Absurd setting prices?

[TLS]

Is it just me or have prices for settings gone/become completely insane? I looked at a setting today that I loved. It was relatively thin, probably around 2mm or maybe slightly bigger on top with beautiful, tiny, tiny sparkly diamonds just on the top - they were extremely small but I liked them because they just looked very glittery.

In white gold the setting was 1100 dollars, in platinum it was 2,100 - what gives here? i know that platinum is expensive but seriously these prices are insane... and 1100 for a white gold setting????? There was not a lot of detailing or filigree on this setting - but I will admit it was beautiful. I still am having a hard time accepting the prices I am finding.

When I asked why the white gold was so expensive he said that the tiny melee diamonds were VVS quality and F/G color. Seriously though we are talking about itty bitty tiny diamonds, they weren''t even 2 pointers - smaller than that. How can they really ask 1100 bucks for it. I assume that they can ask because people actually pay these absurd prices. And I assume i will soon be one of these people paying these absurd prices.

I did notice however that these little tiny diamonds were much more sparkly than a another designer setting i looked at that had 2 pointers yesterday, so I am leaning towards buying it.... but I remain horrified by the prices.

I understand platinum is rare, whatever, but can someone explain to me the inflated price for white gold settings?

 

[denverappraiser]

In most cases, the biggest expense to a product is the labor, not the materials. This doesn't seem to surprise people for products like electronics, food or clothing but somehow jewelry is seen differently. There are manufacturers available who will make their products available very inexpensively and some of these are really quite good. Others charge more. Seiko makes fine watches but Rolex still seems to have satisfied customers, even for their stainless steel models where their materials cost is nominal and even amongst people who are aware of Seiko's high quality offerings.

Are you finding it difficult to find a mounting in your price point?



Neil Beaty
GG(GIA) ISA NAJA
Independent Appraisals in Denver

 

[TLS]

I am just a little frustrated because I really love the setting I have seen, but I really don''t think it is truly worth what they are asking. To be honest, I found a ring I like by A. Jaffe who generally has very high prices, yet he does have a platinum ring with small melee on the top and the price point is good - 1200 for platinum for the e- ring. To me that seems reasonable. 1100 for something very similar in white gold that doesn''t even have the well known designer name like A. jaffe seems ridiculous. And 2,100 for the same thing in platinum seems equally insane.

I prefer the setting I saw today though by the no-name designer, but am just frustrated with the prices. If me or my boyfriend end up spending 4 grand between the band and the engagment ring, then I feel like a fool because for that extra amount I could have bought myself into a bigger diamond instead - over a 1.5 ...

I found out the a. jaffe ring I was looking at for the 1,200 price is if the melee is H/I in color - do you think that is a problem that the melee is H/I for that price point, seemed lower than I would have expected for melee.

I wanted to work with someone locally to get this setting, but once i told her i was seeing this setting for this price on various internet sites she became very cold and unfriendly towards us...

 

[Garry H (Cut Nut)]

1. if you want to but apainting do you hassle the artist and say- it took you 3 hours to paint and the canvas and paints cost $100 so I will not pay more than $400!

2. Platinum should cost about double WGold - it weighs more, is 95% compared to 75%, and it costs more per ounce, and it is harder to work and finish well.

 

[TLS]

I realize all your points are valid and prices are what the market will bear - I understand all of that honestly, this was more of a venting thing for me I guess ...

just frustrated that I can''t find something nice for a more reasonable price.

 

[canuk-gal]

HI:

Don''t despair TL1, I got an estimate today to set my app. 4 carat loose Tourmaline (~cost $70 several years ago which I understand was a pretty good deal), in a simple/plain rose gold setting--$1200 Canadian. I guess you could say I felt little shocked too.........

cheers--Sharon

 

[strmrdr]

Yep a lot of dope smoking going around on setting prices.
The margins on settings are going up as fast as the margins on diamonds are coming down.

