Trade Secrets : How We Price Engagement Rings?


How we price engagement rings, clearly explained.

Have you ever wondered how we price engagement rings? How do many jewellery companies arrive at the price of an engagement ring? Why an almost-identical ring has a very different price? There are so many rings, so many prices varying massively from online to the High Street. We have provided some details to explain how we arrive at the price of a ring.

The Easy Sell

For some retailers, typically High Street chains, a complete ring has a total cost to the retailer. Retailers add their margin and the ring goes on sale to the end client. Basic retail selling. The margin could be 50% or then again it could be 500%. An item (usually off the shelf) is already made, therefore the cost is already known. A profit-margin can be added with the certainty that the price of an engagement ring will not change. Happy days! Even happier if a retailer’s margin is extravagant! This margin varies greatly from one company to another and will remain undisclosed.

We ourselves have many made-up items on offer, but many appear when new designs launch and then sold very close to cost (your way of stealing a one-time bargain.)

Making to Order

Across most of our engagement ring designs, we offer countless options for any given ring. Designs with limited options are typically available with further choice upon contact with us. The problem here lies in the cost of the parts of a ring.

Parts of the Ring – A Breakdown of Cost

1. The Main Diamond

Regardless of whether certified or not, a single diamond ring, or a ring featuring a larger diamond surrounded by smaller diamonds, the main diamond will have a cost price. The cost price of this diamond changes constantly. Prices fluctuate according to market price (based on supply and availability, rarity etc.) and by the exchange rate (diamonds sell in $US and subject to fluctuations based on the exchange rate.)

2. Any Outer Diamonds

We also build in the cost of any outer diamonds like smaller mêlée diamonds seen in clusters and multi-stone rings. Again, these are subject to cost fluctuations – market prices and exchange rates.

3. The Cost of Metal

Most people are fully aware that the cost of all precious metals goes up and down. This greatly affects the cost and price of an engagement ring. Availability, rarity, the cost of extraction and the World economy all affect the cost of metal. All of our ring mounts, irrespective of diamond size, and finger size vary in weight. Metal weight also varies depending on metal choice. Look at the variation in metal weights between different precious metals on our metal weight comparison chart. Each and every metal, choice of stone size, and finger size play a part in the weight of the ring.

4. Fashion Price

When you buy a ring, leaving aside the diamond, for now, you are not just buying metal. Styling and design play a strong part. There is a cost involved with this. This difference is fairly significant and noted in our previous article on the 5 values of a diamond ring.

5. Labour

From the very start to the end of the process, creating a diamond ring is a human process involving many hours of hard work. This is an important element deciding how we price engagement rings. This work calls upon a unique skill set and generations of experience across casting, mounting, setting and finishing to name just four separate processes of ring manufacture. There is no machine that spits out rings. They are the product of hard work, refined skill and attention to detail. Each person in the process, from the mounter, through to the setter and to the finisher demand a certain price for their work which needs consideration in the cost of the ring.

Further Considerations

Further considerations include the cost of packaging and sending an item, the insurance delivery all of which need consideration.

Whether you are considering buying an engagement ring, or just interested in how we arrive at the price of a ring, hopefully, the above information will go some way to explaining the factors we have to consider on a constant basis so that we can price rings accurately. Our system for doing this keeps prices up-to-date constantly. Many retailers price jewellery periodically, but when market prices fall, the end client rarely benefits unless market prices have soared.

Why are Engagement Rings Cheaper Online?

Over the years, I have heard so many people attribute lower overheads as being the reason for online jewellery being cheaper. For some online jewellers, this will certainly be true. It was for ourselves in the early days of starting up. The reason many online prices are so much less, has more to do with making the rings and not buying finished rings which adds one further link in the supply chain. This removes one ‘margin’ from the process. The other point is the profit margin added to any ring. We have always based this on a fair and competitive level, ensuring we can offer a high level of service. We try to be the best, not the cheapest at what we do.

Comments welcomed. Let us know your thoughts.

About Mark Johnson

Mark attended Liverpool University and went on to pursue a career in the diamond industry. After more than a decade working in polished diamonds, Mark moved to the Isle of Wight where he launched Serendipity Diamonds. He works most days from their busy Ryde showroom, photographing jewellery and writing for the Serendipity Diamonds website.

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