High metal prices are a challenge for everyone. With metal central to the value and pricing of the pieces you make, significant rises create pressure both inside your business and when facing customers.
In fifteen years of working with jewellers and designers, we’ve supported our customers through many shifts in precious metal prices. We know how unsettling it can feel when material costs rise, especially when you are trying to make quality pieces, protect your margins and keep your customers happy.
Volatile metal prices affect jewellers across the trade, and while every business will respond slightly differently, no one is alone in this. With clear communication, thoughtful design choices and a considered manufacturing process, you can protect your business.
Some reassurance: people are still purchasing jewellery
Jewellery is one of the most established consumer categories there is, and jewellery will always be a desirable purchase.
The World Gold Council reports that global jewellery demand by volume has fallen while overall jewellery spend increased. Customers may be buying less metal by weight, but many are still spending on gold jewellery.
We’re fortunate that our industry spans both life-event and lifestyle purchasing. People will continue to buy wedding and engagement rings, mark milestones and anniversaries, celebrate relationships and invest in meaningful pieces. Even when customers are more cautious with their budgets, jewellery still holds emotional value.
How can jewellers protect their margins when metal prices increase?
When metal prices first start to rise, the immediate temptation is to absorb the increase. While your margins should have room for some fluctuations, it can quickly become unsustainable.
Your first task is to ensure your pricing is based on current, accurate metal costs. You may need to shorten the validity period for customer quotes, and check metal prices more regularly before confirming a bespoke order. If you make your pieces to order or have a high turnover of stock, you may find yourself having to raise prices sooner rather than later.
You’ll probably start to notice other businesses doing the same, but it’s important to make decisions based on your individual circumstances. Some brands may still be selling older stock made or priced when metal was lower. Overheads, suppliers, stock levels and pricing structures vary between companies. Not every jeweller will raise prices by the same amount at the same time.
Remember that precious metal prices are set within a global market. Changes will eventually affect businesses throughout the supply chain; you’re not an outlier.
How should jewellers talk to customers about metal price rises?
Communication is one of the most useful tools you have. Your customers might not understand how much of a piece’s cost comes from the metal itself, or how quickly prices can move. They may have an idea of value based on older prices or previous experiences.
It’s important to explain the situation clearly without becoming defensive. You do not need to apologise for a global market issue, but you should acknowledge the impact it has. It is disappointing for anyone to find their budget no longer stretches to the piece they imagined.
Explain that precious metal prices have risen across the trade, and that this affects everyone making jewellery in gold, platinum, palladium or silver. From there, you can talk through their options.
A customer who has asked for an 18ct gold piece, for instance, may be open to considering 14ct or 9ct gold instead. You might also suggest a lighter-weight version of a design, a different chain style or propose how gemstones could replace metal content.
Be sure you’ve understood what your customer’s needs are, so you can openly discuss the specific benefits and drawbacks for all these options. Don’t assume knowledge — if a customer compares your gold vermeil with another brand’s gold plated prices, for instance, you have an opportunity for education. It goes without saying that honesty and openness are always key.
It may be possible to offer more creative solutions. For bespoke or remodelling work, allowing your customer to contribute existing metal, either for direct use in the piece or to reclaim to offset some of the cost. Offering upgrades or trade-ins may help support a loyal customer base.
If you have customer-facing team members, ensure everyone has the confidence and knowledge required to explain what has changed and why.
You may be the first person to explain the situation to someone, but you are unlikely to be the last. Even if they leave your store to look elsewhere, they’ll remember a supportive and collaborative conversation.
Protecting your margins without reducing quality
Once you’ve managed the immediate considerations, you can start to put in place medium to long-term changes that will help your business weather ongoing metal price volatility.
First, look at your products and designs. Metal weight is, of course, one of the biggest factors in the final cost of a piece, and it may be possible to reduce weight without compromising the aesthetic or quality of a design.
You might choose to design a specific range targeted to a lower metal weight. Classically, this might include pieces with negative space, such as fretwork or open shapes. You could also look at gemstone-led designs, which offer statement scale without extra metal weight. Current trends such as gemstone beads in place of chains or rock-crystal lockets are great examples of metal being replaced in an intentional, design-first way.
Some brands offer new ranges in a different material, such as silver. As long as this new category feels congruent with your brand signatures, it can be a great opportunity to allow existing customers to stay with you and even to attract new ones. Just be sure you’re not cannibalising sales from one category to another, such as offering a very similar design in gold vermeil that you also sell in solid gold.
You might also choose to review existing collections. Some pieces may be able to be refined, such as slimming down profiles or offering smaller sizes. Others may need to remain exactly as they are, and that’s okay. Not every piece can be made lighter, and the goal isn’t to undermine your quality. If you can’t adapt a piece, do you have a lighter alternative you could offer?
If you decide to make a material change to your range, ensure all decisions are aligned with your brand story and values. New and existing customers will accept well-explained changes, but not if they’re completely out of step with your brand. Avoid compromising values that fundamentally matter to your customer, such as using ethically sourced materials.
Keep your manufacturing process streamlined
At times like this, process really matters. Delays, errors and extraneous admin all contribute to costs, which is especially painful when margins are already squeezed. By keeping your production processes running smoothly, you can manage time, costs and your own peace of mind.
This might include:
- checking models carefully (or asking for advice) to avoid casting failures
- providing renders or printed prototypes for customer sign off, to avoid repetitive sampling
- reducing design variations to help manageability and allow batching
- simplifying manufacturing, such as choosing one-part castings over two
- centering quality control at all stages, to avoid metal waste
At JewelCast, we work with jewellery makers, designers and retailers to help bring designs to life. From CAD design and 3D printing to moulding and precious metal casting, we’re set up to make the whole manufacturing process easier to manage.
That support becomes especially valuable when costs are high. We’ll help assess designs before casting, keep production streamlined and support quality control from one stage to the next. And the JewelCast team are always here to talk through your ideas. If rising metal costs are making you rethink a design, collection or production process, we can help you find a route forward.
Rising metal prices can be difficult for everyone to navigate, but they do not have to push you into panic decisions. With open conversations, thoughtful design choices and the right support, you can continue to create pieces you’re proud of and build customer relationships that last.
Want to talk anything through? Contact our helpful team today.