 

[DiamondsRagirlsbestfriend]

I too was shocked at setting prices. I thought switching my stones from a 14K gold band to platinum wouldn''t be all that expensive. WRONG!

A simple and well-crafted remount (with no additional diamonds) from a wonderful and trusted online vendor cost me nearly $1300. I''m over the sticker shock and very happy that I went for it.

I did skip a more eleborate design that had extra diamonds that would have run about $2500. We just couldn''t afford that.

I feel your pain....

 

[strmrdr]

Date: 1/14/2005 8:26:53 AM
Author: crankydave

Date: 1/13/2005 9:21:46 PM

Author: strmrdr

Yep a lot of dope smoking going around on setting prices.

The margins on settings are going up as fast as the margins on diamonds are coming down.

Now now... When's the last time you expensed settings?


Dave

Couple weeks ago.
Because some people are willing to pay insane prices on designer settings everyone seems to think they can charge the same.

 

[strmrdr]

The guy I have do my stone setting does the custom work for a number of local jewelers the markup is around 2x to 3x.
If he gets $600 the store will usualy charge the consumer between $1200 and $1800.
How do I know?
Someone I know was going with a custom setting by one of the shops he does the work for.
When I heard about it I sent them directly to him and they saved that much money.

 

[strmrdr]

Cost of doing business in this area has stayed pretty level the last 3-4 years.
Wages are down, energy costs up slightly.
Property taxes have been steady for a few years after some sharp rises yearly for about 10 years.

The store has no reason to have a problem with him.
He didnt go out and steal their customer.
The customer came to him with design ideas and he made it and charged his normal consumer rate.
Which is slightly higher than his wholesale rate but not 2x-3x over.
If the consumer had brought a cad drawing in from the store then they would have grounds to complain.
He doesnt keep it secret that he sells to consumers directly.

 

[strmrdr]

Dave,
All I can comment on is what I know in the parts of the expenses I have knowledge of.

So you think $1200 is a reasonable charge for making a phone call then handing the goods over the counter to customer?
Where do you see $1200 worth of value added to a $600 item?
I dont have a problem paying craftsman for their work but I bulk at paying for non-value adding service.

 

[strmrdr]

For the record its not just the jewelery industry that I have a problem with in this area.
Im just sick of some in the industry feeling that they are entitled to huge markups.
The computer industry used to be the same way then Dell came along and put those with that attitude out of business.
For our industry we charge higher than average markups but we add value to make it worthwhile.
We could not get the same markups by just dropping the computers at the clients door.

 

[fire&ice]

Date: 1/13/2005 8:38

2 PM
Author: TL1
I realize all your points are valid and prices are what the market will bear - I understand all of that honestly, this was more of a venting thing for me I guess ...

just frustrated that I can''t find something nice for a more reasonable price.

I have to concur. I *do* find the prices of settings staggering & beyond belief.

It''s no secret that many "designers" require those handling their products to charge at keystone or close. To not do so will result in loss of the "distributorship".

So - to issue of "expensed" - if said designer can sell the setting at x & make a profit, then the store must sell at y, why pay all that markup. Why not have a craftsman create the setting at the x amount. Obviously, it can be done for x or close to it to make a profit.

That''s my problem with the whole thing. It goes beyond actual cost of materials, labor & inspiration. At this point, it''s marketing hype & price fixing.

But then, I still like the simple tiffany style solitaire. More than 9 out of 10 gals getting engaged in my days of the dark ages, received this style. Doesn''t seem to be the case anymore.

 

[noobie]

Date: 1/14/2005 11:27:37 AM
Author: Feydakin

I can raise the price of water a few points - to 55% gross margin to help offset the losses in Milk sales, and make the neccessary business changes to make it possible to survive on 52.5% markup.. Less advertising, fewer employees, and instead of aiming for retirment at 55, I aim for 60.. But, of course, now I'm evil for trying to make up the lost margins on other products..

