Gold is one commodity whose demand and value is almost, if not always, stable. Enclosed in glass boxes, gold jewellery is displayed in jewellery stores, lustrous and inviting. Unlike other commodities that you see in grocery stores, though, price markup on jewellery is particularly high. There are a few reasons behind this jewellery price markup that you should be aware of.
Gold jewellery is not like other commodities, such as milk, soap or sugar. It is not every day that a person buys gold necklaces, rings, bracelets, earrings, or any other piece of jewellery. This means that jewellery stores do not make as many sales as grocery stores do. As a result, jewellery store owners set higher markups on their products to compensate for that difference.
Gold jewellery is not just a lump of gold, to produce a decent-looking engagement ring, there is fine workmanship involved. It has to be designed, moulded and polished. For some pieces of jewellery, stones have to be set. Finished piece of jewellery can be considered a work of art and jewellery buyers pay extra for goldsmith labour as well. Jewellery is not mass produced, hence, much more time is needed to create a finished piece of jewellery. Besides labour costs, owners of jewellery stores have to consider the expenses for shipping, quality control, staff and other bills that come with owning a store. Of course, the owners have to earn a good amount of profit for every piece of jewellery that they sell.
On the other hand, those who want to sell gold should understand that their gold is not going to be priced the same as new jewellery sold in stores. Selling gold is still a great way to convert old jewellery into cash – no matter what, gold jewellery will always have it’s gold commodity value. Once sold, the jewellery is melted together with any other gold scrap, to be recycled as brand new jewellery items.
We’ve established that gold jewellery is overpriced in many jewellery stores, yet people will still shop at jewellery stores. There is something to be said about picking out a new, unworn jewellery piece, or better yet, having it designed and made exclusively for you. That “brand new” feeling comes at a price – keep that it mind when selling gold. Be aware that you can buy gold without paying a premium markup – gold hunting at local garage sales and liquidation auctions.