Have you ever wondered why jewelry prices went up this last decade? While fine jewelry is still at affordable prices, brand new jewelry are costing less to be made but still are surcharged for their quality. Don’t get me started with designer pieces… Marketing pretends its high rarity of gemstone providers, exclusive design and their long heritage branding with an obvious choice of caring for the environment.
Understanding how each player prices their jewelry is more often a mystery. But today, I am gonna reveal some of the darkest truth that you may not know.
Selling a piece of jewelry is not that easy. Too many websites, too many cash-for-gold touristic places, way too much antique shops to choose from. Here is the pricing guide.
💸 Let’s start with the lowest. Get cash from gold.
Try it out for yourself and you’ll see that getting a lot of cash for jewelry is not that much beneficial most of the time.
- What do they calculate exactly? well, easy. They start by weighing your jewelry and pay you by the ounce, at the market’s price (50% of the real price). Then, they take up to 10% of margin. Finally, you’ll get 40% of its real value.
- What they forget calculating? The design part of your jewelry. Complex or simple, it comes down to 0.
- What happens to your ring when they purchase it? They sell it back to a higher price to a nearby antique shop or simply display it on their front window, waiting for a lucky customer to get your hands on it.
- Good deal? As they would never really expertise your ring, you could be lucky walking up to the store and getting a Cartier ring for a quarter of the price. You’ll just need to be a super lucky guy 😉
Did you ever wonder why the prices of jewelry in flea markets were that low? A simple reason. “Produce more to sell cheap”.
🌶️ Their secret sauce? They produce in lower-income countries where the skill set is higher, craft labor is cheaper and where the civil rights are ignored.
Dark truth? Spoiler alert. If you start your investigation, you are gonna be realizing that all flea market have the same supplier. All flea markets around the world are supplied by 3 to 5 producers in every continent. In average, they can produce 500,000 of the same ring every day, exported across all continents (over than 350 thousands euros worth of jewelry).
Quality? Generally, pretty bad. Remember, it’s a mass manufactured collection of jewelry made by the kgs to be exported in all flea market.
👪 Family time! Let’s buy jewelry from a local jeweler
When you buy jewelry from a nearby jeweler you know, you may get lucky a cool ring with plenty of gold and a good quality stone for half the price.
What do they calculate exactly? Good quality = decent craft + “very good” diamond or gemstone + his share of the win (gross margin)
Why? Trust. This jeweler I am talking about is all about a good salesman and your relationship with him. Your family knows him, you get the best diamond in the market. It’s your first time in their store, they could rip you off pretty bad!
Why not more? A family jeweler is known for its jeweler skills. He is generally a really bad designer. He either copied the design from a famous brand you like or take design right from his Instagram feed.
Made in? Local so the manufacturing is impeccable. Generally, no sub-supplier is involved, just one jeweler working on your jewelry from the design to cast to finishing and setting.
Problem? Local. Your jeweler you trust is generally pretty local so no export is possible.
Online jewelers of fine jewelry
They understood it all. You buy a ring from an online jeweler means that you are buying the whole online experience that comes with it.
How do they calculate their margin? The design skills they have, the delivery service, the e-commerce they put in place for you, the supplier that goes fetch the stone you requested, the slow made-to-measure production cycle,… and the customer service!
How is it so cheap? 2 reasons:
- Their virtual stock. They don’t produce tons of models. They spend money on 3d designs that they let customers customize and order.
- And, they employ fewer people. Each person is their own boss without being too complicated as a hierarchy of decisions. Think of how a start-up works, people are multi-tasking. One design consultant handles each order, from supplying the best stone to designing the ring to sending it to manufacture to delivering it in-hand/shipping it to you. No need for bypassing the system.
A fact you should remember. Buying from a well-established brand is always way more expensive. Expensive doesn’t necessarily mean the best quality.
How do they calculate their win? “To buy a Cartier ring, you first need to want to relate to Cartier.” Buying from a brand is basically believing its core values, its 200 years of heritage that comes with it, its design restriction and obviously its high skilled craft. 200% is the percentage of brands add to sell a ring. So think twice before walking to a brand.
Are you the show-off type or not? Having a branded ring is like having a white t-shirt from Primark at 5euros but with a big stamp on it.
Made in? Questionable. Some brands pretend to be made in France, but to be labeled made in France, you’ll just need to set the diamond in-house. The rest could be realized in…anywhere really.
Good quality? To be honest, I’ve seen better. You’ll really see the difference with complex rings but with a simple engagement ring, you’ll barely see the notice. Basically, a
As a comparison? Take Zara and Uniqlo. Both brands. Zara’s white t-shirt is the exact same one than Primark’s. Same composition, same design. The only difference is the price. Why? The brand they put on top of it. Uniqlo spends more money on research and development than Zara, that copies all runaway dresses and mass manufacture.
On sale! Outlet markets or other alternatives
Outlet markets are quite interesting. Wonder around “La Vallée Village” one day and you’ll notice discounted luxury items at half the price of retail.
You’ll wonder why is it that cheap? Discounted prices are generally the ‘left-overs”: past collections, dysfunctioned products, and most commonly lower quality products. To get to selling these products, they lower their margin, losing money on the short run but emptying their stock in the longer run.
Win-win situation? Sell faster at competitive prices means more loyal clients. A simple explanation is that brands use the stock they never sell in stores to attract a broader clientele and not ruin their image to their most luxurious clients
A quite alarming truth is that notaries are known to acquire valuable inventory at quite a little, as little as 1euros/jewelry pieces. Imagine how much margin they do on every jewelry they acquire, mostly 200% win.
👨🏼⚖️ Auction houses and other online bidding platforms
When we talk about auction houses, we always refer to this closed room where people bet for a piece of art and the judge decide if it is sold or not. in fact, it is way more complicated than that.
How do they acquire these jewelry pieces? The jewelry is acquired by the auction house at minor prices from:
- Heritage of a dying person that doesn’t have the next generation to pass her treasury to
- Marketing: Brands that need to tap an even more luxurious audience, sell their exclusive jewelry pieces to individuals
- Brands and artists that are not able to sell their jewelry, put it in an auction that will relate them to a bigger chance to sell at a higher price without investing in displaying.
What happens behind the scene? The real truth is that the jewelry piece is not really appraised when acquired. It is briefly reported by an expert before the sale. Sometimes, we see cases such as that one that discovered later the fakeness of one or multiple gemstones. An early estimation is done to estimate the jewelry price, for example, 1000 euros, this is the price there usually start the auction at. You have to know that 1000 euros are already a win-win number where most pieces make enough margin to cover basic costs. Any extras go to their wallet 😉
Why the piece gets sold so high? Bet. The more people bet, the more the price goes up. 1000 euros becomes 20000 or even a million, depending on the traction.
Who buys from auction houses? Generally, jewelry connoisseurs and potential wearers mainly. Sometimes, you can notice some vintage stores owners try to acquire a more creative inventory to pull digital influencers.
Basically, the moral is to be more transparent when pricing a client for a product. Truth is always a better solution.