As silver prices raise, we all face the challenge of repackaging silver jewelry as an investment and luxury item. There are obvious difficulties in finding new markets but opportunities as well. Over the past few decades, the public became accustomed to sterling silver so cheap that it was sold alongside base metal as inexpensive costume jewelry. As prices began to rise, silver moved into upscale boutiques and Bridge Jewelry at department stores. Now, silver is making the leap into fine jewelry stores. It takes time for customers to adjust when relative values shift (witness the real estate market) but historically, silver was traditionally much closer in value to gold than we have been accustomed to and it looks as if we are headed back in that direction. The 600 year chart of silver values is fascinating. You could definitely make an historical argument for silver at $40-50/oz. On the bright side, when a material has high intrinsic value, people are willing to spend more on labor to embellish it. That means that quality products will thrive, while the low end dries up.
Here are a few marketing tips for the New Silver Reality:
1. Stress the investment value of silver, which most people have not internalized.
2. Market your jewelry as a collectors item.
3. Don’t be afraid to approach fine jewelry stores.
4. Vermeil style gold plated silver is booming as an alternative to solid gold, which has also experienced skyrocketing prices.
5. Invest in branding. A strong brand commands premium prices in any economy.
6. Cultivate individual collectors through Trunk Shows or Private Sales. Personal connection fosters customer loyalty.
At Nina Designs, we try to create products so gorgeous, they are irresistible. We hope our designs will help you endure these challenging times. Hang in there!
Dear Nina,
This is invaluable info (No pun intended). I have recently switched some of my designs from silver-plated items to sterling silver. I found that many times a quality bead(s) need to be accompanied with quality findings. While it is less expensive to use a silver plated ear wire, head pin, etc. I found it really wasn’t THAT much more for sterling! I use sterling as my selling point but I also use silver-plate too. EX: I note to customers that if an item is not going to be worn often than silver plate is the way to go because it not only saves money but you doesn’t tarnish as easily. And in all the same sentence I note the price and quality of silver, especially now. This will be very interesting and scary to watch. What I am uncertain of is how to price my jewelry in this volatile market. Should I price it according to what I PAID for it or according to it’s replaement value (meaning if I want to reorder the same item again and the price has increase, and will probably increase again)? Thanks again for the forecast. Kim
Comment by Kim — November 24, 2009 @ 4:41 pm
Hi Kim,
From a business point of view, the party line is that you should always use replacement cost pricing. As a practical matter, that does not always work out. I find that a compromise between replacement cost and average inventory cost is a good balance. This approach gives a measure of protection from both raising and falling supply prices, while keeping you close to competitors.
Comment by nina — December 4, 2009 @ 11:32 am