Rising Metals Market...what's it all about?!

So Metals are on the rise again, big time. Let me explain how our metal pricing works. For this example I will use silver wire. When we purchase sterling silver wire, we buy it by the troy ounce (there are 1.09 troy ounces in an ounce, in case you were wondering). The trades market trades silver at a spot price. In the good ol' days, the spot price for silver hung out around $7. That is for raw silver. To buy silver round wire, there are fabrication charges added onto the spot price, and then we add our retail mark up. Back then, in the good ol' days (2004...not too long ago), you would find an ounce of Sterling round wire (footage varies per gauge), typically sold retail at about $18-$22 per ounce depending on the gauge (there is a higher fabrication cost on thinner wire). Today, the spot price is $19.21, over 3 times as much as it was through 2003 and early 2004.

To check the price and look at historical charts, I follow Kitco.com. Most companies follow the London Fix. Below is a chart from their site showing the growth from 2000-2008. Click here to see other historical charts. You can also take a look at the News and Reports page at Kitco for a more technical (and political) explanation of why the market is doing what it is doing.

This chart doesn't even reflect today at $19.21. It is predicted that it will break $20 by tomorrow or early next week. I have heard from 2 Silver traders that "they" (the metal gods I suppose) are predicting Silver will rise and stabilize at $28 per ounce. That is not for sure, just a prediction.

Here at Beaducation, and a lot of other companies, we have all our prices based on a $14 spot price. The market hung out at $14 per ounce for most of 2006 and 2007. That means that if one of our products weighs an ounce, we "should' up our prices quite a bit, since the spot has gone up over $4. Yikes, I don't want to do that!!! We have tried to keep our prices down, but the rise has continued and no one is predicting that it will stop.

So what does this mean to you, the consumer? Basically, you are going to see the retail and wholesale prices of most of your metal products go up, again. As we get in new shipments of products, you will see our prices increase. If you are reselling metals in your jewelry, you will need to up your prices as well. I have heard many designers say "copper is lookin' mighty pretty right about now". Maybe it is time to consider cheaper metals.

Most metal findings and products that you incorporate into your jewelry (ear wires, clasps, small amounts of wire, stamping blanks etc.) are quite light so you will only see their prices go up $.10-$2 depending on their weight.

Don't give up on Silver, Gold or Gold Filled yet. They are beautiful metals and so worth it. We just need to get used to higher prices and we need to start educating our customers to do the same.

Pricing your jewelry

I have gotten quite a few emails asking my opinion on how to price jewelry. I would like to turn you over to the thorough and wonderful Tammy Powley at about.com/Jewelry Making. She really breaks it down and points out many important things to remember when pricing your jewelry.
This breakdown will be different for each person. Are you selling wholesale or retail? What is your over head? Is this just a hobby and you are selling this to a friend or do you want to develop a thriving business from this? You gotta consider all this, read Tammy's article and take it from there. Good luck!