Marketing and Pricing Part 1

It didn’t take me long to realize that the people to whom I was trying to sell my jewelry product knew just as much as I did about the manufacturing process. They knew the procedures and the rough cost to create a piece of jewelry. A current gold price is quoted everyday and diamond prices are standard. The only contentious areas may be prices for colored stones and the price of labor. Since the sum of the colored stones and labor are usually a small part of the finished commercial jewelry piece there is not a lot of room to maneuver. 

As a manufacturer I would be showing a sample line of up to a thousand pieces to buyers at brand stores and department stores, wholesalers and even other manufacturers – from all over the world. Firstly, I needed to keep them coming back, secondly, I needed a pricing strategy that could accommodate them all and most critically I needed to make a profit. The key here, one must not forget, is that my clients needed to be able to quickly and easily sell my product in their marketplace.

Jewelry is a part of the fashion business. My first piece of advice would be to design a product that would sell itself, if you can. It needs to be contemporary and with broad appeal. It needs to be proportioned properly, costed properly and be made well. Another important consideration is that it must be practical. When all those boxes have been ticked, then it needs to be presented in such a way as to be customizable by the buyer for their market. 

To keep up to date, one must keep their eyes open all the time and be able to take advantage of new ideas by carefully directing your designers. There is a sense to it, and the creative juices must flow - some are better than others at this. To recognize and watch someone who is good at it is advantageous. The choice of materials is endless. Colors textures, setting styles and combinations. 

Listening well to existing and potential clients also pays off handsomely. A good manufacturer is always adding new design to their sample line. A new design added everyday will keep a line fresh and interesting. If you see your buyer three times in a year, they will be seeing close to 100 new designs each time. I have seen so many manufacturers become irrelevant because they became complacent on this point. 

If you listen only to, and create only for, your most important client (they usually demand exclusivity), you forgot to maintain your own own line. That is the fastest way to shrink your client base. 

Building a good pricing program is paramount. Buyers will want to customize their order so they  ask for different metal types, different stone types and qualities. They may ask for a matt finish, plating or enameling. And when they do, you had best be prepared to make a quotation quickly or the interest may die. 

There are two keys to this issue. First you must choose a set of stone types and qualities. Then you only work within those parameters because you can stock materials confidently if you know you will be using more of the same for other clients. You will only work with specific metal types and provide a limited number of finishes. This also allows you narrow down the number of individual components which you need to build current prices. 

For example, you might offer 3 distinct qualities of diamond and two qualities of colored stone. You might offer 9K,14K and 18K with various colors and different plating options. That is the starting point. 

The second important issue is how each new design is described. Along with a picture and a style number comes the fundamentals about what the design can accommodate. This is your style sheet. It is formed into a database. How many and what size of stone are required to complete the design, and what is the finished weight are some of the simple issues. More important decisions such as the cost of setting and the cost of the finishing, for each individual style, must be made and recorded by someone who is involved in the management of the company. A detailed completed style sheet in a uniform manner should be the goal. A style sheet needs to be made for each new design. Style sheets are incorporated into a database. The database is important because, you will use the same base description to produce a particular design while your cost is going to change according to the buyers’ specs. Of course the price of metals change every day. 

After you have your database, it is all about mathematics to present a price to a potential client. Computers are the ideal solution – they are quick and accurate. Remember though – with regard your database – garbage in = garbage out. I have a great deal of experience in this area and have developed a flexible pricing program which is held in a macro enabled Excel workbook. If you are interested in further discussion on this point let me know.