A couple of weeks ago, I emailed a manufacturer about producing a pendant that I last made in 2009. I never got a reply, so when I went to visit him about an engagement ring I was working on, I asked, “What’s up with that pendant?” He turned green. He really did! Not solid, Kermit-the-frog, it’s-not-easy-being green, but still quite moldy around the edges. I braced myself for bad news. “I looked at the piece on your website,” he said. “And I’m going to have to charge you almost what you have been selling it for.”
Well! I knew the skyrocketing price of gold was going to catch up with me one of these days. Back in 2007, I was stressed out about gold hitting $700 an ounce. Since then gold has more than doubled, trading as high as $1,577 an ounce. (As I’m writing this, it’s about $1,540.) Silver, the more economical choice, has doubled in the past 12 months alone.
I figured it was time to check some chain prices, particularly a heavy 18K gold chain that I’ve been tracking for years. Here I am taking a bite out of it in 2010.
This is an expensive snack!
I bought 16 inches of that chain, wholesale, for $255 in 2006 and $444 in 2008. Last year, it went up to $530, excluding the clasp. Now it costs about $640, wholesale, excluding the clasp. Here’s a scan of the quote I got on a day when gold was at $1,550.
Directly below the price of the chain is the wholesale price for the clasp: $73.92. The two prices below that are for jump rings. Those are little metal links: one is used to attach the clasp to the chain; the other is the one that the clasp goes through when you put the necklace on. Fully assembled, with clasp and jump links, the chain will cost me $724.63. By the time it hits the display case of a store, it’s worth $3,260.84 — and that’s with pretty low markups for the wholesaler (me) and the retailer (the store).
That’s a big chain, so I also priced a one-millimeter chain that I use more frequently. In 2007, a 16″ version cost less than $60 wholesale, including the clasp and jump links. Fortunately I stocked up on that chain back then, because now the same one costs about $105. That means that skimpy, mass-produced chain with no pendant is worth about $470 at retail.
Not a lot of designers would give you so much information about their costs, but I want you to appreciate what a steal most of my jewelry is right now. While I’ve been basing the prices of my latest designs, such as my new Cleves earrings, on the current price of gold, I’ve only raised prices on old inventory by 10% or 15%. Like businesses ranging from supermarkets to jeans-makers, I’ve been squeezed between rising raw material prices and customers battered by a bad economy. It’s hard to mark things up when people aren’t spending like they used to. I figured as long as I made enough money on the old pieces to replace the inventory as it sold, with a little bit of profit left over, I would hold steady. Now there’s no profit to be had at all — which, my Bitchtastic Guide to Business™ book will point out, is a highly undesirable situation — so I will be repricing many of my gold and silver designs. Because I didn’t raise prices incrementally, it’s going to be a huge jump: many prices will at least double overnight. I’m currently working on prices for the catalogs I produce for store buyers. When I finish that project, I will change the prices on my website to match. That means that for a few more days or weeks, old inventory is being sold for shockingly low prices. For instance, my Mud Flap Jill necklace in 18K rose gold and rubies is being sold for the 2009 price of $500.
Mud Flap Jill in 18K rose gold is available for $500. Click to shop.
Meanwhile, the Mud Flap Jill in 18K yellow gold is selling for $1,500.
Go ahead and splurge! Click to shop.
There is no difference in price between 18K yellow gold and 18K rose gold. The only difference is that my original inventory of yellow-gold Jills sold out. The new yellow-gold Jills reflect 2011 costs. I have one rose-gold Jill left from 2009 and it’s still at the 2009 price. The minute it sells and I have to make new rose-gold Jills, the price of the rose-gold Jill will go up to $1,500. So if you want one for $500, I suggest you buy it THIS SECOND. And if you want to look around for another bargain, here’s my website:
CLICK HERE TO SHOP FOR WENDY BRANDES JEWELRY
It’s not often that you can make an investment that’s guaranteed to at least double in value within weeks, unless you’re lucky enough to get in on an underpriced initial public offering of stock. This is your chance to be a savvy investor! Buy now before it’s too late.