No you are not evil. What you are doing however is creating an opportunity for someone with higher efficiency, better scale, more purchasing power and probably overseas manufacturing facilities to offer "water" at 40% or less. This is the way of the world now and not unique to jewelry.

I'm not surprised to see setting prices increase and become elaborate as diamond prices approach "commodity" (strm, not debating on pricing levels here, just margin of cutters and vendors). My personal view is that this market will shake itself out it in time to a two tier; custom high end niche branded and more mass produced lower priced settings that look similar but not have the name and name marketing hype or perhaps level of hand finish. However I do believe the overall quality will improve and prices will fall and vendors, manufacturers will have to adapt. However, I could be wrong.

 

[fire&ice]

Date: 1/14/2005 11:27:37 AM
Author: Feydakin
But this is not unique to the jewelry market.. At every level along the retail process a markup is added.. Every person that touches the item makes money.. To think otherwise is a bit naive.. But, since we are on a jewelry focused forum, we jewelers get beat up on.. In many cases, unfairly..

Agreed - and if we were on a pocketbook forum - I'd be beating up the folks who sell a dopey canvas or plastic bag which cost x to make for ridiculous sums of money. But, we are on a jewelry board.

I understand economics. What I can not understand - or rationalize in my mind - is these absurd prices of designer anything. It seems this is the way of our society - and keeps getting progressively worse. It seems like it's not about the quality -- it's about the name. And, quite frankly, I find that in the jewelry prof. the quality is more in line with the price that is charged. But, I still find the prices to be too high for what it is. And, people seem to almost be *proud* of paying so much. It's like bragging rights. It's like it not only becomes part of the cache - it is the cache. I'd rather throw money out of a plane. At least someone else will benefit from the free fall.

I had a fellow rant w/ my best friend (of course about the good ole days

). We could rest assured that if we went in a certain store that we would get a quality fabric, styling and tailoring. Sure, we may have paid a premium to shop there - but we got a relatively better product. Today, it's all about the name only. Most clothing is made in the *same* "third world" country. My quilted jacket that I bought at Walmart for $30.00 was as equal if not better quality than the Talbots jacket I saw yesterday on sale for $70.00.

I simply don't understand the concept of paying for a name as the only decision in the making.

 

[noobie]

Date: 1/14/2005 11:41

2 AM
Author: fire&ice
I''d rather throw money out of a plane. At least someone else will benefit from the free fall.

Will you be taking that money out of your Prada or Louis Vuitton bag as you throw it out of the plane

 

[fire&ice]

Date: 1/14/2005 11:51:48 AM
Author: noobie

Date: 1/14/2005 11:41

2 AM
Author: fire&ice
I'd rather throw money out of a plane. At least someone else will benefit from the free fall.

Will you be taking that money out of your Prada or Louis Vuitton bag as you throw it out of the plane

I will be taking out of my vintage croc purse or my artsy fartsy fabric purse (30.00 from a local craftsperson - thank you very much.

I really do practice what I rant.

Funny, one of my friend's friends went on and on about how cute my walmart jacket was. I mentioned I bought it at walmart. That received the weirdest reaction. Like all of a sudden my jacket was made of poop. Didn't matter to me. Thought it odd though.

 

[Michael_E]

