Sunday, November 6, 2011

Wholesale gold jewelry trading guide for entrepreneurs

By Agus Rahman

For those of you who are thinking about selling gold jewellery, it is vital that you understand fully how to determine the price for gold jewelry. Not just this might assist you to inform a good deal from a bad one, it too helps to analyze your competitors and understand the market better before you make any investment. Gold price

The most important a component of wholesale gold jewelry trading is to understand the breakdown of the cost of a piece of gold jewelry. Let�s say the existing good price is $500 per ounce. To calculate the cost of gold for a piece of 14 karat gold jewelry that weighs 3 gram without any stones, we original divide the price per ounce by 31. 5, to get the price per gram, which is $15. 87. This is the price of pure gold. To convert this to 14K gold, knowing that there are 24 karats in pure gold, we divide $15. 87 by 24 and multiply the result by 14. The price per gram for 14k gold is roughly $9. 26. Thus, the total cost of the gold for a 3 gram ring would be $27. 78.

Labor Cost One other major a component of the cost for a piece of gold jewelry is the cost for labor, particularly for pieces established with precious stones. Gold jewelry usually requires confident filing and polishing after it's cast out of the mold. The labor cost can sometime be as high as $2 per gram, depending on the source of the jewellery and also the fashion. In addition, the cost of setting any stones on a gold jewelry might be over one dollar per stone. Certain advanced setting such as channel set and invisible set cost even more because of the high level of craftsmanship required.

Markup of Competitors A good way to analyze if a confident trend of gold jewellery is profitable and beneficial for a business is to understand your competitors� prices. Since you already know how to calculate roughly the cost of a piece of jewellery, and for this reason the price that you can get it, buy looking at the markups of your competitors, you might get an idea of how severe the competition is. For instance, if the competitors are marking up the jewellery three times of the cost, the competitiveness of that trend is not really that high. On the other, if everyone has identical pricing additionally, the markup is 50% above the cost, the style can have already saturated the market.

Volume trading Another angle of looking at the pricing issue is that when the competitors are marking up at a low margin, the item is probably accepted by several consumers. The justification behind it is that when the profit per piece is low, and people are trading them actively, there probably is a high demand for it. On short, the higher the profit margin, the low the volume of sales and the low the profit margin, the higher could be the volume of sales. Another point that is worth noting is that the volume theory as well applies to jewelry vendors. If you buy in massive quantity, pricing should go down automatically. So, running a successfully business involves delivering the balance between all the factors within the resources and infrastructure you have such as employees and capital.

Closeout Jewelry Since jewelry business is highly time-sensitive, styles that were once popular many months ago may not sell at all couple months later. So, when buying gold jewelry wholesale, you have to estimate the monthly sales and stock according to the sale volume. For example, you might want to stock a certain style for two months worth of stock and restock it when it runs out in order to minimize the closeout products in the inventory, which is sometimes referred to as inventory shrinkage.

By understanding the market and your competitors before buy wholesale gold jewellery, you may reduce the mistakes during your entrepreneurial endeavor, thereby increase the chance of succeeding tremendously.

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