People are always curious about how jewelry companies price their pieces - how can that tiny little piece be worth $3000? I was one of those skeptical people until I founded Common Era, and learned so very much about all the various factors come together to help us price our pieces fairly.
Industry standard markups are between 6 - 15x the production price (e.g. one jewelry brand I wont name, who sells simple vermeil chains for $450 that we could source for around $25 🤯) , 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 and affordability.
Our pieces are marked up between 2 - 3.5x the production costs because those costs are 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 Vermeil vs Gold Plate
Almost all jewelry that you can buy in the $100 - $500 price range is flash-plated plated brass or bronze. Our jewelry in this price range is 18k gold vermeil. The difference is twofold:
- Our core material for vermeil 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. Our vermeil also includes a layer of platinum between the silver and gold to help protect the silver from tarnishing. This adds a huge amount of cost and complexity to our process.
Another beauty of vermeil is that it means your entire piece is composed of precious metals (i.e. gold and silver) only.
Solid Gold Costs
Solid gold is expensive, and it historically only becomes more expensive each year. When I first went to jewelry school, my teacher told me she remembered when gold was $400 per oz. - it's now $1,800 per oz. When jewelers buy gold, we don't get it at the 'spot price' - that's the price that you see when you google the price of gold as a commodity. We have to go and physically purchase it from a vendor that needs to make a profit. Buying recycled gold also costs a lot more than buying fresh gold, so that also factors into our costs.
The beauty of solid gold, however, is that it lasts forever. It can be passed down through generations, it can be melted down and re-cast into a new piece - it truly is an investment.
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 significantly less to go to China and have our pieces made in a mass-manufacturing plant with sub-standard conditions and suspect sourcing methods. Ethical production costs more because the workshop adheres to much higher standards in the areas of responsible supply chain management, working conditions, health and safety, two weeks paid holiday leave, and state-of-the-art equipment. Our workshop is also certified by the Responsible Jewelry Council - the hardest certification to get in the jewelry industry.
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 eight times as much.
Design and weight
Our goddess 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 a third of the size and weight, which slashes their material costs. Simple.
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 and Hecate pendants cost more than all the others - there are many 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
Yes, we have a charitable mission and donate 3% of profits to the AWI, but we are also a small business trying to survive in an environment that favors corporations.
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. Recycled gold actually costs more than newly mined 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; I need to pay New York City rent and health insurance!
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.