Those of you who haven’t been with me since I began this blog in 2007 might not know that I initially went into the jewelry business with a partner. She was a diamond wholesaler for 26 years. Our joint business was something fun on the side for her. A side salad, as gorgeous food-blogger Tina would say.
My partner, who died in 2006, was a great saleswoman. When she was making a sale, she would say, “I’m going to give you a little education” and explain to people why a particular stone or piece of finished jewelry cost what it did. I enjoyed her lectures. They really were helpful. Now I’m going to give you an education.
Click to sing along with Van Halen’s classic “Hot for Teacher”: “I don’t FEEL tardy!”
I’ve done this before. Feel free to read or re-read the post about the costs of producing fine jewelry I wrote earlier this year. I also did a post on the rising price of gold, comparing the cost of the same gold chain purchased at different times. But that information about fine jewelry leaves people with several burning questions.* The first burning question is:
“Why don’t you make cheap stuff?”
First of all, bitches, we are elegant people on this blog, so we don’t say “cheap.” We say “inexpensive” or our super-secret code: “Jimmy Choo for H&M.” And, as I’ve said, I would love to do inexpensive jewelry for the likes of H&M. But it costs money to manufacture cheap inexpensive products because even if you use inexpensive materials, you still have to pay for labor. In other words, the retail price isn’t based on the cost of materials alone. Think about it! Canvas and paint cost very little compared to gold and diamonds, but we don’t price a Picasso by doubling the cost of the canvas and paint. I don’t normally compare myself to Picasso — just because I don’t have as many girlfriends as he did — but like his paintings, my jewelry is worth more than a simple multiple of the cost of materials I use.
Picasso’s painting of his lover Dora Maar.
U.S. labor is expensive. Labor, for me, includes the wax carvers, mold makers, metal casters, goldsmiths and stone setters whom I employ, all of whom expect to get paid.** If I waste expensive labor on inexpensive material, I wind up with a customer who wrinkles her nose and bitches: “You’re charging THIS? For SILVER/PLATED BRASS/PLASTIC/RHINESTONES?!” (Have you said that? Be honest. I bet you have: “This handbag is CANVAS?”) I don’t like that experience, which leads to burning question #2:
Why is U.S. labor expensive?
U.S. labor is expensive because the U.S. has a high standard of living. People in ANY job — including you, unless you’ve taken a vow of poverty — want wages that allow them to maintain that high standard of living. Luckily for you bargain hunters, other countries don’t have such a high standard of living. People will work for very little. To be blunt and use the bad word: Cheap goods are made by cheap non-U.S. labor.***
Vietnam apparel factory. Click for photo source.
Here’s a good example of the difference in labor costs. I designed and manufactured a silver ring in the U.S. for $40.**** The price of silver is the same everywhere. As I’m writing this post, it’s about $17 an ounce. I sampled that silver ring at a factory in Asia and it cost $4, which leads to burning question #3:
So why don’t you just make all your jewelry in Asia?
Lower quality calls for higher quantity. A factory would go out of business fast if it let me order one or even 10 inexpensive rings for $4 each, so the minimum order is 100 of one style. If I want to do ten inexpensive ring styles, I’ve suddenly got 1,000 pieces in my inventory and I’ve spent $4,000. What am I going to do with all those rings? I need a big store to sell them. I can’t spend $4,000 on spec and hope for the best! What if I try to get H&M or Target interested, but they don’t want these particular styles? What if they want white skull rings and I’m stuck with 100 black skull rings? Trust me, the minute one of those retailers gives me a big order, I’ll spend the $4,000 and more to meet the demand and all of you will be able to run to the store and buy a lesser version of my signature look for under $50. Until that order comes in, I will be making most of my pieces one or two at a time, here in New York, using high-quality U.S. labor on raw material that is worth the investment.*****
It’s not worth the labor to do this piece in silver right now. Click for more info on the design.
