Friday, February 8, 2019

5 Step Guide to Strike a Bargain When Buying Jewellery

Save Money on Engagement Rings and Wedding Rings

Haggling has a bad name, but if you have the right knowledge, it can save you a lot of money. This breakdown aims to show you that shops are willing to negotiate on price—if you ask them.

This post will tell you just how to haggle your way into a brilliant bargain, whether you’re buying that special engagement ring or a wedding ring, or simply looking for some glamour for your everyday life. You'll get an exclusive look at the normal breakdown of jewellery costs with an example supplied by experts in the field, and hear some invaluable tips on how to save money when buying jewellery.

As a real life example, we’re breaking down the costs and prices of ‘Solitaire Brilliant Cut 0.50 Carat Diamond Ring Set In 18 Carat White Gold’ from most popular high street shop Goldsmiths, usual price £3,000.

Breakdown of prices

Raw Material costs

This is the baseline cost if you add up the price of all the separate components. In plain terms, it's what the materials that go into making the jewellery cost on their own. Usually, this makes up anywhere between 10% to 25% of the total price of the finished piece.

For this ring
  • Cost of diamond (I1-I2 quality): £400 - £500
  • Gold (4 grams at usual market prices): £130 - £150

Labour costs

This is the money that goes towards the actual making of the jewellery - what you're paying someone to devote however many hours to making the piece. This factors in all the time, effort and skill that goes into making any piece of jewellery. Like raw material costs, this is usually between 5% to 20% of the final price.

For this ring:
  • Cost of labour between £100 - £200


Commission is what the shop will charge for displaying and selling a piece of jewellery. This is the part that will go to the specific retailer, so they can get a profit from the item, rather than going towards the making of the jewellery or the person who made it. Very often, commission is more than the cost of raw materials and labour combined. It usually takes up at least half of the price, if not more.

For this ring:
  • Commission: £1,550 - £1,870


VAT (Value Added Tax) is legal requirement, which means it cannot be altered by the retailer. VAT is currently 20% of the final selling price, which means 1/6 of what you end up paying is VAT. 

For this ring:
  • VAT: £500


VAT is 1/5 on top of total price of materials + labour + commission. So,
in short, the more money they charge for commission, the higher the VAT, and the more YOU have to pay.

Haggling Tips and Tricks

By the time the finished item is in front of you, the material and labour costs are already fixed and unalterable. But you’re still paying three to five times what the item actually costs! So, how do you reduce that amount?

Jewellery shop on the high street can’t negotiate on the material and labour costs or VAT, so anything they knock off the price comes out of their own commission. But as you can see, they get a lot of commission, and there's plenty of room in there to negotiate your own deal. 

In the case of the ring we're using as our example, even when it's on sale at 1/3 off, the retailer is still left with a tidy profit of £500 - £800... and you still have enough left over for a comfortable honeymoon fund. But true love doesn't wait for annual sales, and sometimes it's good to be able to drive down the price on your own terms. To help you, here are five top tips for haggling when buying jewellery:

1. Know what you’re talking about

High street jewellery retailers will often try to trick you into paying more than the item is actually worth. But with the information we’ve given you, you’ll be able to meet them armed with all the facts and figures necessary to get you the best ring at the best possible price. Use facts, figures and statistics to let them know that they can’t get away with overcharging you—they'll soon be ready to compromise!

2. Compare retailers

For retailers, any sale is better than no sale. Often, items in high street jewellery shops won’t be exclusive, so if you let them know you’ve seen the same or similar item somewhere else for cheaper, they’ll often be willing to slice a bit off their price. Some shops have a special price-match guarantee, but that doesn't mean you can't use this method in other places too—it's a great way to start off your haggling, and it shows them that you mean business.

3. Talk to the makers

One step better than comparing prices at different retailers is going back to the source itself. If you can deal directly with the actual jewellery creators instead of going through a high street retailer, you'll save a lot of money on commission. Of course, this isn't always possible—but even talking to someone in the field will give you a good idea of what sort of prices you're dealing with when you haggle with the retailer.

4. Do your research

Trends change quickly, so jewellers won’t want to keep pieces hanging around. They will likely be more willing to discount items they’ve had in stock for a while, or that aren’t quite in line with the most popular trend of the day. Take the time to check out what’s currently popular, and don’t rush into sales—slow and steady wins the race!

5. Sound Confident

All of the above tips work best when used with confidence. Remember: be calm, be confident, and have faith in yourself. No matter where you are or what you're buying, retailers will soon see that they can’t cheat you out of a deal!

So, those are our premium haggling tips! Make sure to tell us if you’ve tried them, and if they worked for you—and of course, if there are any we’ve missed!

Also, to help you with all the above steps, House of Silver has a Free Jewellery Valuation Service. All you need to do is email them with a link to or picture of your item and they'll give you a calculated estimate of costs, so you can work out just how much of what you are being charged is just commission.

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