Effective ways of choosing the right jewelry markup: how to increase your brand’s power and sustainability

Selling silver jewelry wholesale can be a great business model. However, it’s important to ensure that you have the right markup, as that will automatically determine how your brand is perceived, but also how strong your brand is when compared to your competition. 925SilverJewelry.com is a powerful, well-known, and reliable global supplier here to assist jewelry retailers as they determine the difference between retail and wholesale pricing. 

As a business, it can be difficult to identify the right jewelry markup. You don’t want to overprice, as that will lead to you losing customers to the competition. However, if you underprice your jewelry, that hurts the brand’s image. Based on insights acquired from 925SilverJewelry.com, this article outlines key factors every jewelry retailer needs to consider when setting their markup. 

Understanding Wholesale vs Retail Pricing

The Basic Markup Formula

Wholesale jewelry pricing is different from retail pricing due to a very specific reason. Wholesale refers to the amount paid to the manufacturer/supplier, whereas retail pricing entails how much the final customer pays for the jewelry item. Naturally, there’s an innate difference between a wholesale and retail pricing strategy. 

Retail prices are always higher when compared to the wholesale price of the same item. That’s because you have to take into account the jewelry markup. The markup covers any costs related to handling, selling the item, and profit margins, all of which the end customer will cover. Here you can see the basic formula when calculating the retail price. 

Retail Price = Wholesale Price + (Wholesale Price × Markup %)

This formula shows an effective retail pricing strategy. You need to identify the markup percentage you want, and then you use the formula to identify your final, retail price. For example, a $10 pair of earrings with a 200% markup will have a $30 retail price. According to wholesale data from 925SilverJewelry.com, depending on the jewelry type, you can have different markup ranges. 

Calculating the True Cost

Now that we know how to calculate retail pricing based on the jewelry markup, we should narrow down an effective way of calculating the true cost. Your markup should always cover more than the invoice price. That’s because there are always hidden costs, such as:

• Labor
• Import duties
• Packaging
• Shipping

All of these hidden costs add up, and your retail customers don’t want to pay extra on top of the retail price. That means all the extra costs need to be a part of your markup. That’s why you want to use wholesalers like 925SilverJewelry.com is a great option. When you buy in a larger volume, that helps improve your markup while lowering the cost per unit. If you’re a small retailer, you tend to rely on higher markups to stay profitable. However, larger orders offer more flexibility, since you can have more competitive retail pricing. 

Trend, Season, and Value Factors 

In the retail world, seasons and trends will influence purchase decisions. For example, there’s a higher demand for jewelry during Christmas or Valentine’s Day when compared to the rest of the year. Also, as a retailer, it helps if you align yourself with current trends, be it bohemian, celestial, or minimalist jewelry. That can help increase sales, while also boosting the perceived value of your brand.

Another thing to consider is emotional appeal, which can justify any price increases for the short term. You can also increase prices if you have limited designs sold for a very short amount of time. That’s why you want to work with wholesale companies such as 925SilverJewelry.com that continually update their collection to cover the latest trends, while maintaining competitive pricing. 

As you build a sustainable retail pricing strategy, you should always consider the following:

• Track your costs and include them in your jewelry markup, while also maintaining a competitive edge for your brand.
• Assess and benchmark your competitor’s pricing, then create a unique selling proposition to stand out. That can be anything from sustainable jewelry to handmade designs or limited-time editions. 
• Understand what your target customer focuses on when buying jewelry. A lot of the time, people think about the perceived worth of a jewelry piece, but also the emotional attachment they have to a design. 
• Focus on having a sustainable markup that’s competitive. Price your jewelry products fairly and focus less on the short-term profit. Instead, try to establish a relationship with the customer, thus bringing a true focus on customer retention. 

Conclusion 

An effective markup needs to take into account market timing, the brand’s strategy, but also cost awareness. As a retailer, it’s very important to check prices regularly, assess your material cost change, trends, and other factors that could influence your markup. Focus on growing your business, but also pay respect to your clients with a competitive markup that puts you as the first choice in their minds. The article was prepared with insights from 925SilverJewelry.com, so if you want to explore more about wholesale-to-retail pricing, learn more about wholesale-to-retail pricing here.