Speaking of quality, another cost of manufacturing overseas is travel. As I just pointed out, my U.S. manufacturers are top quality. Also, it’s easy for me to drop by their places and see how my jewelry is shaping up. If I there’s anything I don’t like, I don’t take the piece and tell them to keep working on it. To do quality control overseas, I’d need to be on site, even if the overseas factory is excellent. If I stay in the U.S. and the overseas factory sends the product after eight weeks of work and transportation and THEN I find out it wasn’t done the way I wanted it to be done, sending it back is a big deal. I might not get the product back for another eight weeks. The following is a rhetorical question, not a burning question: Do I want to spend the money to travel to Asia and live there for months in order to supervise the production of thousands of pieces of jewelry for which I have no retail outlet? NO THANKS!
The situation I’m in is a classic small-business conundrum. I could sell more if I charged less, but I can’t charge less till I sell more. This applies to most small businesses, whether the product is software or apparel. There are some exceptions, such as jewelers who sit on their floor or at their kitchen tables, stringing their own beads, twisting their own wires, setting their own stones. That cuts down on the labor that needs to be hired, but sometimes the designer undercharges for her own labor. If she’s not doing anything else to earn money during those hours spent doing the work herself, she ought to be compensated properly. In addition to the cost of materials, she has to pay for rent, packaging and any marketing of the product she has to do. Also, if her pieces do well and she has to ramp up production to meet demand, how is she going to do it with her bare hands? That way of manufacturing is putting off the inevitable if growth is what you want. I have manufacturing connections and am ready to expand. I think it’s a lot harder to deliver a large order in a few months time if you’ve been sitting at your kitchen table and have no manufacturing contacts. People go out of business in that scenario.
There’s more to be said on this topic but I’ll stop here for now. The asterisks sprinkled throughout this post are explained below.
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FOOTNOTES
*I can help you with burning QUESTIONS but if you have a burning SENSATION, go to the free clinic.
**Everyone has to get paid. No one can — or should — work for free. Please note that I would never suggest that any of you work for free. “Free” includes working for experience, portfolio-building or product. In my experience, whether I was doing the work or having someone do the work for me, the situation turns out poorly. Cash or, for interns, college credit are the only payment options I will ever recommend.
***Consumer demand for inexpensive apparel has pushed clothing production out of the U.S. There are exceptions to the rule, such as American Apparel, but the U.S.-made clothing product is so rare now that the company made that its whole selling point. Nearly all clothing production is overseas; New York’s Garment Center has shrunk drastically.
****That’s what it cost ME. Obviously, my wholesale price would be higher and a retailer’s price would be significantly higher than that.
*****One exception is the swear rings. Because they use a lot of metal and come in sets of four, the factory reduced its minimum and made 50 sets instead of 100. You can tell from the price. These rings are solid sterling silver. If I made them in the U.S., they’d have to retail for about $1,000. I know this because I made the samples here for the overseas factory to copy. My only other pieces made overseas are the $125 silver squirrel necklace and $50 silver Teeny Genie and Little Woolf necklaces. I made the first dozen here (those U.S.-made pieces are recently sold out in all three styles), then I made 100 of each overseas. I figured they were small enough, inexpensive enough and popular enough that I could take the chance. I was selling the original U.S.-made ones at a loss.
UPDATED AUGUST 2010 TO ADD: I’m trying to add new swear rings to my line: OMG, LOLZ and NYC. I need to make them overseas for the reasons cited above. Through September 12, 2010, I’m raising money on Kickstarter by accepting pre-orders on the rings. I originally planned to do just OMG and LOLZ, and I raised $7,000, covering the factory minimum run. Due to popular demand, I added the NYC style, but now I need an additional $3,000 for a total of $10,000. I spoke to the factory owners and they were inflexible when it came to the minimum. So please go to Kickstarter, pre-order and make these designs possible! They won’t be delivered till close to the December holidays, most likely, so consider getting them as a holiday gift.
UPDATED AGAIN TO ADD: The Kickstarter campaign above was successful! Thank you. To learn more about the real costs of doing business, read my other “Get Smart” posts, with topics including quality, quantity, custom work and metal prices. Everything except the metal applies to a wide range of small businesses, not just jewelry! To read more about the agony and ecstasy of having a small business, read my Huffington Post article, which grew out of my “Get Smart” series.
Excellent post WB. Reminds me very much of an HBO documentary I watched about the garment district in NYC with respect to rising labor costs.
