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usc96
12-09-2010, 08:45 AM
How much mark up should one suspect with gold jewelry? I went shopping for a gold bracelet and was shocked by the mark up. I guess that comes from being in shops when people come in to sell their "scrap" gold. In those cases there is absolutely no premium for gold in jewelry form, and I've even heard the shopkeepers tell sellers that diamonds embedded or part of the jewelry have no value.

However yesterday I was quoted three and four times melt for jewelry. When I asked if the price was related to craftsmanship at one store, the lady insisted it had everything to do with the increase in the price of gold. She made that comment about the price being high because of the recent run up in the price of gold everytime I asked about weight. After the fifth time she made that comment, I responded that she really should stop saying that since I am pretty good at estimating weight, and at 14k, her numbers were way off. In other words, I would have respected her more if she had assigned the cost premium to craftsmanship.

About AG
12-09-2010, 09:00 AM
How much mark up should one suspect with gold jewelry? I went shopping for a gold bracelet and was shocked by the mark up. I guess that comes from being in shops when people come in to sell their "scrap" gold. In those cases there is absolutely no premium for gold in jewelry form, and I've even heard the shopkeepers tell sellers that diamonds embedded or part of the jewelry have no value.

However yesterday I was quoted three and four times melt for jewelry. When I asked if the price was related to craftsmanship at one store, the lady insisted it had everything to do with the increase in the price of gold. She made that comment about the price being high because of the recent run up in the price of gold everytime I asked about weight. After the fifth time she made that comment, I responded that she really should stop saying that since I am pretty good at estimating weight, and at 14k, her numbers were way off. In other words, I would have respected her more if she had assigned the cost premium to craftsmanship.

Markups of 3-4x are pretty common, especially at the chain stores at the malls.

Note that the lady wasn't entirely wrong -- the rise in price of their jewelry was due to the POG (whereas the markup is due to craftsmanship, middlemen, etc.). At $300 gold, they were probably selling for $900-$1,200/ounce. So if the price of gold doubles, and they double their price, the price increase was due to the POG and not craftsmanship.

usc96
12-09-2010, 09:29 AM
Markups of 3-4x are pretty common, especially at the chain stores at the malls.

Note that the lady wasn't entirely wrong -- the rise in price of their jewelry was due to the POG (whereas the markup is due to craftsmanship, middlemen, etc.). At $300 gold, they were probably selling for $900-$1,200/ounce. So if the price of gold doubles, and they double their price, the price increase was due to the POG and not craftsmanship.

I think I get it now. So the bracelet they would have made $600 profit on when gold was $300/oz, is now a bracelet they see as a $2,800 profit item now that gold is $1,400/oz.

I don't like it, but I follow your logic.

I wonder if other shoppers are balking too, or if they are taking it in stride? Maybe I am unique in that I know what the materials cost. if it were a markup based on a gemstone, I'd know I'm paying a huge markup, but how much I wouldn't know.

Moonstruck
12-09-2010, 09:35 AM
Don't pay retail markup for gold in jewelry from. :eek:

usc96
12-09-2010, 09:40 AM
Don't pay retail markup for gold in jewelry from. :eek:

Don't worry. I come from Irish (think survived potato famine) genes. We don't waste money like that. :cool: I am happy to give a store owner a reasonable profit, but I will not be price gouged just because her cost went up. Why does the same item merit its profit fluctuating so much? If an auto dealer's cost of inventory tripled, would the $99 over inventory commercials be rewritten to say $297 over inventory?

goldworks
12-09-2010, 09:50 AM
I'd be interested to see feedback from other people involved in the jewelry trade. From what I'm seeing locally, (US Pac NW) other shoppers may be balking as so far, this season, in venues with which I'm familier, does not seem to be producing sales at historical levels. I don't think it's necessarily markup awareness that's driving this, but a general continuing consumer malaise. FWIW, in shops where things are made on site, craftsmanship is the largest part of the retail price. And the poster who mentioned markup levels of merchants, (chain and credit stores) is probably accurate. Initial prices are very high so there can still be reasonable profit with the "discounts" that consumers have come to expect. I don't think it is completely accurate to calculate increased profits in the manner previously mentioned, ($600 to $2800 on a bracelet), btw. I can't fault the logic, but if that were the case, all the jewelry store owners I know would be rolling in dough now and that's just not the case. Quite the opposite. I think what is actually happening is that markups are sliding to encourage some volume of sales. Not that it's working...

