Wholesale & Import Sterling Silver Jewelry – Top 6 Factors That Determine Cost
By admin at 12 October, 2009, 5:47 pm
Demand Driven Costs
If you are considering a business in jewelry as an importer, wholesaler, or retailer, understanding the costs of that jewelry is critical. Having this knowledge allows you to better evaluate pieces you purchase & avoid being ripped off by those offering over-priced or fake jewelry. This news story pertains specifically to the costs associated with the creation, distribution, & marketing of sterling silver jewelry.
As a result of this supply & demand from competing industries, the last century has seen tremendous fluctuations in the price of silver. Prices saw an all-time high in 1980, when it reached $49.45 U.S. dollars per Troy ounce.
Every year, 650 million ounces of silver gets mined from countries like Canada, Australia, Mexico, Peru, & the United States, with more coming from scrap recycling & investor trading. In 2001, 24% of the silver was used in photography, while 33% was used in jewelry, 40% for industrial uses, & only 3% for coins & medals. Within these categories, silver is used in a myriad of ways; from circuits in electronics, as anti-bacterial treatments in medicine, & is even sprinkled on food as decoration.
While less high priced than gold & platinum, jewelry pieces made from silver still sell for a high premium on the market. The first cost associated with sterling silver jewelry is the cost of silver. The current cost per ounce is around $16.00 U.S. dollars, having risen sharply in the past few years. The base cost of the metal used is usually only a fraction of the costs that go into generating & delivery a piece of jewelry to the finish customer.
Precious Metal Costs
Silver is often not the only component used in Sterling Silver Jewelry. The addition of Crystals, Pearls, Jade or other stones will increase the final cost of the piece. Plenty of silver pieces also come coated with other more high priced metals, such as Platinum, Gold, or Rhodium, either to add tarnish resistance or improve shine.
Costs of Extra Material
Costs of Labor
Jewelry pieces are handled by a person at two point or another, often for the more delicate tasks of design. Everything from setting the stones & generating the finish are part of the significant processing costs associated with turning a piece of silver into jewelry. Such labor costs are heavily influenced by where the jewelry is made. Thus, in countries with higher labor costs, jewelry production is usually more high priced regardless of whether the pieces are of higher quality or better design.
Overhead costs
The creation of jewelry & its distribution is a business that incurs costs like any other business. These costs are offset by the profit made selling the product. The jewelry manufacturer sells at a price to cover the costs of business overhead, such as machinery, staff, sales, & marketing, as well as turn a profit. This technique occurs again down the supply chain when the importer, distributor, or retailer must sell the item at a price where these costs can be recouped also a profit made. The importer will have to factor in shipping & customs duty costs involved with getting the jewelry into the country, while a distributor may have to add costs for warehousing & storing the pieces. The final retailer will often have costs of walking a brick & mortar location & advertising to customers.
Marketing & Branding Costs
A final cost worth separating from standard overhead costs involves the branding & marketing of positive collections. A sterling silver piece from Tiffany’s will cost over two from Walmart. Such costs are the result of the time & money the brand holders have put into their brand.
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