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Pearl Education - Please enter your jewelry question or comment. > Pearl Price Paradox

The value of retail pearls
05-07-2006, 10:43 AM

Did you know that the more expensive a pearl strand is the easier it is for a store to sell? One cannot help but determine that most consumers purchasing a pearls haven’t the faintest clue as to how pearls are truly valued. Because pearls are supposed to be rare, one would assume that they are also expensive. When consumers see pearls that are expensive, they automatically assume that they must be fine quality. Many retail stores take advantage of this phenomena when pricing their pearls. This way, retail stores earn that three to four times markup that we have all learned about in our college business classes. Eventually, consumers catch on to this and resent the fact that retail stores are making such a large profit while selling mediocre quality.

Other kinds of retail stores use this same tactic and get away with it as well. How is this possible you may ask? Finer retail stores use the same formula of four times markup but this time, they change it slightly; they only sell very, very fine quality. Tiffany & Co. is one of these finer retail stores. This way, when a consumer learns that they have just paid a quadruple markup above wholesale they have no recourse as the pearl they have just purchased is extremely fine quality and difficult to obtain. There is nowhere else to go. By selling the finest quality pearls available over time, Tiffany & Co. along with other finer retail stores, have earned the right to overcharge for their pearls. After all, they do supply the finest quality; a reputation they have proudly earned. However, Tiffany & Co leverages their reputation for selling finer quality to extract the absolute highest prices from consumers. In a sense, consumers are paying Tiffany & Co. a huge premium to insure that they are truly receiving the finest quality, whereas other low end retailers offer quality that is sub par. Tiffany’s reputation, coupled with the fact that the consumer notion that expensive pearls are automatically fine quality, is the reason why they sell the finest quality at the most brilliant prices.

The key for any consumer is to learln how to identify those extremely rare super fine quality pearls that are worth the most and obtain them at truly wholesale prices.

Last edited by pearleducation; 05-07-2006 at 10:46 AM.
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Pearl Pricing
06-13-2006, 05:36 PM

Nobody has the "right" to take advantage of the poorly educated consumer.

Your regular B&M (Bricks & Mortar) jeweler will almost always charge significantly more than their online competitors. In many cases, this is not purely out of greed, think about it - if you own a B&M store you have much higher overheads than an internet only seller.

Thankfully the consumer is finally waking up to the fact that the internet is a great place to shop for fine jewelry and a method that they can use to increase the quality of the products they eventually purchase, or to save money on their originally wanted item.

The reason why Tiffany & Co (et al) are able to get away with charging higher prices is in my opinion nothing more than very clever marketing that has led to the perceived impression that if an item has the right brand on it it is "worth" more as it "must" be higher quality. This is completely untrue. A good example of this is a branded t-shirt. Take a regular t-shirt, blue in color, featuring a white logo as an example. One t-shirt displays the brand Gap, the other displays the brand Dolce & Gabbana. You don't need me to tell you which one retails for a higher $ amount and is perceived as being infinitely better & more desirable - Pearls / Jewelry is no different.

Buyer Beware - Do your research before being blinded by branding and educate yourself before making your purchase.
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