Soaring gold prices have left many jewelers confused. Abe Sherman’s here to clear things up.
WHAT SHOULD I DO about my gold? We’ve been getting a lot of gold questions lately ? no surprise there.
Should I melt my old stock? Should I mark up my existing stock? Should I keep reordering? What do I do with my program merchandise? What should I buy for my gold department? Here are a few answers:
Pricing. First of all, your inventory is worth what it’s worth. Gold is likely up quite a bit over when you bought it, so yes, you have to go through the arduous task of re-pricing your inventory. Especially if you’re planning on reordering the product.
I vaguely remember having to re-price all of our inventory back in 1979-1980, before you could run new tags on your laser tag printer. One of the things we didn’t retag was our carved wedding bands. We had a 3?x5? card with the millimeter dimensions and retail prices, which we changed with every $50 change in the gold price. (Lately, that means every week or so!) At least that small portion of your business won’t drive you nuts.
Would it be an impossible thing to do the same with your gold chain department? Maybe it would work better for you to have a ?labor? charge for the various pieces of merchandise and a per/gram price for 14K. Each tag would be color-coded with that price per gram above the base price of 14K.
Pain in the butt? Yep. But so is re-pricing 250 SKU’s every couple of weeks. It really depends on how many SKU’s you carry.
Melt it? Sure, why not. Especially if you have a lot of aged inventory. Heck, you’ll make more on stuff that’s been sitting there for four or five years when you scrap it. But when?
I don’t think this ride is nearly over. There’s too much stress on the dollar, inflation fears, Iran, Iraq and a large national debt. So start pricing your goods higher ? higher even than the current price, which is now down from the high of $730 per ounce it reached in May.
As an aside, this may be a very good time to be buying gold and platinum off of the street. It’s been 25 years since the last gold rush and this may be a very good market for you. Speaking of platinum, if you have a bunch of merchandise in stock in the metal, start weighing it to see how you’d come out if you scrapped it. If you’ve owned some of the bridal lines for more than a couple of years, the prices have doubled, and it’s 90% pure platinum! At over $1,130/oz, that’s going to add up.
With the price of gas these days, getting rid of an old high school ring may keep the old car running for a couple of weeks. Gold goes up. Diamonds go up. Gas goes up. Your inventory is just going to have to go up as well. That said, you should still be merchandising your store to hit the key price points that have been selling in the gold department. The customer will get something lighter, but if they’ve got $200 to spend, they’re not going to spend $500, regardless of what the price of gold does.