Wholesale Gold Jewelry Trading Guide for Entrepreneurs

For those of you who are thinking about sellingof your competitors, you may get an idea of
gold jewelry, it is crucial that you understand fullyhow severe the competition is. For instance, if the
how to determine the price for gold jewelry. Notcompetitors are marking up the jewelry three
only this can help you to tell a good deal from atimes of the cost, the competitiveness of that
bad one, it also helps to analyze your competitorsstyle is not really that high. On the other, if
and understand the market better before youeveryone has the same pricing and the markup is
make any investment.50% above the cost, the style might have
Gold pricealready saturated the market.
The most important part of wholesale goldVolume trading
jewelry trading is to understand the breakdownAnother angle of looking at the pricing issue is
of the cost of a piece of gold jewelry. Let's saythat when the competitors are marking up at a
the current good price is $500 per ounce. Tolow margin, the item is probably accepted by a lot
calculate the cost of gold for a piece of 14 karatof consumers. The justification behind it is that
gold jewelry that weighs 3 gram without anywhen the profit per piece is low, and people are
stones, we first divide the price per ounce bytrading them actively, there probably is a high
31.5, to get the price per gram, which is $15.87.demand for it. On short, the higher the profit
This is the price of pure gold. To convert this tomargin, the low the volume of sales and the low
14K gold, knowing that there are 24 karats inthe profit margin, the higher could be the volume
pure gold, we divide $15.87 by 24 and multiply theof sales. Another point that is worth noting is that
result by 14. The price per gram for 14k gold isthe volume theory also applies to jewelry
roughly $9.26. Therefore, the total cost of thevendors. If you buy in large quantity, pricing should
gold for a 3 gram ring would be $27.78.go down automatically. Therefore, running a
Labor Costsuccessfully business involves getting the balance
Another major part of the cost for a piece ofbetween all the factors within the resources and
gold jewelry is the cost for labor, especially forinfrastructure you have such as employees and
pieces set with precious stones. Gold jewelrycapital.
generally requires some filing and polishing after itCloseout Jewelry
is cast out of the mold. The labor cost canSince jewelry business is highly time-sensitive,
sometime be as high as $2 per gram, dependingstyles that were once popular several months
on the origin of the jewelry and the style. Inago may not sell at all couple months later.
addition, the cost of setting any stones on a goldTherefore, when buying gold jewelry wholesale,
jewelry can be over one dollar per stone. Certainyou should estimate the monthly sales and stock
advanced setting such as channel set and invisibleaccording to the sale volume. For example, you
set cost even more because of the high level ofmay want to stock a certain style for two
craftsmanship required.months worth of stock and restock it when it
Markup of Competitorsruns out in order to minimize the closeout items in
A good way to analyze if a certain style of goldthe inventory, which is sometimes referred to as
jewelry is profitable and beneficial for a business isinventory shrinkage.
to understand your competitors' prices. Since youBy understanding the market and your
already know how to calculate roughly the costcompetitors, you can reduce the mistakes during
of a piece of jewelry, and therefore the priceyour entrepreneurial endeavor, thus increase the
that you can get it, buy looking at the markupschance of succeeding tremendously.