[Jewelry making - Article 00010] - Re: [Orchid] Dealing with the increase in metal prices...

[Peter W . Rowe]

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    I'd suggest raising the prices on your existing inventory too. If
    you don't, then you risk selling those items for less than it will
    cost to replace them with new merchandise. The idea is to sell them
    not only to generate a profit margin based on their own costs to
    make, but also taking into account what it will cost to make their
    replacements. And it wouldn't do to be selling a ring you made a
    while ago, for less than it's current scrap value if the prices of
    the materials have risen enough to overtake your original retail
    price... 

    the exceptions to this rule you may have to consider is for those
    cases where raising the prices to match current replacement costs
    might result in your simply not selling the things at all. In that
    case, find some middle ground, with the understanding that you
    probably won't be replaceing these items with new similar ones, as
    they too would not sell at current pricing levels. If this is the
    case with too much of your inventory, then you'll need to alter
    either the way you market your work, in order to find a clientelle
    more willing to pay the current prices, or you'll need to alter your
    designs to fit the current market climate, making things with less
    metal so you can still sell them for a profit. it may take a
    combination of both of these to fully adapt. 

    This question, by the way, is not at all unique to your own
    situation of selling from your home workshop. It's the same situation
    every retailer is also facing, and always has faced, when our costs,
    be they metals cost, gems cost, rent, labor, or health insurance
    costs, change the costs of doing business. 

    You might take a clue from the metals suppliers themselves, who's
    prices fluctuate according to the daily market. So do the prices at
    places like Stuller, who sell gold items, but they may not adjust the
    price per item on all items, quite as frequently are with the same
    sensitivity to every last penny's change in a metal price. And
    retailers can't be retagging all their inventory every day. But many
    will adjust their pricing to match the market if the market shifts far
    enough. 

HTH
Peter
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