% increase diamond rings bought in Mall

[D2B]

Hi

I was wondering if anyone can give me a rough estimate of how much the average mall jeweller would increase their diamond rings eg 20% 30% from wholesale prices, and does this vary to the high end jewellery shops. I am just curiouse about the mark up in the industry.
thanks

 

[denverappraiser]

Jewelry store margins will vary quite a bit from store to store and from product to product. As a rule, the percentage of the sales price required to replace the goods goes up with higher priced items. That is to say that the markup percentage on inexpensive items like watch batteries and silver charms is way better than on expensive items like big diamonds and Rolex watches. This makes sense but it leads to a widely held misconception about the profits associated with owning a jewelry store and the belief that stores double and triple their materials costs. On inexpensive items the markup can be 3x or even 5x while on diamonds where the stores cost is over, say $20k, consistently getting a 25% mark is doing pretty well.

It’s worth noting that some stores have a habit of putting price tags on things that don’t really represent their prices. What they call their regular prices may not be the prices that they are expecting to get when they finally find a customer.

Lastly, it’s worth noting that stores will often deliver benefits, and incur costs, that are not part of stone itself. This includes things like trade up programs, convenient display, financing, warranties, helpful salespeople, access to designers, lab services, etc. When you consider questions of markup, you must consider markup from what. ‘Free’ addons aren’t really free.

As a rule, malls are not the place to look for the rock bottom prices. Mall rents are usually among the highest in the city, the management requires the stores to be open very long hours, which means a big payroll, and the stores there tend to be among the biggest advertisers in the industry. They do this because it''s convenient and it brings in customers but it drives up their costs and consequently their prices.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[oldminer]

DenverAppraiser: Great answer to a difficult question.

The consumer must remember that the vast majority of shoppers do buy at chains and mass sellers of jewelry in spite of the discounting which goes on from the Internet and regular, non-chain retailers. Everyone has a place where they feel comfortable and most welcomed. Some people don''t like the anonimity of the Internet, some don''t like the snootiness of certain private retailers, some don''t like pushy sales help who work on commission, some don''t like sales help who know less than customers.

There are many things not to like, but once you find a situation that YOU like, then you will be in your comfort zone and you''ll find the items you want there. Mark-ups are only a small part of the overall picture when it comes to buying luxury items.

 

[Modified Brilliant]

Dave and Neil most likely remember when all items had a three time mark up. I know I do. Consumers still think that their local

jewelers are making a killing. Are they ever wrong

The margins have shrunk due to mass merchants, the competitiveness of

the internet and dozens of other contributing factors that continue to drive costs up. It''s a different retail environment today. Believe it.

www.metrojewelryappraisers.com