And come back tomorrow for the answers to your burning questions including:
- Why don’t you buy cheaper gold?
- Your price is just double the price of your materials, right?
- Why don’t you work in brass?
- Why don’t you make everything in Asia?
I’ve answered the second, third and fourth questions before in posts such as Get Smart (About Manufacturing) and OMG! Get Smart (About Quantity). But I don’t mind answering them again. I grew up with television commercials for discount retailer Syms, which declared, “An educated consumer is our best customer,” and I totally agree with that philosophy. The first question is straight out of Dumbassville, but I’ll answer that one too.
OMG… why don’t you buy CHEAPER gold??? Like what? Gold plated? Gold is gold people!
And who can resist buying something from you? You vixen you! That photo (not to mention this very educational post) should rake in the sales 🙂
The cheaper gold question is for real!
If there were cheaper gold available, we’d all be stampeding to buy it.
Ahh, but if we could become gold speculators, we could make cheaper gold very quickly. Not sure if jail would be involved, though, so there is that.
Ack, I’m going to have to put in my order for the Vampire Diana ring ASAP, it seems… oh well! 😉
The sooner you get it, the sooner you can enjoy it! I’m scared to look at the cost of that one…
Look out for an email from me! I suppose it’ll have to be a “yay I got into grad school!” present to myself! 🙂
Ah this is so informative, especially for all that gold stuff I was bugging you about a few weeks back. My wonder is, does gold revert back to old values or is it only up from here?
I won’t be surprised to see it get to $2,000 an ounce this year.
I am gonna blame Glenn Beck on the rising gold costs. Kidding.
But what a pity I didn’t get my bargain beautiful Wendy Brandes jewelry last year. I look forward to your educating answers to these burning questions including the one straight out of Dumbassville, which I visited a few times by the way, by way of too much Jameson’s intake.
Oh, I know Dumbassville well.
Ddddaaaaaaammmmmmmnnnnn. I’m glad I got married when I did. I know someone who has been talking about buying gold and saving it for a rainy day and that was back in 1998.I guess they were smarter than I thought. But kidos to you for informing us.
Hi my dear-an amazing post, gold is certainly a brilliant investment and an even better investment is a piece of Wendy Brandes jewellery-so pleased I have my Diana ring xxx
Best think about that purchase then. You look so cute in that pic!
wow! its crazy how fast the prices rose and no I won’t ask why you won’t buy cheaper gold :p
Fortunately, I can wear silver :-).
The price of gold .. blame China with its 18.5 million ounces in ’10. Hoarders who worry about something I don’t know hold gold and guns in their freezers, taking up the space a nice bottle of Stoli could take.
It’s so hard to know what’s real about gold and what’s in the hands of eager traders.
Quirky oddness now.
LOL, I’m with you with the hoarders and Stoli.
Still annoyed by people who ONLY think of buying gold on the day it hits a new high. What kind of investment strategy is that? Study the metal for God’s sake, and at least buy on a dip.
Hmmm, since I live in California, maybe I ought to take up panning for gold….
I guess since silver is going up too, it’s also about time I quit procrastinating about getting that Juana skull necklace!
That’s one of the ones that’s going to have a major increase, so if you really like it, do it now!
This was interesting to read. I knew that prices for metals had gone up, but I wasn’t aware of how significant the price increase was.
Really informative post. Cannot believe that someone asked why you don’t buy cheaper gold. Urgh. Interesting to see how much gold prices have gone up, didn’t think the increase was so steep!
It’s so important to educate consumers about why things cost what they do, especially for an independent designer. And why it does make a difference to support smaller, local designers.
Ugh, I watch gold prices too—with you in mind! I think about what you must be going through all the time as I watch those prices go up and up and up. Stressful.
But your beautiful designs have always been great value for money. And even when you raise the prices they will be.
“A bargain at twice the price!”