.

This is why we are not afraid to disclose what many other jewelers fear to share.

Watch out for jewelers who do not disclose gram weights

Jewelers to stay far, far away from are ones who do not disclose the gram weight of their chains or who use a wide range to list the gram weight–such as, “Chain weighs between 16 – 23 grams”.

There should not be more than a maximum of a 10% variance in the gram weight of a gold chain or substantial piece of gold jewelry. So if a gold chain is advertised at 10.0 grams, it should weigh somewhere in the 9 – 11 gram range (and that is being liberal).

Reputable jewelers will also honor the gram weights of their chains by adjusting the price of a gold chain if the chain turns out to contain a significantly less gram weight than advertised.

There’s Always an Exception to the Rule

There are always a few exceptions. It is often not customary to advertise gram weights of wedding bands, diamond rings, and gemstone rings (although if asked, jewelers should always disclose the weight if available).

The reason being that items such as wedding bands or diamond rings, for example, are not solely based on the precious metals content. Much larger factors come into play, such as design, the labor of love and time it takes to create such rings, and in the case of gemstones and diamonds: the quality and rarity of the stones weigh far greatly than the few grams of gold such rings often contain.

These types of fine jewelry are often sold by the piece, rather than by the gram (don’t be surprised if a jeweler takes it personally when the mistake is made of evaluating such items based on gram weight alone. Just hang your head in shame at this point and swiftly apologize).

Price Matching

Jewelers who want your business will do their best to price match or beat other advertised prices. Of course, keep cool and reasonable. Don’t expect a quality jeweler to match the price of a gold chain you found at a shoddy looking jewelry website whose prices haven’t been updated for 5 years and who don’t provide a customer service phone #. Identify and compare with jewelers’ real competitors to get a better price.

Gold Volatility

Lastly, keep in mind that gold prices can be volatile and the gold chain that you saw advertised at $300 today may soon hit $350 if gold prices continue to rise, as historical gold prices have indicated over the last several years.

Likewise, with a significant downturn in the price of gold, you should expect gold chain prices to decrease over time.

Keep in mind that other factors such as inflation, increased business expense, and the struggle for many businesses to survive in tough economic times, may play a role in determining whether to increase or decrease the price of gold jewelry.

The price of gold is a large determinant of the price of gold jewelry, but it is also often a guideline–not a stringent policy.