This conversation is VERY interesting. My take on the issue of setting costs skyrocketing is that it has more to do with Dave''s last comment about this becoming a three class system than anything to do the costs of business. It boils down to the question posed to jewelers,"Which of these three markets do you choose to serve ?". The $1100 ring, which was the start of this conversation, was not meant for the lower or middle income range of this three tier culture. It was pointed directly at the higher end. The higher end doesn''t care, as much as the lower tiers do, what an object costs, as long as it''s within a comfortable range for their spending and the quality is first rate. They are the people that any smart jeweler will aspire to sell to, since anything that is sold to them allows higher margins and incurs far less demands. So how does a jeweler sell to that segment ? Well, Brand your goods or sell a branded designer line AND raise your prices to the level that is expected by the market. This is the direction being taken to those selling anything to the upper financial end of our society.
What about the middle. They still exist,and are not shrinking that all that fast, but they are being pinched from all sides by price pressures, because they WANT the nicer things and can''t afford their increasing costs. So what do they do ? Well, find someone who is selling to the middle and use their skills.
This pinch in the retail jewelers ranks has been happening for a long time now and it is getting tougher all of the time. The lower and lower middle end has been totally removed by the big players such as Wally World, the tv home shopping networks, E-bay and many Internet vendors. Large diamond margins have been decimated for retailers by the ''net. The middle and even upper ends of society are beginning to turn to the ''net for cost or convenience reasons. From a retailers standpoint it can be hopeless. I have personally dropped my retail shop this last year because it became a pointless exercise in trying to make ends meet by selling watch batteries. YUK !
Back to the point. What do you do if you are in the middle, have champagne tastes and a beer budget ? You find someone like me. This is not a pitch, it''s just that there a LOT of very skilled jewelers out there that don''t have the advertising budget, high traffic location or enough word of mouth advertising to get enough of this kind of business. These are people who may have a small shop, may work on the ''net, may be where ever you can find them. They can and will welcome the opportunity to make that ring and will do it at a lower cost and a higer quality then you might find in the places that cater to the high end. The key here is in looking around. The providers to the middle don''t have the big name, they don''t have the big advertising budget, but they do have the skills and the desire to make you some very fine jewelry at reasonable prices. You just need to look for them.

 

[strmrdr]

Michael_E Hit it on the head.
I search out people like him for my setting needs.
The guy I work with localy is a single person shop that is willing to do great work
and sell it at reasonable prices.
Mostly other jewlers are his customers but the advantage is there for
consumers that can find him.
Iv bought stuff from Micheal_E, him and my local guy are my kind of setting vendors
with a high value to price ratio on quality work.
If I hadnt found the local guy then Michael would probably be doing my gemstone setting for me.

I find it funny how a couple people get their undies all in a bunch when I point out
that in a lot of cases the jewlery industry as a whole doesnt provide a lot of value
for the buck.

 

[strmrdr]

I dont see very many others getting upset about it.
They know im not talking about them when I say something about the industry
in general and a lot of them share the same feelings.

Maybe in your case it hits a little too close to the truth?

 

[fire&ice]

Date: 1/14/2005 2:44:28 PM
Author: Michael_E
The higher end doesn''t care, as much as the lower tiers do, what an object costs, as long as it''s within a comfortable range for their spending and the quality is first rate. They are the people that any smart jeweler will aspire to sell to, since anything that is sold to them allows higher margins and incurs far less demands. So how does a jeweler sell to that segment ? Well, Brand your goods or sell a branded designer line AND raise your prices to the level that is expected by the market. This is the direction being taken to those selling anything to the upper financial end of our society.

Agreed to a certain extent - but I think I would insert *perceived* quality. My point is that they may be getting a certain level of quality - but the price doesn''t warrant the markup.

In other words:

setting A costs 10,000
setting B costs 5,000 (nice round numbers here folks)

BUT........setting A is *not* twice as setting B quality wise. In fact, little difference exists except brand. Sure the brand has worth - but twice that - not in my book. THAT is what I am talking about. Neither check would be difficult to write; but, that 10k check would be painful if I wasn''t getting the value the price commands.

I completely concur about the middle market. My biz is a barometer for the future ec. climate. We see the middle market drop out immediately when an econ. downturn hits. What I see now is quite different. The middle is shopping elsewhere. There demographic is still there - but their shopping habits have definitely changed.

At the end of the day, I think customer service is the most important thing to sway someone to pay more. I go out of my way *and* pay more for an item that is made by someone I know. The product consisitent. The service exceptional.

