Should you change your pricing method going from silver to gold?

Today’s column is all about what to do when you’re going from pricing silver jewelry to pricing gold

“Hi, I wondered about pricing jewelry using precious stones and gold. I feel pretty comfortable pricing for items made in sterling and fine silver, but am curious about pricing in gold. I’d like to make the leap to include gold items in my product range, and need to figure out reasonable pricing, that includes still making enough money if I am in a co-op or selling to retail shops on a wholesale basis.”

Ah yes, the leap from silver to solid gold and also the leap in pricing (and costs – today’s gold price is over $2000(!) as of January 8th, 2024).

Pricing is one part math, one part art, and like 10 parts research.

I wish I was kidding about that last part, so get ready to do some digging.

The math of pricing

Let’s start with the math part, because honestly it’s easier than the rest. Plus, you mention that you are already comfortable pricing work that you make in silver, so I am going to make an assumption that you already know how to track the costs of materials and that you know how to mark up your work for wholesale and retail for silver jewelry. I am also assuming that you already understand how profitable your work is.

Whichever formula or structure you’ve settled on for sterling and fine silver jewelry you can usually still apply to gold and semi-precious gems*. Start with those numbers – the cost of the castings, the cost of the wire or sheet, the cost of the gemstones, etc. – and add your normal percentages and mark-ups.

The art of pricing

Once you’ve done the math, step back and look at the prices you’ve arrived at. They can and should be higher – much higher – than the silver pieces you make. After all, gold costs can be 50 or more times the costs of silver.

Also, working in gold will be a leap in expertise. It’s a new material using new skills and you’ll be learning the differences between the karats and the difference in how gold functions differently with your torch, your hammers or your rolling mill.

If you haven’t priced or sold karat gold jewelry before, you might be having some feelings about the price you arrived at. It might FEEL high. It might FEEL unsellable. But is it?

The research of pricing

Pick up your feelings about the prices of your new gold jewelry and set them aside temporarily because it is time to do some research.

Do you know who some of your direct competitors are? Do you know where you fit into the larger landscape of jewelry sellers, makers and designers? Do you know how or if your competitors sell gold jewelry?

Look at how similar brands to yours are pricing their work. Then look at how their pricing compares to yours. Take into consideration dimensions, weight (if it’s listed), process, branding, story – all of it.

Put another way, maybe someone has a similar enough product to yours, but their prices are lower. They might have made their piece hollow, or maybe they have outsourced the work to a country with reduced labor costs, or perhaps they used casting and molds for easier reproduction whereas you are hand-fabricating each piece.

If their work is priced higher, maybe the pieces are larger than yours, or they are using traceable materials that come with a higher cost, or perhaps they are charging for their expertise because they have the experience to do so.

If their work is pretty similarly priced to your work, then you could take it as a sign that you are right in the pocket of the right pricing for your work. It can take time to both build up the clientele and the experience to sell gold at a higher price point than silver, but consumers who want actual karat gold and not gold fill or plate will understand why the price is higher.

The point of this research is to both show you that your new gold pricing has a place in the world, and also to show you what information you might need in order to sell it effectively.

Side note: I cannot emphasize this enough – don’t do your pricing research on Etsy. You’d have to spend way too much time sifting through the drop-shippers and the under-pricers to find sellers who have a similar target audience to yours. Look around for the websites of other, indie designers who have either a similar enough dimension or a similar enough style to yours.

Last note

Selling gold and gemstone jewelry when you are used to selling silver and gemstone is a different marketing message, and in order to support your higher prices, you might also need to do other things for your business like bringing your packaging and brand message in line with the new price points. It will probably bring other changes to your business and pricing which is going to be great news for your bottom line.

Have a question for The Business End? Send it my way!

*Diamond and larger sapphire/ruby pricing is a whole other topic and is separate from a lot of other pricing conversations in jewelry.

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