Selling silver work: price models by risk and cash timing

What to take away

A price model decides who owns uncertainty and when cash changes hands. Silver pricing models compared here show how that allocation differs among the four models. It does not remove the need to know material, labor, overhead, selling expense, and profit. For silver work, track the actual cost and weight of silver stock, alloy, stones, and findings, as well as scrap returned and labor for casting, setting, or finishing. The same cuff can be viable at one channel price and loss-making at another because the duties differ.

Comparison table

Cash timing and silver cost by model

The first table compares risk. This one compares when money arrives and who carries a change in the cost of silver stock between quote and sale.

Silver is the input that moves most between a quote and a sale, so write down how each agreement values metal and scrap, and when a quoted price may be reopened.

Fixed price

The maker quotes one amount for a defined result. This gives the customer clarity and rewards the studio when a well-controlled process beats the estimate. It also places overrun risk with the studio unless a change falls outside the signed scope.

Write the object, dimensions, alloy, stones, finish, quantity, revisions, approvals, delivery, included services, exclusions, deposit, payment milestones, cancellation, and change method. For a repair, state the inspection limit and conditions that reopen the price.

A fixed figure should start with materials, labor, overhead, selling costs, contingency tied to defined uncertainty, and profit.

University of Maine Cooperative Extension recommends knowing variable and fixed costs, recording craft labor time, and including overhead in pricing. Its small-business pricing bulletin shows why material-only multipliers can omit labor, overhead, or profit, and its sample numbers are instructional, not current wage or tax guidance.

Time-and-materials

The customer pays recorded labor at stated rates plus defined materials, outside services, and possibly overhead or markup. This can suit diagnosis, restoration, prototyping, or work whose hidden condition cannot be priced responsibly at intake.

Transparency is the main control. State labor categories, minimum increments, material valuation, scrap or return policy, outside-service handling, taxes, expense approval, progress reports, estimate range, not-to-exceed amount, and stop point. Provide dated entries that identify the work performed.

Time-and-materials is not permission for an open-ended job. A customer should know when the studio will pause, what evidence will support a change, and how unused materials or removed parts are handled.

Wholesale

In wholesale, the maker sells goods to a buyer who intends to resell them. The maker receives the wholesale amount under the purchase terms and usually gives up ownership when the sale and delivery conditions are met.

Model volume, batch efficiency, packaging, catalog and sample cost, freight, payment delay, damaged shipment, returns, markdown support, exclusivity, geographic limits, and reorder minimums. Ensure the price still recovers full costs and profit at realistic production volume.

Do not assume that a retailer will use a particular markup. Ask about the intended retail range and protect consistent product descriptions, but avoid dictating resale prices without legal advice.

Consignment

Consignment places the piece with a seller while the maker retains ownership until a defined sale. Payment follows sale and settlement, less the agreed commission and authorized charges. This delays cash and leaves the maker financing inventory.

The University of Wisconsin Center for Cooperatives hosts a USDA craft-business publication, The Cooperative Approach to Crafts (Cooperative Information Report 33, February 2000), that distinguishes direct retail, wholesale, and consignment and notes that consignors carry risks such as shop wear and financed inventory. It reported that producers selling on consignment should expect payment within 30-45 days after the sale, and that consignment puts more risk on the producer than any other wholesale method. Treat its figures as a 2000 benchmark, not a current rate card. Use its craft-channel discussion to identify contract questions, then negotiate present terms independently.

The agreement should list each piece and condition, ownership, retail price, commission basis, discount authority, sales tax, payment schedule, reporting, display, security, insurance, loss, damage, returns, shipping, recall, unsold inventory, bankruptcy, and termination. Reconcile the signed list at every transfer.

What the marks on the piece add to each agreement

Whatever the model, a silver piece leaves the bench carrying its marks, and those marks travel into every quote, purchase order and consignment list. The FTC's Guides for the Jewelry, Precious Metals, and Pewter Industries treat it as unfair or deceptive to mark or describe a product as sterling, "Sterling Silver" or "solid silver" unless it is at least 925/1,000ths pure silver. They also summarize the National Stamping Act: a manufacturer or dealer who applies a quality mark showing that an article is made of gold or silver must also apply its own trademark or name.

That changes what each agreement should record:

Net-receipt comparison

For each model, calculate:

Customer or retail price
- discounts and returns
- commissions and payment fees
- channel-specific packaging, shipping, and support
- direct cost, labor, and overhead
= contribution before applicable taxes and financing costs

Add cash timing. A nominal $600 consignment sale paid after 60 days may serve the business differently from a $400 wholesale payment on delivery. Compare the expected net amount, probability and date of receipt, hours required, inventory tied up, and risk of loss.

Decision questions

Common questions

Is consignment the same as wholesale?

No. A wholesale transaction generally sells the item to the reseller; consignment normally leaves ownership with the maker until sale under the agreement.

Is fixed price always better for customers?

It gives price clarity but may include a risk allowance. Suitability depends on scope stability and change control.

Should wholesale price equal half of retail?

No universal ratio applies. Calculate costs, channel duties, target margin, market position, and negotiated terms.

Can a consignment shop discount a piece?

Only under the authority stated in the agreement. Define who absorbs the discount and how commission is calculated.