Monday, May 19, 2008

What is Jewelry?

Jewelry is a precious accessory in which you can use to express your beauty and wealth. Wikipedia calls jewelry "a personal ornament, such as a necklace, ring, or bracelet, made from gemstones, precious metals or other materials."[1] When people wear jewelry, other people often wonder if it is real or fake because they then will guess the worth of your accessory. So would spending a lump sum of money necessarily mean that it was worth it?

What causes the markup in jewelery?

Jewelry is marked up so much because not many consumers pay attention to how much gold really is. Today one once of gold went for $896.82 U.S dollars. The price of gold is controlled by the currency of the hegemonic state. If you consider how much gold is and how much your jewelry weighed, would it come anywhere close to how much you paid? Jewelers also weigh their gold in what they call a troy ounce which is different from the imperial ounce. One imperial once would be equivalent to 28 imperial grams which often confuses consumers because jewelers work in troy ounces. If you did the math the difference would be 2.8 grams. Also, if the jewelers marked up their prices so high, it would make their items seem valuable because not everybody would be able to afford it. And with such high markups, they can chop down their prices to make it seem as though you are getting a good deal and that they are helping you out.

How much is the average markup?

When you think about how much you have spent on your jewelry, have you thought about how much it was really worth? The average retail markup is 100% and higher. [2] Sometimes the mark up could go up to 1000% but the standard markup on a diamond is 300%. [3] Pinkfrued-ga says that "the estimates on markups are broad and rather vague, but most of the reliable sources I've seen indicate that 300% is not an unusual markup." [4] Lets say that you bought a ring that weighed 15 grams and did the math of how much the gold cost, it would be $13,452.30. But if we add a little bit of labour for the jeweler, lets say it was $15,000.00 altogether to make the ring. If you mark it up 100% it would be close to $27,000.00. The jeweler would make an insane profit! But that was just gold! If we added a diamond to it and added a 300% markup the price would sky rocket.