On my artisan highhorse

I’m fixin’ to git irritated.

We’ve all been taught that good jewelry is a good investment.   And what is good jewelry?  Good jewelry is jewelry made of precious metals, and  set with precious or semi-precious stones.  The value, we’ve been taught, is in the resale value.  And I do believe good jewelry is a good investment, but not all “good” jewelry is created equal.

Recently, a neighbor went to an upscale national jeweler and purchased a lovely necklace for his mom.  When the piece was described to me, I couldn’t quite picture what the pendant looked like, and so I went online to see if the jeweler’s website showed a picture of the necklace.   It’s lovely, and I’m really annoyed.  I’m annoyed about the public perception of jewelry value.

At the time, I spent days telling everyone in earshot about how deeply offended I am by this necklace.  Weeks later, and I’m still asking anyone who will listen, “Can you believe that necklace was a thousand dollars?  A thousand dollars!  A thousand dollars.  Seriously, can you believe that?”  Everyone assures me that, no, they can’t believe it and they are as appalled as I am.   I’m not sure I believe them.  But blogosphere, listen!  Ima break it down for you, k?

First, the facts, and then I’ll show you the necklace.

1. The resale value of jewelry lies in two things: the value of its materials, and/or its pedigree.    How much gold is in the piece?   Is it rare or an antique? Was it made by a renowned designer?  Most jewelry is not rare and not made by a famous designer, and so the investment value of most jewelry lies in its material worth.

2.  Material value is based on the current price of raw materials at the time you  sell your “investment.”   What you paid for your jewelry–its retail price–doesn’t matter one bit at the time of resale, unless the piece is rare, antique or has a designer pedigree.

3.  Next, bear in mind the basics on how prices are usually calculated: Wholesale is roughly 4-5X the cost of manufacturing the piece.   Retail is usually double wholesale.

So, here is the necklace that offends me so:

I am offended

The jeweler’s description says that this pendant is 14k white gold, and is set with 47 diamonds totaling 1/2 carat in weight.  The pendant hangs on an 18 inch box chain.    It is a new piece from a large retail chain, and therefore is not rare or antique.  While the jewelry store is upscale, its reputation is not such that it would confer a designer pedigree upon this necklace.

This next part is very secret, so don’t tell anyone, ok?  I could be kicked out of the jewelry club and not invited to any of the sleepovers anymore for sharing this information.  I’m going to tell you how much it costs to make jewelry. I’m going to tell you how much these materials would cost for me, at my wholesale prices, although  I imagine that this large national chain buys their materials at much lower prices.

The pendant:

My current wholesale price of 14k white gold  is 35.47 per DWT (a DWT is about 1.5 grams).  There’s very little metal in this pendant, and I estimate that it weighs no more than .75 DWT, for a metal cost of $26.60.

The diamonds:

Say the word “diamonds,” and everyone has a huge collective diamond orgasm.  They should totally not.  The total carat weight of this piece is 1/2 carat, and that and a nickel will get you…..not much.  While the website says the pendant holds 47 diamonds,  I count 31 white diamonds, and 18 champagne.  The champagne appear to be significantly bigger.  Based on the given dimensions of this piece, I’d say the white diamonds are 1 mm stones, and the champagne are 1.5 mm.  My supplier offers good quality 1 mm diamonds for$2.00 per stone.  Champagne are $1.50  Total diamond cost: $89.  See?  Why are you orgasming over diamonds? Stop it.

The 18 inch box chain:

My wholesale price, if I purchase ten or more of these chains, is $34.50.  I imagine if I ordered thousands of chains that they’d bring that price down a bit.

Total material cost:

26.60 + 89 + 34.50 = $150.10   Again, this is based on MY wholesale prices.  I have no idea what prices a large, national chain would pay, but I imagine it would be significantly less than my cost.  One thousand dollars, people.  One thousand dollars.

Now, let’s talk about artisan jewelry.

Simple Diamond Ring

The gold in my Simple Diamond Ring weighs,  on average, 1.8 DWT, for a metal cost of $62.23.  The 1/4 ct diamond currently wholesales for $58.   Total material cost: $120.23.   I charge $400 for my Simple Diamond Ring, and that price is in the range other artisans charge for similar pieces.   My ring looks as if I might go a bit heavier on the gold than my competitors do, but I’d say our material costs are within $30 of each other.

*What I’m not accounting for (but my head might pop off if I don’t mention it), is the labor involved in each of these pieces.  The commercial piece is mass-produced by casting, and then polished and quickly set with stones.  My piece requires hours of work.  I do not use milled stock, but forge my work from ingot to finished piece.  I could save time by using standardized milled stock from my gold refiner, but then my pieces would have the perfect symmetry of commercial jewelry.  And then I’d have to be mad at my own jewelry.

To summarize:

$150.10 of materials in a mass-produced piece selling for $1000.  The workmanship? Feh.

$120.23 of materials in a unique, custom-made piece selling for $400.  The workmanship?  On behalf of myself and other artisans, total awesomeness.

