Have you ever wondered why jewelry is so expensive? Well, we have. Spoiler alert: it's why we do what we do, and why we decided to offer fine jewelry that is accessibly priced. Because unfortunately, the price of jewelry sometimes has very little to do with its actual value.
Value- vs. cost-based pricing
You may or may not be familiar with the different strategies companies use to price their products, and we certainly don't want to bore you with business 101. But we think some pricing basics might be helpful to understand how jewelry is traditionally priced, and how we do things differently.
There are many different pricing strategies out there, but the two most relevant strategies are:
Value-based pricing: which sets prices at the perceived value a product or service has to the consumer
Cost-based pricing: which sets prices based on the cost to produce a product or service, and adds a fixed mark-up
Traditional Fine Jewelry
Traditionally, the jewelry industry follows a very simple value-based pricing model. Companies price their jewelry based on the value their customers perceive it to have.
Because of this, jewelry is sometimes marked up by up to 1000%, so an item that costs €40 to produce is sometimes sold for €440! Basically, the price you are paying for your jewelry has little or nothing to do with the quality you are getting, the actual cost of the material, or the cost of producing the pieces. Unfortunately, even fashion jewelry brands sometimes charge huge mark-ups for their products, even if the metals they use are very inexpensive and low quality.
On top of that, many jewelry brands have very long supply chains. They often need to pay design licenses, manufacturing costs, wholesalers and distributors, expensive retail stores in the best locations, store personnel, and so on. Although this increases their costs, it has nothing to do with the value of the product.
Our pricing at Oriad
At Oriad, we want to make fine jewelry accessible. Instead of buying (sometimes overpriced) fashion jewelry that will only last one season, we want you to be able to afford fine jewelry that will last you a lifetime. That's why we follow a strict cost-based pricing model: we look at the costs to produce your jewelry (material, labour, transportation and packaging), add a small and fair mark-up to pay our bills and continue to grow our business, and then sell directly to you to avoid any unnecessary costs.
This way, you get the same (or even better) quality as you do at other jewelry brands, but at a fraction of the cost.