“First of all, bitches, we are elegant people on this blog, so we don’t say “cheap.”” —-ahahaha! That made me quite literally laugh out loud. Giggles aside, I find the plight of manufacturing gold fascinating, given, as you said, the rising price of gold, and labor costs. We, as consumers, only see the glitz and the glam and rarely consider all the blood, sweat, and tears that go into these pieces. We only see these beautiful finished products and wrack our brains as to how we can get them in our hot little hands as quickly as possible. Like flesh-eating zombies, in a sense.
even my security word here is so elegant. in bold letters : PRADABAG. hahahaha.
i like the term inexpensive. I have expensive taste with a poor budget. How about that?
You’re hilarious and super smart! Best smile EVAH!
I am Denise Katipunera
Hot teacher gave a fabulous lecture! Sadly I know all of this only too well from both the side of a wholesaler and a retailer. When it comes to quality, I will save and save until I can have it — I made a conscious decision some years ago to consume quality, and consume less. (I’m human, I still buy a cheapie here and there!) Your jewelry is worth every penny — I adore my rings and have worn them every day since I got them. And the gifts I gave were both very much appreciated for not only being beautiful but because they are so very special! I’ve already sent out a little magical call to Target & H&M for you so many others can enjoy the fabulousness that is Wendy B! (Hey what about Wendy Brandes for Top Shop? Oh I’m such a TS ho! BTW anti-spam word: whynot? ah so there’s our answer…)
XXX
Suzanne
Excellent post Wendy B! I think it’s so great that you can monitor the production of your pieces, especially as a small business owner, I think quality control is so important. With the where it’s made and the cost debate, you can’t make everyone happy. I’m more annoyed with the people that complain about when something is made in china, but dont want to fork out the money for something made in the us or europe.
I feel very enlightened. 🙂 Thanks for the lecture!
Hi Wendy! Great that you have so eloquently expressed what many of us small business owners/independent retailers have known for a long time. Sometimes I think it would be rather fun to be just a blogger, without the responsibility of running a company that tries to offer unique and unusual goods to the general public.
The offering of goods available worldwide is adversely affected by the economic demands created by the influence of the largest players in the market. Customers do benefit from lower prices, but at what cost? Lower quality and less choice. At the luxury end, branded goods are simply more expensive high street style products.
Your pieces are original and beautifully made with individual, loving care and attention to detail. I think that, in future, more emphasis will be placed on creative/artistic value and genuine quality – it’s just getting from here to there is in a process of transition. Let’s hope we can get through this difficult time without too many artisan manufacturers and niche retailers going out of business. Perhaps we should form a club to help each other?
Susan x
Ah great informative post <3
Great post, Wendy. I’m a firm believer that you get what you pay for. Now, I’m no saint — I *have* made fast fashion purchases and will likely do so from time to time, but I *never* have any expectations for quality. For quality, I expect to (and do) pay a good bit more. I also have the quality item for a lifetime.
Carole
sasy.com
Very interesting post. I appreciate the education!
Wendy, this was a really excellent and informative post. Thank you so much.
Your jewelry is really art and I think it’s great that you’re doing such exquisite work. I wish I could get something too!
My brother lives in Thailand, and the labour is indeed cheaper. However, when he went to buy an anniversary gift, he went to buy a higher quality piece and found that the best work is just as expensive as in New York. (So I suggested buying WendyB as an alternative!) So you can get cheaper in Asia, but if you want something of WendyB quality, you will pay as much for it.
Lol, my word was Tokyo.
Wow, this is so informative and such great insight Wendy! Call me crazy, but I think the fact that you don’t have hundreds of each piece lying around (particularly the more expensive ones) makes them more exciting and valuable!
I’m not big enough to own one of those pieces…yet…but I will. 🙂
For now, I HEART my teeny genie necklace! By the way, my mom hasn’t taken her lotus necklace off since “my dad” surprised her with the lil Wendy Brandes gift bag hanging from the Christmas tree. 🙂 I’ll get a pic for you of my mom…she’s gorgeous! Also, all her friends love it to and she’s been bragging about how her daughter knows the designer.
Agree with what jordana said. My budget doesn’t allow for one of your pricier pieces, but I can certainly appreciate the labor-intensive process that went into making them. P.S. I kept my genie necklace and wear her when I can!
Great post!
