Online Jewelry Pricing vs. Traditional Jewelry Pricing

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Can the Price of Gold Throw a Blinding Light on Jewelry?

All of the gold that's ever been mined, all that exists today above ground, can be contained in a cube about 20 yards on a side – 8000 cubic yards. It would weigh out at roughly 140,000 tons. That's it. That's all of it. According to people whose job it is to know such things, the world consumes about 120 million ounces of gold each year. Most of this is for jewelry. However, the world mines only about 80 million ounces of gold each year. There is quite a deficit: 40 million ounces - a whopping 50% of its production!

It's a sure thing that the retail price of jewelry will change as the wholesale price changes. If the historical track record is any indicator – and it is – that change will be up. However, there are ways to limit and lessen the bite that a jewelry purchase will take out of your pocket book. Most of this just takes some thought and some plain old common sense.

As you would think, the most expensive way to purchase gold jewelry is from a traditional retail establishment. He has to think about his rent, his insurance, his help, his furnishings, his utilities and so forth. When you buy from this fellow, you are paying a certain percentage of his entire overhead. A retailer typically uses what's known as "keystone pricing". Keystone pricing means twice the wholesale price. Some firms, depending on their operating costs, what they figure the market will bear, or what they can get away with, will use double or triple keystone. That's the price of doing business in the traditional retail world. Even some online jewelry retailers will employ keystone or triple keystone pricing, simply because it is the old tradition of doing business in the jewelry world. A lot of people are willing to pay for the trappings. But you don't have to.

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