 

[canuk-gal]

HI:

Date: 1/14/2005 2:44:28 PM
Author: Michael_E
This conversation is VERY interesting. My take on the issue of setting costs skyrocketing is that it has more to do with Dave''s last comment about this becoming a three class system than anything to do the costs of business. It boils down to the question posed to jewelers,''Which of these three markets do you choose to serve ?''. The $1100 ring, which was the start of this conversation, was not meant for the lower or middle income range of this three tier culture. It was pointed directly at the higher end. The higher end doesn''t care, as much as the lower tiers do, what an object costs, as long as it''s within a comfortable range for their spending and the quality is first rate. They are the people that any smart jeweler will aspire to sell to, since anything that is sold to them allows higher margins and incurs far less demands. So how does a jeweler sell to that segment ? Well, Brand your goods or sell a branded designer line AND raise your prices to the level that is expected by the market. This is the direction being taken to those selling anything to the upper financial end of our society.
What about the middle. They still exist,and are not shrinking that all that fast, but they are being pinched from all sides by price pressures, because they WANT the nicer things and can''t afford their increasing costs. So what do they do ? Well, find someone who is selling to the middle and use their skills.
This pinch in the retail jewelers ranks has been happening for a long time now and it is getting tougher all of the time. The lower and lower middle end has been totally removed by the big players such as Wally World, the tv home shopping networks, E-bay and many Internet vendors. Large diamond margins have been decimated for retailers by the ''net. The middle and even upper ends of society are beginning to turn to the ''net for cost or convenience reasons. From a retailers standpoint it can be hopeless. I have personally dropped my retail shop this last year because it became a pointless exercise in trying to make ends meet by selling watch batteries. YUK !
Back to the point. What do you do if you are in the middle, have champagne tastes and a beer budget ? You find someone like me. This is not a pitch, it''s just that there a LOT of very skilled jewelers out there that don''t have the advertising budget, high traffic location or enough word of mouth advertising to get enough of this kind of business. These are people who may have a small shop, may work on the ''net, may be where ever you can find them. They can and will welcome the opportunity to make that ring and will do it at a lower cost and a higer quality then you might find in the places that cater to the high end. The key here is in looking around. The providers to the middle don''t have the big name, they don''t have the big advertising budget, but they do have the skills and the desire to make you some very fine jewelry at reasonable prices. You just need to look for them.

HI:

Thank you for this thoughtful reply.

Case in point: to date I''ve had three estimates to set my tourmaline into a ring. All three vendors I''ve worked with before for custom benchwork and respect their abilities. One shop employs several staff and a designer, while the others are two only both married couples--the hubands are the goldsmiths with their wives acting in various capacities. All were shown the same photo, drew the same specifications based on the same design, same gold content (14K), and same gold weight. The estimates were $1200, $750, and $480 Can., respectively. Quite frankly I was greatly surprised at the outlyer estimates, and simply thought that the middle estimate would be what I would find in all three places. Now I am glad I shopped and compared since the only stamp that will be featured on the shank is 14K, I do not see any added value in spending $1200 for what elsewhere would cost me significantly less.

Interesting indeed.

cheers--Sharon

 

[denverappraiser]

Date: 1/14/2005 5:39:13 PM
Author: strmrdr
I dont see very many others getting upset about it.
They know im not talking about them when I say something about the industry
in general and a lot of them share the same feelings.

Maybe in your case it hits a little too close to the truth?

Storm,

Nah, I’ve been lurking because Dave speaks his case pretty well. I’m solidly with him so I guess that means I’m supportive of jewelers who have absurd pricing.

I’ve bought original artwork when perfectly good replicas were readily available and I’ve paid a substantial premium to get it. The decorations in my home are no more beautiful because of this extra expense but it makes me ‘feel’ differently to have the original. I also eat at restaurants where I will pay $35 for a 12 oz. piece of beef despite the fact that I could buy 1/2 of a cow for less than $1/pound. I am a very picky customer for most of what I buy and tend to demand an extremely high level of both quality and service. I regularly pay a premium for this and I’m occasionally disappointed at the results. I suppose this makes me a fool in the eyes of some. I’ve no doubt that I could arrange an equally nutritious meal at a substantial savings if I shopped elsewhere.