TXKajun
12-09-2010, 11:13 AM
I looked at 14k gold necklaces last weekend at a pawn shop, WallyWorld and a downtown jewelry store. Necklaces only cuz there weren't hardly any gold rings!

The pawn shop and WW both had limited selections (very limited!) of stuff that you couldn't even tell you were holding in your hand. :eek: They were asking $200 for the necklaces. Also, there is now a form of jewelry called "hollow gold" that looks like it would contain enough gold you could tell you were holding it, but in reality, doesn't weigh hardly anything.

The jewelry store, on the other hand, had necklaces that actually had some weight to them. 12 grams and 16 grams, for instance. Course, the price for the necklaces were $650 and $850, respectively. So, figuring 14 k is 58.3% gold, the total weight of the necklaces in gold was a bit over 16 grams, or a tad over 1/2 oz. The jewelry guy said "I haven't marked these up since I got them a year ago, and they're worth twice what I have them marked." Being the crafty kitco'er I am, I thought to myself "Yeah, right. *snicker*" But seeing as how these actually had heft to them, I figured a bit under 2X spot wasn't actually all that unreasonable. Then I went home, went online and googled the same necklaces and yep, prices were about the same.

Soooooo, I figure ~2X spot for jewelry if you're buying. If you're selling, though, that's a totally different story! :D

Kajun

MaxGravy
12-09-2010, 12:48 PM
I bought two 24k chains last week at a pawn shop in Reno. One is 29.5 grams and has a 22k clasp. I paid $1400 for that one. The other is 46.5 grams and has a 24k clasp. I paid $2100 for that one. Spot was 1380 at the time. My wife absolutely loves them! Who says gold doesn't pay dividends.

gthrush53
12-09-2010, 01:05 PM
Go south...like St Maarten...streets lined with jewelry dealers. My B-in-law bought a 65 GM 14K bracelet last week for $1900...about $200 over spot. If he had bargained a bit more, probably could have got it at spot or better, and no tax....and free drinks all day, whatever you want. :D

insidedealer
12-09-2010, 02:44 PM
Look at it this way...if a jeweler has a 15.5g bracelet 14k bracelet in his showcase, and he goes to scrap it, he gets roughly $400. If he goes to replace it now after somebody buys it, it costs him $600-800. It's irrelevant if he originally bought it when gold was $65, or $650.
So....what should the jeweler do? He can scrap his store for $400 and then have nothing left and go out of business. Or, he can sell it for $600-800 and again have nothing left unless he replaces it at that same price, thus making no profit. Or, he can sell it for a little more than his replacement cost and stay in business.
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It's a balancing act for jewelers these days. We have a combination where there inventory has increased in value....but sales are terrible. Most jewelry stores are going out of business as their margins have shrunk due to the Internet, plus people don't have the money for luxury items. The jeweler has(or should) go through his entire inventory. Scrap those items that have been sitting forever. Lower the price to somewhere between scrap and replacement on the decent sellers, but common items, and hold his price on those very very few "unique" items. For most of his inventory, that means paying 1.5-2 times spot for new.
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For used, pawn shops sound good. St. Maarten sounds better:D I always liked that place. Been there many times including my honeymoon.

opalboy
12-09-2010, 02:58 PM
I'll tell you being a jeweler isn't that much fun right now, except for the cool gold stuff that people are bringing in to sell.
The price of gold is defineatly hurting us, for instance I do some wholesale stuff and for a very light "give away" 14k box chain that weighs less than a gram, will cost me $48 plus shipping, it used to cost 12 - 16, so people look at you like you are ripping them. But in a retail situation if you can get heavey gold at 2x spot, jump on it, but most are buying at 50 to 60% of spot, so don't feel to sorry for us.

opalboy

golditiki
12-09-2010, 03:48 PM
Don't pay retail markup for gold in jewelry from. :eek:


I have bought quite many fine pieces at spot when the first lift in the goldprice ( around 700 ) took place. The dealer was buying them at scrap and i bought from him at spot cash.
But that vein has more or less dried up ( you can't sell twice unique pieces ) and prices have been stiffening.

Last year around this time i had an eye on a very fine piece and we discussed several times the price, but the seller didn't buckle and i did not get the piece.
One day it disappeared out of the showwindow and that was it.

