[Jewelry making - Article 00444] - Re: [Orchid] Pricing silver jewelry in today's rising market

[Ron Pratt]

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Catherine:

    You have a couple of solutions:  First, you can set your prices in
    tiers, the first will cover the market up to a certain market, say
    $7.00 Silver. The next tier could cover up to $8.00 and so forth
    setting up different price levels. And, naturally you would price
    your product at the highest level in that tier.  That way, the market
    could vary from say $6.00 to seven and you would be priced at seven
    and would have eliminated any exposure to the market.  Should the
    market go above seven dollars you would price using the next tier and
    so on.  This is a very reasonable method for you and the customer. 

    The next way would be to change price every day by calculating metal
    value increments to cover the daily fluctuation of the metal market. 
    Bill on the day after shipment and buy enough metal to replace the
    amount of metal sold the day before. This technique would allow you
    to maintain your metal inventory without exposure to the market. You
    wouldn't make any money speculating on the market using this
    approach. But , you would be safe from exposure and allowed to make
    normal profit margins.  But, you claim the buyer would not be
    receptive to this method. 

    A third method would be to purchase enough metal to cover all your
    orders, calculate the price at that market and fix the sell price. 
    Often when a buyer wants to fix price in the precious metal market 
    he would pay for the raw silver in advance to secure his price
    position. For a supplier to guarantee the price of finished goods in
    a volatile rising market is a very risky policy. 

    Try fixing the price of future silver shipments with one of your
    suppliers! Sorry!  Business should be a two way street, everyone has
    to  work together in situations like this.  We make findings and our
    computers are set up to change our prices every day.  And, the metal
    we sell today is replaced tomorrow. 

Good luck,
Ron


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