I’m certainly with you that I’m unwilling to pay a premium rate for second rate work but I have to say that I no problem when I see the chef of my favorite restaurant drive up in a Hummer that she bought with her ‘excessive’ profits. I actually kind of like it that her cooking and business skills have, over time, led to her success and that I’ve been a part of that.

Neil Beaty
GG(GIA) ISA NAJA
Recovering Goldsmith in Colorado

 

[strmrdr]

Neil,
Would you be willing to pay $70 for that same steak at the place next door when the waiter just goes next door and gets it and hands it to you??
Then complains because the other restaurant is selling the steak for $35 to mere peons.

Thats what im talking about and exactly what im seeing said in this thread.

 

[Kaili]

I want to start out by saying that I completely respect and admire the art and craftsmanship that goes into a ring setting or other piece of fine jewelry. Hand work or pave seems to be a difficult and time consuming craft.

What I wonder, though, in the case of a simple solitaire setting is... are we paying more for the setting to offset the fact that the margin of profit for diamonds has gotten smaller? I''m talking about the huge price difference between, say, Store A vs. Store B using the same raw materials.

???

 

[strmrdr]

Date: 1/14/2005 6:55:22 PM
Author: Kaili
are we paying more for the setting to offset the fact that the margin of profit for diamonds has gotten smaller?

yes

 

[denverappraiser]

Date: 1/14/2005 7

1:51 PM
Author: strmrdr

Date: 1/14/2005 6:55:22 PM
Author: Kaili
are we paying more for the setting to offset the fact that the margin of profit for diamonds has gotten smaller?

yes

yes

 

[Garry H (Cut Nut)]

My store also competes with upstairs custom workers.
I have 6 jewelers instore - it costs more, but the communication is better.
Also in my experiance my sales staff are better designers of custom work than jewelers because they are better atuned to customers while the jewelers are more focused on the product - every customer is likely to end up with the same solution from each jeweler. but each bench jeweler will direct the design to his or her favourite style.

So like the waiter in a nice restraunt who knows you like your salmon rare to raw inside, there are all sorts of hidden extras that come from "value added services"

 

[noobie]

Date: 1/14/2005 7:14:23 PM
Author: crankydave

The jeweler you prefer to deal with and the prices you prefer exist because of the other more expensive outlets that contract him to do their work. For the sake of our discussion, lets eliminate the outlets you contend have no added value e.g. the places that charge 1200-1800 for the 600 he bills. Now what? Customers go directly to him and everyone else like him.


No way to handle the demand as a one man show anymore. Gotta hire someone, maybe two. Gotta have some sort of 'place' more suited than just a shop and/or office to handle it. This costs money. The 600 tag is now 800. What about the additional insurance to cover clients while on your property? What about the new POS system, inventory and accounting system that you need now? The 800 tag is now 1000, then 1200, then 1800. Slowly but surely the expeses add up that need to be paid for. Sooner or later someone comes along without those expenses and says 'Hey, I can do the same the for 600'.

Maybe so Dave, but not always. The custom jeweler I work with recently stopped all wholesale work for local stores. I asked why in the world would you do that? My reasoning was that they could provide a stable base albeit at lower margins with teh capability to leverage repeat designs for cost savings. His reply was that he was tired of fighting with them to get paid. No one respected 30 net 30, it was 3,4 months and more behind. All the trouble to collect was wearing him down. They even told me a story of a major chain with some high end stores that didn't pay when they first started out. It almost ruined them when they worked out of their basement.

This jeweler has staff, building, insurance, POS, inventory, latest machines and still gives great service and value. Probably charges $600.

Also your expenses will scale with volume and become more efficient. So as he grows if he manages well, then his unit cost should actually decrease.

I don't wish to debate strms and your positions, but what I object to is the guy that has to charge $1200 for something $600 because he can't run the other parts of his business well enough.