I learned my lesson and have since then given a bit of rope, and when i saw a very nice ring of appealing simple design, offered spot plus 100 euro cash.
The saleswomen / owner realized I knew the price of gold and after a firm offer from my side she counteroffered slightly above and we concluded the deal.
I considered the premium to be very low ( 130 euro ) almost one third of the premium the other seller's lowest counteroffer.

I will try to stick to that strategy. Think i will go shopping a bit in front of Xmas in Belgium.
I stopped bayonetting, am fed up to my nostrils with those endless post-, transport- and other strikes, if not at the dispatcher's then at my end.

Golditiki +++

Laynlow
12-09-2010, 04:27 PM
I deal a lot in gold jewelry I buy/sell/trade. It's a numbers game which seems to be more and more complicate with the market lately. People are hip to the potential value/profit which could be had. Still love it when a 14k chain comes in at 30g plus and people want $1400 because it said on tv gold was $1400/oz. I tend to roll my eyes and tell them to find those people on tv so they can buy it. It always seems to be easier that way then telling them how it works. I melt some of it and hold other fine jewelry which I can make a couple bucks over spot.

Holdfast
12-15-2010, 10:13 PM
How much mark up should one suspect with gold jewelry? I went shopping for a gold bracelet and was shocked by the mark up. I guess that comes from being in shops when people come in to sell their "scrap" gold.

However yesterday I was quoted three and four times melt for jewelry.

Today I spoke with a lady that sold her gold jewellery to one of those "Gold Kiosks" (You know the places in large department stores).

I watched the staff give her $290 AUD:eek:

I asked her, if she knew that gold was about $1400 per ounce?

She replied, no!

Then she said the total was 47 grams.

I asked her if she knew how many grams were in an ounce; she had no clue at all.

avalkyrie
12-28-2010, 12:11 PM
Today I spoke with a lady that sold her gold jewellery to one of those "Gold Kiosks" (You know the places in large department stores).

I watched the staff give her $290 AUD:eek:

I asked her, if she knew that gold was about $1400 per ounce?

She replied, no!

Then she said the total was 47 grams.

I asked her if she knew how many grams were in an ounce; she had no clue at all.

Yikes! I assume she was selling multiple pieces?

Not having either sold or bought gold jewelry, I did not know how many grams were in a troy ounce until I just now checked it out.

I made a purchase from the pawn shop in my hometown neighborhood (Lincoln Park) in Chicago over the holidays. I hope I got a good deal but I did not know to ask them to weigh the ring. The place is reputable; it has been on Clark Street for as long as I can remember and I pop in there every time I am in town. The quality of their jewelry inventory is usually quite impressive.

There was little foot traffic in the shop but my neighborhood always clears out over Christmas -- you can even find parking spots on Clark Street which in and of itself is amazing. I was in the shop twice and both times I was the only customer browsing; I did see one couple negotiating a loan.

It is a women's ring; a 1/10th ounce gold american eagle set in 14K gold. I don't imagine the weight of the 14K gold is much as the setting is filigree. The marked price was in the low $600's. We agreed on a sales price of $390. Since I live out of state, I asked them to ship it. That added an additional $15 (insured) but I saved some on the 10% sales tax. So, my final price was $405. The tag on the ring was dated October so I assume that is when it was put on display. I don't know how quickly they move their inventory.

When it arrives (hopefully tomorrow!), should I bother taking it to a jeweler to have it weighed? I don't doubt the authenticity of the ring, i.e. the gold content. I did not buy it to sell it; I simply like the aesthetics of the ring and the "novelty" as I am a dedicated gold-bug :-)

BTW, I am a Krug and Buffalo girl ... this is my first American Eagle. Merry Christmas to me :p

Numisgold
12-28-2010, 02:42 PM
Shopped around a pair of heavy 18k gold necklaces that weighed 165 grams total. 2 major chain jewelry stores offered about 20% of melt for them. The local pawn shop was about the same. At a coin shop I was offered 87% of melt. From a local gold wholesaler I know he offered 94% of melt. Lesson learned: buy and sell your gold jewelry to coin shops/dealers or regional smelters.

Gold jewelry can be a decent buy and an investment as well, if you get it from reasonable sources.

Numisgold

HighInBC
12-28-2010, 03:29 PM
After I lost my wedding ring and found it again 2 days later I decided to have another copy made just in case.

Instead of the $150 I spent in 2005 they wanted $340 for the same ring. When I asked why such an increase they told me it was the rise in gold. Well it is just a small 10k ring, even with todays high prices it only has $72 worth of gold in it.