Let’s hope H&M is reading, getting ready to place their order…
Thank you for laying out the economics of scale and issues such as materials and labour costs and currency fluctuation for people who don;t think of this when they flip a price tag. I encourage all buyers of jewelry to research the cost of raw materials, and make their own deliberations. Some “jewelers” do their own bench work and others could not if you paid them. The more hands touch a piece, the more the price rises. And some designer merchandise is vastly overpriced- David Yurman comes to mind.
this is a wonderful post. i agree with you completely…particularly because i’m in the luxury lingerie business.
lovely!
xox alison
http://www.froufroufashionista.blogspot.com
it is far better to have one or two quality pieces that you really love than a lot of ‘inexpensive’ bits, that’s my philosophy anyway
Thank you so much for putting this out there. I manufacture in the US as well and sometimes I find it hard to articulate to people why things cost what they do. At least a few times a week somebody tells me I should just manufacture in China, because they don’t know all of the complications, costs, and downsides to doing so.
I’m not sure if this applies to jewelry, but another thing that adds to cost is the fact that small manufacturers are not purchasing raw goods in huge quantities. If I could afford to buy 500 yards per color of my fabric I would get a significant price break and pass those savings along to my customers, but when I’m only selling enough to justify buying 50 yards I pay more and therefor so do they.
Fascinating post Wendy – a really great look at the cost of manufacturing (something that I am now doing myself with my new colour system).
Excellent post my dear. Most consumers have no clue how products are made or why the country of origin matters. Well said!
Hoping 2010 brings you much success! Happy New Year!
Great post Wendy! I appreciate you taking the time to educate folks about the true cost of manufacturing. Although I feel that the big box “inexpensive” fast fashion stores have done a lot for the apparel industry, I can’t help but wonder how much negativity has also come from them offering such deep discounts. I also manufacture in the US and it’s always hard for me to explain why an organic tank top will cost you $25 whereas they can get one (although mine’s better) from H&M for $12. On another note, why DO I have to explain it? Why are so many people so damn concerned about how much I make? I know a lot of designers but I don’t know any who are actually making money. None of them are in the black, they only make enough to stay afloat. So you know what people? Get your hands out of my wallet. Spend a minute to educate yourself about the importance of buying local/handmade/sweatshop free, and realize that if it only costs $5 then it’s probably only worth $1. Bravo Wendy B!
Well said. As a fellow jeweller (about to graduate from my diploma in engineering in jewellery design) it’s horrifying how hard it is to explain to people why things are so ‘expensive’.
I’m relying on the fact that there are people out there that appreciate a beautiful hand made piece of jewellery. I’m slowly turning everyone I know against chain jewellery stores and their disgusting gems and silver plated crap.
You commented recently on my site about people not spending money on jewellery to the tune of $200 but not even thinking about spending the same on a dress that they’ll get much less wear out of. I comepltely agree! And the fact that it has to go EVERYTHING they own. ARGH! Drives me mental.
I have a friend who, since spending the year with me and my housemate who is also a jeweller, has completely written off mass produced jewellery. Small steps!
And making the decision to monitor you own creations is obvious. You are literally putting your name on these products. They have to be exceptional. Which they are! Great post… I’m passing it on to all my jeweller friends!
I am educated. 🙂 great thoughtful post, I truly didn’t know much about it.
What an extremely informative post. Thanks for the lesson, Wendy!
P.S I wuv Gigi! I have a Peke too. 🙂
wow; thanks for that- i feel so knowledgable now.
love the rings in the header too! and balthazar (below) is insanely amazing.
xx
and gorgeouss blogg; will definitely be back visiting soon!
You get what you pay for is gospel. I had no idea just how difficult it was for small business craftsmen to produce their wares. I feel privileged to own my little genie and I’ll just have to save up for my next purchase, knowing it will be worth every penny!
I’m really glad you posted this. This really dispelled a lot of misunderstandings I had about manufacturing in general. More than ever I am saving my pennies to pick up a special WB piece!
great post! and an interesting read for a textile student like me too. it seems like a positive and natural thing that some things are at higher prices than others, if not we’d just all be buying the same things of the same quality and design? i’d love to buy a wendy b piece but i’d rather save up and truly value it forever!
Thank you so much for posting this. You and spoke about this briefly over email a couple of weeks ago and I’m glad to see that you blogged about the issue here. Running a small business is difficult and I feel like I spend half the time defending my prices.