My point is this:  artisan jewelry is a better investment, and that necklace makes me mad.  Artisan goldsmiths sell their jewelry at prices much closer to wholesale prices, which means less devaluing of your investment. With an artisan piece you are NOT paying for national advertising, a big store,  a retail staff, executives, and a team of mechanical laborers.  You are paying for materials and the time of an artisan.

Artisan gold is a much better investment because we price much lower.  Why?  Because we’re stupid.  We’re artists.  If we had good business sense, then we’d be upscale national jewelers.


16 thoughts on “On my artisan highhorse

  1. this is really great. i love love LOVE etsy and spend a lot of time on that site and at local fairs. my mother was an artist and i’ve always loved supporting independent artists, but one of the hardest things to convince others of is the reasons to spend what seems like more money on an artisan piece, instead of something mass-marketed. this is a perfect tutorial of why!

  2. Thank you for posting such great info. I am saving to buy one of your beautiful rings to reward and remind myself of a goal I hope to achieve. I love that the jewellery I hope to buy is HANDCRAFTED with passion and soul. Life is too short for crap!

  3. *bows to you*
    M’am, you have just eloquently summed up what my bumbling self has tried to explain to people on countless occasions. Now I can just give them a print off of this post and subsequent comments.
    And that necklace is the Ed Hardy of jewelry. Blech. Finding a piece of jewelry from a high end mainstream store that HONESTLY takes my breath away is a moment that is very few and far between, but artisan jewelry always makes my heart thump a little harder, even if it isn’t the best piece in the world, simply for the love and effort obviously put into it.

  4. Ok, so, I’m going to play devil’s advocate because

    a) I like arguing. I admit it.
    b) I am a hobby economist. Which means I really don’t know that much about econ, but I can fake it pretty well.

    So here’s my counter argument. If the market will bear it, then ok. It means that even tho you don’t value this piece, they do. They value it enough to part with $1000 without being forced. You can dislike it all you want. But it’s there money they’re freely parting with. So they may value it even if you don’t. Diversity of opinion is good.

    Second there’s a concept in econ called “asymetrical information”. That’s when one side knows more than the other and bad trades result. For example, buying insurance with an undisclosed pre-existing condition. Or used cars.

    In this case the missing info is the cost of the parts. You are providing a valuable service that emerges in almost all markets: expert review to help close the information asymetry gap for buyers. Thank you!

    It’s still TBD whether the market will continue to buy this even after your (and I preume other’s) negative review. But if they do, then respect that. They’re spending their own money. Maybe that’s actually what they want.

    Perhaps it suggests an opportunity for your business to make a lot more money for less cost & effort. Say for example if you made these and sold them for $500. That’s over $400 for the effort. OTOH you risk diluting the brand that you’re establishing in non-generic jewelry. So I suspect you won’t do it. Still if this thing sells you always have a backup plan in the event that you’re really strapped for cash.

    Ok. Done. You may commence the verbal beat down now.

    1. I don’t disagree with you. While this necklace is not my taste, I’m sure it is someone’s, and I hope that I did not pass aesthetic judgment on this piece. If this is the most beautiful piece in the world, in a consumer’s eyes, then it is surely worth every penny.

      My issue is with the misinformation which partially fuels the purchase of this type of jewelry. If long-term value is being touted as a reason to buy this type of jewelry, which it is by commercial jewelers, then the consumer is being mislead.

  5. I’d hate to pass judgment on this necklace and say that it’s not attractive, because attractive is in the eye of the beholder. But I think it’s fair to say that it’s generic; it’s a good example of homogenized, mainstream jewelry. It’s the cheap t-shirt of jewelry, and what bothers me is that it is marketed and sold as the haute couture cocktail dress of jewelry.

    The jewelry industry can get away with this because most consumers aren’t familiar with the basic ingredients of jewelry in the way they are with so many other consumer products. We can feel good leather and silk, we can taste good food, we can feel the way a new car handles and brakes, but with jewelry we gauge value primarily upon the information the jewelry industry gives us. It behooves them to teach us that their product is more valuable than it really is, and consumers are totally drinking that Kool-Aid.

  6. After talking about it today, it became clear that while I am offended at the price because it is a soulless, and frankly unattractive piece, Katie is far more offended by the whole value for the money issue. Andrea’s right — there’s no love there.

  7. Hmm, thanks for that, I have always wondered. Now that I know, I will likely avoid national jewelers for future jewelry purchases.

  8. Thank you so much for this candid education. I love artisan jewelry– it’s my preference– and now I can smugly say it’s the better investment, too– with all sorts of information to back it up.

  9. I too am offended. That in my opinion is not a very good looking necklace. Where is the love? The love?! No one loved that necklace into reality, no one. It does need an artisans touch, truly. That is why I can’t wait to show off my jade ring and my Mother’s earrings because they will be made by an artisan, who will lovingly handcraft them both. I will shout from the mountain tops of Montana, “These pieces of artisan jewelry were lovingly made, they are unique and I will direct you to Vaka for jewelry, handcrafted, designed and made with LOVE, LOVE!!!!”

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