By Suzy Landa, Suzy Landa Jewelry
After 20 years as the designer at Suzy Landa Jewelry, it’s safe to say that I have never seen gold prices jump so dramatically in such a short time. From day to day and week to week, the increases are astounding! On Thursday last week, gold closed at $2,777 per ounce; the closing price on the same day one year earlier, in 2023, was $1,996: That’s a 39% increase in 12 months! The current market presents not just a challenge for me and my retailer partners to keep up with pricing ourselves, but also a collective responsibility to educate consumers enough to help mitigate sticker shock. The higher the ticket price, the more important the retail salesperson’s savvy must be—specifically, a better understanding of the products so that he/she is able to persuasively present the pieces’ special features and value.
In practical terms, how often can designers/manufacturers deliver updated pricing for stores, and how often should we expect stores to change price tags in order to remain current? What happens, for example, when a customer walks into a shop and wants a particular piece in rose gold after seeing it in yellow gold in the showcase? Does the store risk losing the sale because they’d prefer to contact the designer to get a current cost first, before stating the price aloud? How long has that yellow gold piece been in inventory, and what was the gold price at that time? Is it best for the salesperson to explain the potentially huge price difference to the customer and hope that the customer accepts the circumstances rather than suspecting price gouging? Or does the shopper conclude that gold is just way too high—surely a bubble on the verge of bursting—and therefore forgo the purchase in the hopes that the price will come down later? Or does the retailer choose to say nothing about a large price change and instead eat the difference in price to keep the client happy? Selling fine jewelry in a wildly elevated gold market makes many of us unsure of how to navigate this landscape.
The reality is that some store associates, in their eagerness to make a sale, are simply taking wild guesses at prices or using old gold prices even when ordering larger sizes of a ring—say, from a stock 6.5 to a 10. There’s an enormous disparity of hard costs there, and more likely than not, a store may not be willing to go back to the customer later to say, “Oh, we made a mistake and misquoted the price.” How many retail sales are lost because the retailer doesn’t want to take such a big hit on the margin?
Many of us designers and manufacturers used to reprice items once a year. Those days are over. Many are updating pricing quite often—more like every three months. Yet how often are stores updating pricing of their current inventory? Are retailers using this crazy market as a teaching opportunity to train staff to better sell the value of gold to their customers? Sure, gold is a commodity with genuine market fluctuations, yet we in the business of selling fine jewelry make a habit of selling beauty, art-to-wear, and symbols of memorable occasions. We hope to elicit an emotional connection between a client and a piece she loves so that she “needs” it. We’re not selling a commodity, we’re selling happiness!
I am grateful these days that a large percentage of what I create is one-of-a-kind pieces, priced at the time of production. I never reprice those items even when gold becomes significantly higher than when I made them. I don’t need to be greedy. However, with the production pieces of my collection, I just don’t know how to keep up. I don’t want to elevate the prices enough to have a buffer or protective margin, because prices are high enough as they are. My collection is made in New York City, and each piece is made one at a time. With the current high cost of gold, I must be more careful with my decisions about what to make, and I won’t take as many risks with new designs as I might if production costs were lower.
As a small-business owner, I constantly look for ways to attract new clients, whether it’s a jewelry lover buying her first Suzy Landa piece, or a retailer buying a first collection with which to represent my work in his/her store. I try to maintain a wide range of price points and enough items that make for an easier point of entry for a retailer to get into business with me. High gold prices have significantly changed retailers’ willingness to bring in a new designer vendor, and unfortunately, high prices challenge the average consumer’s ability to make a spontaneous purchase. If a manufacturer is working in 18K gold and natural gemstones and fabricating the jewelry in the U.S., how many interesting items can really be made that will have easy, bread-and-butter price tags? The current gold market basically guarantees that we’ve knocked out a huge amount of goods under $1,500 retail; those items scarcely exist. Those that remain seem awfully insignificant.
I am genuinely appreciative of my wealthier clients for whom gold market changes don’t affect their passionate purchasing. Retailers report that their overall success this year comes from fewer buyers but significantly bigger average transactions. At the same time, the medium-range, aspirational customer, for whom the purchase is a careful, considered, special one that she long saved for, is being knocked out of the market. She just can’t justify the purchase. That makes me sad.
Current projections estimate that gold will exceed $3,000 per ounce by the end of the year. What will that mean for the 2024 holiday season? Frankly, I’m not sure what to expect.
I’m just starting to hear from stores that they are encountering a bit of price resistance. Customers are telling them that prices are high. Though consumers may have noticed gold market stories in the news, they surely don’t follow the consequences of gold’s record highs. Is it our job to explain that countries like Russia and China have pulled away from investing in hard currencies (like the dollar) to pursue gold instead? And that the gold market often rises amidst so much global unrest? We have to figure out how best to educate store sales associates so that they are comfortable making these pricier gold sales.
To me, the market has never felt so precarious. How are others handling it? I’d love to hear from stores or design peers. My email address is [email protected].
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