It seems to be a standard line that jewlers toss out whenever people ask about the price increase. Needless to say I lost respect for that establishment. If they had just told me that they decided to charge more because they could I would have had more respect.

Saying a $190 increase in price on a ring with $72 worth of gold is due to the rising price of gold is simply lying.

prunggu
12-28-2010, 10:13 PM
Visiting the Inlaws in Sumatra for the holidays, I bought some local 24k jewelry for my wife for Christmas from her family's jeweler:

25g 24k bracelet for 10,200,000. IDR (1,128.94 USD)
1.25g 24k pair of earings for 500,000. IDR (55.34 USD)

I think I did rather well for the wife and got a decent price. I was expecting a stupidly high premium, but no. Perhaps going there with my mother-in-law, who has been buying there for years, made a difference. I don't know.

PM guy
12-28-2010, 10:32 PM
My coin dealer buys a lot of scrap. I think that I remember him shipping out between 1/2 and a million per month.

He buys for 65-70% of spot from the public. He will sell for spot very happily. Why would anyone buy from a jewelry store when there is a coin shop in the neighborhood?

I have watched them trash some really nice old antique jewelry. He gets it so fast that I doubt that he sells more than a few percent retail.

TigerEye76
12-28-2010, 11:19 PM
"It seems to be a standard line that jewlers toss out whenever people ask about the price increase."

Yep. I spotted a nice butterfly-pattern necklace with various colored amber stones in a jewelry store at Thanksgiving, and decided to buy it for my wife. It was priced considerably higher than the surrounding items. I asked the owner why and she replied that silver had gone up so much that everything with silver was much higher. This item has way less than an ounce of silver, so the recent bump from say 16 to 30 bucks couldn't have made much difference in the total price (around $300). But her explanation would probably seem real logical to most customers of hers.

HighInBC
12-28-2010, 11:41 PM
"It seems to be a standard line that jewlers toss out whenever people ask about the price increase."

Yep. I spotted a nice butterfly-pattern necklace with various colored amber stones in a jewelry store at Thanksgiving, and decided to buy it for my wife. It was priced considerably higher than the surrounding items. I asked the owner why and she replied that silver had gone up so much that everything with silver was much higher. This item has way less than an ounce of silver, so the recent bump from say 16 to 30 bucks couldn't have made much difference in the total price (around $300). But her explanation would probably seem real logical to most customers of hers.

Indeed it is nothing more than a lie for the uninformed. A shameful practice that tells me not to trust them.

usc96
12-28-2010, 11:52 PM
After I lost my wedding ring and found it again 2 days later I decided to have another copy made just in case.

Instead of the $150 I spent in 2005 they wanted $340 for the same ring. When I asked why such an increase they told me it was the rise in gold. Well it is just a small 10k ring, even with todays high prices it only has $72 worth of gold in it.

It seems to be a standard line that jewlers toss out whenever people ask about the price increase. Needless to say I lost respect for that establishment. If they had just told me that they decided to charge more because they could I would have had more respect.

Saying a $190 increase in price on a ring with $72 worth of gold is due to the rising price of gold is simply lying.

Sounds like we were shopping in the same store. I am the OP by the way. I solved my problem by finding a mount and giving my wife one of my quarter eagles mounted as a necklace charm. She's worn it several times since, so I'd say it was a success. :)

HardlyPeeved
12-28-2010, 11:57 PM
You could use a simple Silver or Gold chain to hold it and its a known quantity, and sets well.

The pamp 1g...
http://i859.photobucket.com/albums/ab155/HardlyPeeved/Gold_Silver_Pictures/pamp_1g.jpg

The pamp 5g...
http://i859.photobucket.com/albums/ab155/HardlyPeeved/Gold_Silver_Pictures/pamp_5g.jpg

What could be a finer piece ? :D

nealeffendi
12-29-2010, 02:52 AM
To pay multiples of the metal value to buy jewelry is nuts. Wait till you or a reliable relative stops off in a place like Cairo or Dubai and buy 18-21 carat gold cheaper than 9ct in the west. My wife has bought nice Italian gold chains that way at 1.2 times spot.
I'm sure there are other places (outside the middle east) that are also reasonable.

