Price points, enhanced design drive silver sales

The price of silver has fluctuated since the summer, rising again in October and reaching an approximate $31 an ounce as of Dec. 13. With the price of gold still high ($1,630 an ounce as of Dec. 13) and more designers taking silver styles in new directions, many independent jewelers are noticing an increased interest in silver from their customers.

Here, jewelers share how silver sales are faring at their stores, what they’re carrying for inventory and how they’re advertising the metal to consumers.

Silver sales are going well for Aaron Penaloza, who co-owns C. Aaron Penaloza Jeweler in San Antonio, Texas, with his wife Mary.

“We’ve always done fairly well with silver, but we’re carrying more of it now, because it’s filling better than it was two years ago,” he said. “You can get a bolder look in silver that is just not affordable in gold anymore.”

Penaloza carries silver jewelry from brands such as Thistle & Bee, Alwand Vahan, Lorenzo, and Angelique de Paris, as well as silver estate jewelry, which the jeweler said is selling well. Most silver buyers have been self-purchasers, Penaloza said, but he has seen customers shopping the metal for Christmas.

“The price points are not as high as diamonds or gold, so silver has always been a good alternative to them,” Penaloza said. “Now with silver and gold combinations, the price points are getting up there, and people are interested.”

Silver’s price point is driving customer interest at Sarah Leonard Fine Jewelers in Los Angeles, according to Gail Friedman, graduate gemologist and co-owner of the store, said.

“Silver is very fashion-forward and it’s a great price point, and people notice that,” Friedman said. “As much as yellow gold is selling, [customers] are still into white metals. It’s attractive to them.”

The store carries a variety of different lines in silver, and “they’re moving,” Friedman said. Sterling silver jewelry with colored gemstones has been particularly successful for the jeweler, especially Tacori’s 18K925 line.

“That’s a big part in our store, we sell quite a bit of that,” Friedman said of the brand’s line. “The plain silver doesn’t sell as fast as the silver with stones--most people want some stones in it.”

Highlighting silver’s relatively lower cost to customers has been a successful marketing tool for one jeweler.

“Our silver sales are up dramatically,” J. Dennis Petimezas, president of Watchmaker’s Diamonds & Jewelry in Johnstown, Pa., said, “and I’m promoting silver dramatically.”

Petimezas’ promotion highlights price points, not discounts, which he said is easy to do because of the relative cost of silver as opposed to gold.

“We’re a destination store, so one someone arrives here, they do other shopping as well,” the jeweler said, “they come in because of the perception of value, and it leads to other sales.”

Petimezas has also incorporated “value added” promotions into his business, offering premiums for purchases at certain dollar points. For example, if a customer came in and spent $100 on jewelry, they would receive a $10 iTunes card. The gifts got as luxurious as an iPad2.

“It worked out great,” Petimezas said. “Discounting is out. Value adding is in.”

When it comes to stocking silver inventory, Petimezas doesn’t stick to specific brands but rather looks to see whose manufacturing style he thinks is important.

“The days of buying from salesmen who stop by, those days are gone,” he said, “we look to see who has a large supply of many styles of silver, and now we’re selling pearls and silver, and colored stones and silver, and it’s making an impact.”

Petimezas said that virtually anything he has in gold, he can offer in sterling silver.

“We’ve doing silver hoops with black diamonds and champagne diamonds, and it hits those very important price points,” he said.

Petimezas said that successful jewelers must remain at the forefront of marketing and advertising to stay on top.

“It’s possible the jewelry pie will get smaller before it gets bigger, and if it gets smaller, you have to be sure your slice gets bigger,” he said.

-National Jeweler