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.
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.
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.
$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.