Over the past several months, the raw cost of silver has become unpredictable. This has greatly affected sourcing for retailers in the UK. Inventory pricing today has gone up over 150% in the past year, for the same styles. The reason for this boom in price is due to uncertain economic factors, mainly in the US. As a globally traded commodity, investors find safety in tangible valuable materials, and therefore the value of those commodities goes up.
As the cost price of silver increases, so do the manufacturing costs. There is a knock-on effect that impacts the entire industry. However, for savvy retailers and wholesalers alike, those that secured stock prior to the price spike, will have seen a great return on their investment.
Why Wholesale Inventory Provides Price Stability During Volatile Periods
A production order involves manufacturing jewellery to order. An order is placed, and then the stock is created. Because the jewellery hasn’t been produced yet, the silver is only sourced and priced once the order is placed.
These orders are the most common way of sourcing jewellery in larger quantities, and the most sensitive to shifts in the wholesale raw silver cost.
Production orders do become worthwhile considerations once the cost-per-unit comes into play.
This happens because production orders don’t need to account for the following cost factors that wholesale pricing does:
- Inventory storage cost
- Inventory storage risk
- Distribution handling cost
- Unsold inventory risk
ODM production generally allows a business to reorder stock using existing designs at a lower cost to the retailer, with additional flexibility to the original design. While OEM production will let businesses develop their own designs and will guarantee exclusivity on your designs (Based on your negotiation, you can waive the exclusivity rights to your designs in exchange for additional discounts. That being said, this is a case-by-case situation).
It’s important to strategise production orders due to requirements like the minimum order quantity/lead times. You can check our production order page for more information or contact our technical team for assistance
Wholesale sourcing will provide stability in pricing and research-led designs, but production order likely end up with a cheaper cost-per-unit and exclusivity. Both models serve different purposes and are entirely dependent on your business’s current status and goals.
Why Lightweight Sterling Silver Jewellery Reduces Cost
Silver jewellery, especially solid sterling silver jewellery has it’s costs directly linked to it’s weight.
Modern jewellery manufacturing techniques allow for makers to create durable designs using minimal silver, and without compromising structural integrity.
Examples include:
- Fine chains & necklaces
- Minimalist studs
- Open rings
- Lightweight charms
These designs still provide mass appeal, but require little raw material – ultimately making them cost efficient.
Stocking lightweight sterling silver jewellery will allow businesses provide maintain accessible pricing to their customers even when raw silver prices increase.
Clearance Inventory Allows Retailers to Capitalise on Hallmarked Sterling Silver Jewellery
Clearance pricing is generally used to rotate inventory, sometimes seasonally, and make space for new lines of production – never because quality issues.
This leaves a great opportunity for businesses to capitalise on obtaining cheap stock and improve their markup.
It also provides a brilliant opportunity for businesses to test new product collections with lower financial risk.
Best Sellers and Newly Restocked Categories Reduce Stock Risk
Bestseller categories feature designs that have an evidenced success rate.
A ‘Newly Restocked’ category also indicates styles that sell well and are commonly replenished.
These sections are brilliant sourcing tools and can provide invaluable information to retailers. Because these designs are proven sellers, stocking up on them means they’ll likely sell quickly and mitigates the time required to hold stock.
This will reduce your exposure to future raw silver pricing, because your capital isn’t tied up in slow-moving stock.
Some great examples of frequently restocked sterling silver jewellery include:
- Cubic Zirconia solitaire stud earrings
- Heart pendants
- Stacking rings
- Lightweight chain necklaces
- Hoop earrings
These designs tend to be popular because they’re great for everyday wear and gifting too.
Seasonal Jewellery With A Variable Sales Period
Certain jewellery designs are introduced around specific seasonal periods (e.g. Christmas). However, the style often continue generating revenue for retailers throughout the year. They often have a longer demand than immediately predicted.
Valentine’s Day and Mother’s Day Overlap
Heart-themed styles are of course a bestseller around Valentine’s Day. But with Mother’s Day following quickly after, the designs can too be stocked to bridge both holiday periods.
Infinity charms are a great symbol for everlasting love, a sentiment that can also be expressed around either festive season.
Cubic Zirconia solitaire studs are a consistent seller year round, but we see spikes around Valentine’s and Mother’s Day – so it’s worthwhile considering increasing your stock levels in preparation.
Spring Jewellery With Year-Round Appeal
Designs like the Tree of Life represent growth and continuity – two references also symbolic with Spring. They’re a great example of nature-themed designs that peak in the Spring, but tend to sell well year round.
Other nature-inspired designs such as floral studs, leaf patterns, and animal-themed enamel jewellery continue to be in demand well past the season.
Summer Jewellery That Becomes Everyday Jewellery
Summer brings a new season in lightweight jewellery designs. The styles preferred around this season are often animal & ocean-themed styles.
Ear stacking combinations of minimalist huggies and hoop earrings, also remain consistently popular across all seasons.
These designs are great for transitioning between seasons, and often due to their light weight and wearability, have year-round demand.
Sterling silver ensures these pieces maintain durability despite frequent wear.
Autumn and Winter Designs With Continuous Demand
As the temperatures drop, certain designs become more popular in the autumnal season. “Stacking Rings” and “Outline Necklaces” are especially popular and sell well around this period.
As the temperatures drop, certain designs become more popular in the autumnal season. “Stacking Rings” and “Outline Necklaces” are especially popular and sell well around this period.
Little and Often Restocking Strategy
By frequently restocking, this will take away the liability of harsh price increases and allow retailers to limit their risk.
Introducing this strategy to a jewellery business can provide great visibility to the market, and symbiotically also allow business owners to flip the designs in their collection to meet trend demands.
Combining Wholesale Purchasing and Production Orders Improves Cost Efficiency
Business owners that restock their jewellery collections through wholesale purchases and production orders will see different benefits to each method:
Wholesale purchasing provides:
- Immediate availability
- Stable pricing (based on past production costs)
- No manufacturing time delay
- Flexible order quantities
Production orders provide:
- Lower cost per unit
- Manufacturing efficiency
- Ability to reorder proven designs at lower cost
- Custom design capability through OEM production
Buying wholesale generally better supports the design testing of jewellery businesses, but production orders are better when you know exactly what you want and need a better price.
Sterling Silver Reliability in the UK Market
Sterling silver is a versatile material that has, for decades, had an intrinsic impact in the UK jewellery market. The material strikes the perfect balance of durability & value.
Stocking hallmarked and authenticated sterling silver offers consumers a level of assurance that plated jewellery can’t provide. This makes sterling silver jewellery a great option for:
- Everyday wear
- Giftable asset
- Long-term ownership
Retailer Sourcing Strategy Determines Pricing Stability
The harsh volatility of the recent silver price spikes has had a huge industry wide impact – affecting manufacturing costs, but crucially impacting independent businesses.
To mitigate these drastic cost changes, stocking wholesale inventory is being seen as a proven strategy in helping fight the impact.
For more established businesses, placing production orders will likely from a much better cost/quantity ratio, but will likely be impacted greater by the price volatility.
By opting for lightweight stock, retailers can reduce their exposure to the high raw material fluctuations, and by stocking bestselling jewellery, business owners can have peace of mind knowing that they’re stocking styles with sustainable demand.
At the core of the UK jewellery industry, sterling silver remains crucial in it’s balance of durability and consistent demand.
By carefully choosing how they source stock, UK businesses are able to better mitigate the raw silver price volatility by following this guide.