Selling Diamonds – the real markup and why

ok let’s talk about the cost of diamonds…did you know they have to move and sift through a ton of dirt for every 1 carat of diamonds discovered? Then they sell the diamonds to a banker that is called a sightholder, who then has the diamonds cut into gems that can fit in your jewelry. We call them the bankers because they bear all the cost of getting the diamonds from the mine, all the way to the jewelry showroom. Nearly everything is done on memo, meaning the importers, wholesalers and retailers sign their name, promising to pay for the diamonds when sold to the consumer. There are several people on the way; the importer, wholesaler, manufacturer of jewelry with diamonds in it, and finally, the retailer, who has the most expensive operation, called a jewelry store/showroom. None of these people pay cash usually except for the sightholder/banker. When you, as a consumer, decide to sell your diamond, it is the banker that pays the cash, less all of those markups made along the way, meaning that a diamond that you paid 6000.00 for might bring as little as 600.00 cash.
One way to get more can be to memo, or consign your diamond to a jeweler, and wait to get paid when the diamond sells, making YOU the wholesaler/banker of the stone. This typically can eventually get you 2-3 times the cash price of the stone, but you have to be patient; it can take awhile for someone else to buy it.

Selling Gold

ok, lets talk about selling gold for a minute; you would not believe the amount of people who don’t understand that their yellow gold jewelry does not bring as much as they paid for it. Look, the cost of gold is only one factor in the price of a piece of jewelry, so lets discuss how a jewelry item comes into being.
First, you have to have an idea; a pattern. This is the designer’s part; and i understand because i am a designer and pattern maker. He/she gets paid for their idea. The pattern maker gets paid for their work, be it hand made or cad/cam, or computer design. Did you know a cad cam setup costs about 40,000.00? Then, the pattern has to be turned into gold, or silver, or platinum. Gold and silver have to be cast by the caster; platinum has to be done in an oven, which costs more. Then the item; lets say a ring, has to be cleaned and polished; if it has stones, they have to be set by a setter. Then on to the final polish, by the polisher. All of these processes so far are mostly done by a wholesale manufacturer. Then the mfr. has to sell it to a retailer, and now the real expense comes in; putting it in a retail jewelry showroom, which can cost from 75000.00 per month, for a non-mall small store up to hundreds of thousands per month for a mall store. The markup at this point becomes the largest; 6-12 times the manufacturers cost, and remember, he had to make money also.
So here you go into one of these showrooms, because who sells jewelry out of their house? You pay lets say 3600.00 for something that costs 300-600.00 wholesale. A few years go by; you break up; the love story comes to an end; whatever your situation…. what are your expectations when you take your now used ring to a gold scrapper? Usually a little high; lets be honest! but if you wrap your 30,000.00 car around a tree, your insurance will recover 150-300.00 in scrap for it. So please, people, calm your expectations, because we don’t sell used jewelry for new prices! In fact, it all gets scrapped for the gold value only! You just lost all of that designing, manufacturing, and retailing cost! And all of those people who contributed to you having a new ring, had a right to be paid and make a living! Any questions?