A. How Long Does It Take to Make a Piece of Jewelry?
- A jeweler can make a simple set of earrings or a ring in two days if he works eight hours a day. This is the average time required if the jewelry is going to be set with a precious stone.
- A college ring, on the other hand, can be made in two or three days. A simple wedding band can be completed in only a day.
B. Determining the Price of the Jewelry
Pricing a piece of jewelry takes into consideration several factors:
1. Production Cost – Three components go into the production of jewelry; these are:
- Raw Materials – These refer to the metals and / or the precious stones or gems to be used in a particular jewelry. These will also include the production supplies such as chemicals used and other consumables.
- Direct Labor – This is the actual man – hours put into the production of the jewelry. This will already include jewelry designing.
- Overhead Cost -This refers to other expenses, which make the jewelry production possible such as depreciation of the tools and equipment used; light and power, supervision.
- Rent of the Production Space.
- Other Expenses related to producing the jewelry such as transportation, table expenses, raw material wastage.
2. Administrative and Selling Expenses – Once the pieces of jewelry are out of production table, (in cases of mass production), marketing and selling come in. Attractive packaging and display counters enhance the intrinsic value of the jewelry. The seller’s product knowledge will also convince would-be buyers of the real worth of the jewelry. All these, including the display store rental and other advertising promotion expenses comprise what is referred to as operating expenses which may be subdivided into administrative and selling expenses.
3. Mark-up – Determining the mark-up on the production cost of jewelry will consider the administrative, marketing and selling expenses plus the target profit of the manufacturer and / or seller. To illustrate:
a. Cost of Production of Rings (4 pieces), %
- a1. Raw Materials (gold and other alloys): P2,500, 50%
- a2. Direct Labor (2 days): P750, 15%
- a3. Overhead Expenses: P1,750, 35%
- Total Production Cost (TPC): P5,ooo, 100%
b. Administrative and Selling Expenses (ASE)
- 30% of Production Cost: P1,500, 30% (of production cost)
- Total Production Cost and Selling Expenses: P6,500
c. Target Profit and ASE (100%): P3,250, 50% (of Prod. Cost)
d. Selling Price of Ring per piece:
- P9,740/4 = P2,437.5 0r P2,500 (rounded off)
Where to Get Gold and Silver Supply?
Although gold is being mined in many places all over the country, one can not just get or buy gold from any source without incurring legal impediments or repercussions.
In the Philippines, only the Bangko Sentral ng Pilipinas (BSP) is authorized to sell gold. This authority is stipulated under Republic Act 7076, the law which assigns the Bangko Sentral as the sole authorized agent that can sell any of the gold or silver produced from Philippine mines. Hence, it is only from this government agency that one can buy gold in specific quantities. Therefore, to avoid getting penalized, a jeweler is well advised to purchase his gold or silver supply from the BSP.
Gold can be bought by the grain and this is measured in troy ounce.
The price of gold at the BSP is based on the London Closing Price, the world standard for gold prices. Purchasing gold or silver from the BSP entails a number of required documents. First, your business certificate of registration (obtained from either the Securities and Exchange Commission [SEC], if your business is a corporation or from the Department of Trade and Industry [DTI], if the business is a sole proprietorship) should be presented to the concerned BSP authorities. Next, it is also important to have the following business documents ready for inspection:
- Certificate of Registration from the Bureau of Internal Revenue (BIR)
- Business Permit and Licenses from the Municipal or City office where your business is operating
- Latest audited Financial Statements of your business
After presenting the above documents,the Foreign Exchange Operations and Investment Department will now give you the application form for completion. In instances where you may need only small amount of gold and you do not wish to be needlessly encumbered with all the legal requirements as those mentioned above, the jewelers in Meycauayan, Bulacan may be able to accommodate your gold requirements. Look for accredited members of their jeweler association. They may wish to space a few troy ounces of their purchases from the BSP for your own use.
source: TRC Business Guide, www.trc.dost. gov.ph, photo from www.freedigitalphotos.net