prunggu
12-29-2010, 04:43 AM
Here in Indonesia, there are still a lot of family-owned and run old-school home industry jewellers who have earned a name over generations, but still keep their business small and local. The place I bought from the other day in Sumatra is the best name in town. The family runs a small store front with smithing going on in the back. Every item sold is made there by them. Kinda cool to take a peek at the people working in the back making the stuff being sold out front at old-school workbenches. His family has been running the same shop for generations. I doubt this family business has the overhead costs that a retail shop --- large or small --- in the US or Europe has, nor do they need to deal with too many middle-men as they make their own stuff; hence, no stupidly high premiums. When my wife wore her new stuff to a wedding the other day, people were able to tell at a glance where it came from. I kinda liked that too.

usc96
12-29-2010, 06:50 AM
I mentioned the original scenario to a well off relative, and she said next time I need jewelry to talk to her, because she use to shop at the offending jeweler, but then she learned where the jeweler obtained their pieces, and now she goes directly to the source and avoids the mark up. ;)

glodenview
12-29-2010, 08:29 AM
hi,
I read this forum posting and also read your experience of gold purchasing. I just want to say please stop worried when you purchase gold and other metal.
Carat is a term that refers to the weight of a gold.It is those original carob seeds which are the origin of the word carat we use today.The majority of gold used in jewelry and sold loose in the United States are one carat or less in weight.

prunggu
12-29-2010, 10:33 PM
"karat" with a "k" indicates purity of a precious metal, e.g. 22k = 9166/1000 parts pure title metel.

"carat" with a "c" is for diamonds and other gems and indicates weight.

"carrot" with a "double-r" and "o"o is a delicious root veg.

HighInBC
12-29-2010, 11:30 PM
"karat" with a "k" indicates purity of a precious metal, e.g. 22k = 9166/1000 parts pure title metel.

"carat" with a "c" is for diamonds and other gems and indicates weight.

"carrot" with a "double-r" and "o"o is a delicious root veg.

"Caret" with an "e" is the little pointy hat above the "6" on your keyboard(^).

avalkyrie
12-30-2010, 06:57 PM
My ring arrived today via UPS! I bought this 1/10th GAE set in 14K for $405 (shipped/insured) from a pawnshop in Chicago. The bezel has a little wear that is only visible in the close-up pic. It looks like the coin is a 2006.

I just took the pics and would have included one with the ring on my hand but I am still recovering from a case of poison ivy (metal detecting injury) -- you don't want to see that!


http://i761.photobucket.com/albums/xx258/ddecimal_2009/IMG_6731.jpg

http://i761.photobucket.com/albums/xx258/ddecimal_2009/IMG_6733.jpg

goldbugny
12-30-2010, 11:32 PM
If you want jewelry, go to Asia.

In thailand (and places like India), the markup price for jewelry over spot is really small.

These guys: http://www.goldtraders.or.th/ post the daily buy/sell spot prices (the spread is only 100 baht, which is about $3.00)

The gold is priced per baht, which is about 15.2 grams. It is mostly 96.5% pure (~23k), very beautifully colored gold.

The markup for a 1 baht chain is about 450 baht ($12.00). So thats all you pay for the work on top of the spot. Much better than the 100-300% over spot you pay here.

Here is what the shops look like:
http://3.bp.blogspot.com/_u4mHfVAkUuk/SKl2stEx2pI/AAAAAAAAAWU/VPi1AF70Nr8/s400/goldshop.jpg

I'm never buying gold jewelry in the US again. If you want to pay low premium over spot, take a trip to Siam.

Go to chinatown in Bangkok, and go to one of the main shops there that is full of Thai people. You'll do fine.

RonaldW
12-30-2010, 11:59 PM
I will be on a cruise of Asia this coming April and Thailand is one of the stops. Will the merchants weigh the gold in front of you on a gram scale? Do they accept credit cards with no surcharge and how much over spot can gold coins be purchased for?

prunggu
12-31-2010, 12:35 AM
Indonesia is good for gold as well. I can recommend Toko Mas Selecta in Pekan Baru, North Sumatra. Not a huge selection as they make most of it there; mostly 24k, but some karated stuff as well; prices are not much over spot (26 Dec spot per gram was 402,000 IDR and they charged 404,000 IDR and rounded down to the nearest 1000 IDR round figure on the items I bought); no credit cards --- cash only; yes, they weigh it on a 0.001 gram scale in front of you.

Keep in mind that the word "mas' is short for "emas" and means gold; however, gold dealers in Sumatra also use the word "mas" as a unit of gold equal to 2.5g

Unfortunatly, there is really nothing for any tourist to see or do here (my InLaws live here; that's why I visit on occasion), but the gold and food are good.

Asia is good for gold.