How the Price of Silver Affects Silver Jewelry Prices

The cost of raw silver has recently rocketed from $15-$20/oz throughout most of 2010 to $26-$29/oz in the past few weeks. You have probably noticed that all silver jewelry wholesalers, including Teeda.com, have had to adjust prices accordingly. For any wholesaler whose merchandise is made with genuine sterling silver, there is no avoiding the effects of the silver market- we have to purchase raw silver when we start a new production batch (we start several batches every month), and the price of that raw silver is always based on the market closing price.

Several years ago when silver was trading at roughly $5.00/oz, raw silver was a large component of the cost of goods, but many other inputs contributed significantly to the final cost as well. These included labor, stones, plating, packaging, customs duties, and transport. Yesterday, silver closed at over $27/oz, more than 5x its price from several years ago. Other input costs have gone up as well, but their prices have not risen nearly as quickly as the price of silver. This means that silver now commands an outsized portion of our total production costs. Consequently, our costs are now very sensitive to the price of silver. Moreover, the price of silver has also recently become more volatile, with big swings occurring over short spans of time, sometimes in the same day.

So, how does this affect our customers? Different vendors have different policies when it comes to setting prices in the face of the rising and rapidly fluctuating price of silver. At Teeda.com, we are committed to helping our customers’ retail jewelry businesses succeed. We try our best to not raise prices too rapidly when the silver price goes up, and we try to reduce prices pretty quickly when the silver price goes down. We consider this to be good business: Price stability makes it easier for our customers to run their businesses profitably, and earning our customers’ trust and loyalty always pays off in the long term.