As for your use of the word “inexpensive” – amen, sister! I detest when people use the word “cheap”…bleh.
Thank you, Wendy. These same principles apply to vintage clothing. Most consumers don’t realize that a piece of clothing made prior to the 1980s is of far superior quality to anything (including supposedly high-end designer goods) made today. Seams and hems were finished, facings were understitched to stay in place, linings were constructed of quality fabrics and fit just as well as the outer garment. Buttonholes were bound, trims were of high quality, and zippers were often set in by hand. You cannot find this type of quality in most garments made overseas today. That’s why vintage clothing is just as great an investment as fine jewelry.
Wonderful job Wendy!!
A fabulous, amazing, in-depth, wonderful look into exactly what you called it: the small business conundrum.
Thank you for clarifying.
Great piece! Very informative indeed….I dream of a world where manufacturing takes place in North again. Most of the vintage clothing I wear/sell was made in Canada or the US. The quality is obviously noticeably better… the tide may slowly shift back.
Fascinating post. I’d rather pay more for quality than less for crap.
I meant North America! Doh!
I’m late for the lesson, but so glad i made it… The only way I can keep the cost of our product reasonable is to scout for dead stock fabrics, for example. I love working in small editions, lack of something is a good drive for creative process and investing in simple, quality off season fabrics gives me freedom to screw up, even.
such an enlightening post.
You make some great points here. I don’t think most people think about how goods get to them and the hidden costs of cheap labor. Everyone wants their goods at rock bottom prices but then when lead is found in children’s jewelry from China or melamine is found in discount pet food then we are all astounded. There’s no free lunch, cheap costs, one way or another.
I was thinking about that today while thrifting at a yard sale, all those cheap lightweight pins and bracelets in forgettable metals and plastics, all passed over, forgotten, disposable. What sells, what retains at least some value on resale are real stones in real metals. An investment of sorts.
We all go for the cheap sometimes, junk food, Target t-shirts but if we focus on more quality and less quantity, our spirits, our wallets and the planet will all be better off in the long run.
Amazing post! I celebrate and applaud all of your decisions. I could not ever manufacture a bunch of crap knowing the workers were not paid properly. The ability to inspect the works as you go along is priceless. Love love love your stuff! I think someone who could retail the goods should collab with you to work out some of these inherent production issues. It would be a hit in the fash/bloggersphere and get a lot of outside interest also!
xx
http://unboring.typepad.com
Very informative post that needs to be said. Too many consumers just want “cheap” and ignore both the realities of manufacturing and the benefits of quality. My former-partner, a painter, had to give similar explanations frequently to people to educate them on why her paintings cost “so much.”
Thanks for the little education. It’s fascinating to read about your production process. Now if only you’d tell us about the artistic process…As for not working for free, surprisingly few people believe in it, and everyone else is making it worse for us all. I’ll work for free the day my rent is free and an apple at whole foods doesn’t cost $5 — and some idiot tells me that’s “acceptable”. Love your designs.
As much as I love a bargain, I am turned off by mass production not just because of the absence of originality, but what the individual on the shop floor must have been paid to make it.
I mean all those cheap sequined dresses and tops (and leggings, ick) in Top Shop were not made by someone getting a good living wage and health care benefits.
Having said that, if you ever do get a range into H&M, I would sooo buy it. (I get that the factories you use are not employing children or
But I would rather wait until I am rich enough to buy a Wendyb supervised original. It would just feel nicer.
xx
excellent, excellent post & keep up the good work!
Excellent post! You’ve laid out my dilemma exactly.
1) I love that my anti-spam word was jezebel!
2) My gorgeous friend and studio sharer Rebecca Little has begun teaching on the side. So she was in our studio today, teaching two girls how to make silver rings. She said afterwards that the girls hadn’t realised how much thought, time and talent went into even the simplist pieces of jewellery. And that they left having a better appreciation of our craft. Which made me happy that they had enjoyed their day, but also a little sad that sometimes people aren’t aware of the amount of research and development that goes into every piece. Some pieces of mine can take months, until I’m totally happy.
3) And thank you so much for explaining thoroughly what goes into one piece! And the cost that is allocated to that.
4) I’ve got to add your post to my blog.
Thank you! x