How We Price Our Ethical Jewelry
People are always curious about how jewelry companies price their pieces - how can that tiny little piece be worth $800? I was one of those skeptical people until I founded Common Era, and learned so very much about all the various factors - such as highly volatile metal prices or simply having paid vacation time for all studio staff - come together to help us decide the retail price of our pieces.
Industry standard markups are between 6 - 15x the production price, and while we would dearly love to be making that sort of margin so we could invest back into the business, we have chosen to sacrifice profits for ethics.
Our pieces are marked up between 2 - 3.5x the production costs because those costs are so high, but we want to be affordable and fairly priced compared to the rest of the market. I.e. we don't pass that cost on to you: we incur the cost ourselves and take a hit on our profitability.
I wanted to take some time today to go through exactly what makes our pieces so special, and why they cost us so much to produce:
Gold and silver costs
Almost all coin jewelry that you can buy in the $100 - $500 price range is gold-plated brass or bronze. Our jewelry is all solid sterling silver or 18k gold vermeil. The difference is twofold:
- Our core material is solid sterling silver rather than cheap brass. The price of silver is currently up 47% since the beginning of the year.
- We use gold vermeil, NOT gold-plate. This is a legally different definition as it must be at least 2.5 microns thick, which is roughly 3x thicker than gold plate.
Another beauty of vermeil is that it means your entire piece is composed of precious metals (i.e. gold and silver) only.
Sustainability and ethics
This is a pretty simple one: recycled metals actually cost more than newly mined ones, at least 15% and sometimes 20% more.
Manufacturing in an ethical atelier
It would cost us way less to go to China and have our pieces made in a sweatshop. Ethical manufacturing costs more because the studio takes care of their workers and offers healthcare, paid time off and state-of-the-art equipment.
Almost every single jewelry box you open is purchased from AliBaba. They cost around 50 cents and are made in China. Our packaging is made by a small family-owned business in Chicago and costs us 8x as much.
Design and weight
Our coin pendants are weighty little things, weighing around 15 grams. Each time I’ve seen someone pick one up, they have exclaimed immediately upon the weight. Most coin pendants on the market are about half and size and weight, which halves their material costs. Simple. We also have a dual-finish design which requires hand polishing.
By including gemstones in our pendants, we increased our production costs by a significant amount. Not only do we have to pay for the stones themselves, we have to pay a lot more in labor costs so that someone can hand-set each stone. This is the reason the Medusa pendant costs more than all the others - there are seven stones to set. It takes time and precision.
Small batch production
Most of the bigger companies do so much volume in sales that they can order thousands at a time from their manufacturers, resulting in great bulk discounts. We only make about 50 pieces of each style at a time, because we can't drop $100,000 on inventory all at once. This means we unfortunately don't get to reap the those bulk discount rewards.
We’re a business
Often when I explain just how much things cost us to make, I get a retort like “gold is at xxx an ounce, so why does your jewelry cost xx”. The answer is that when we buy materials we don’t get them at the spot gold or silver price. We buy them through a supply chain that marks it up along the way, because those vendors need to make a profit too.
We also pay for things like customs, taxes, labor, packaging, inventory storage, fulfillment services, shipping, insurance, office leases, software, domain hosting, photoshoots, lawyers, studio time and advertising. After all of that, there’s really not a lot left over. A business is a business and we need to make a profit. There would be no point in selling jewelry at cost price.
We priced our jewelry competitively and in line with the rest of the market after doing a lot of research. We tend to be right in the middle of the price range for similar pieces, though our ethical practices and commitment to quality mean we make a much leaner margin than most other jewelry companies.
We believe emphatically that small, ethical businesses can change the industry and force bigger companies to shift their business models. I hope you will join us.