Jewelry Manufacturing
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Industry Overview
The US jewelry manufacturing industry includes about 1,900 companies with combined annual revenue of over $6 billion. Major companies include Tiffany, Zale, and Richline Group (Aurafin and Bel-Oro International). The industry is concentrated: the 50 largest firms account for 60 percent of industry revenue. However, nearly two-thirds of companies have fewer than five employees.
The industry includes companies primarily engaged in manufacturing, engraving, chasing, or etching jewelry and personal goods, such as compacts or cigarette cases, and stamping coins. Products are made with precious metal solid or precious metal clad jewelry, and can be with or without stones.
Competitive Landscape
Demand for jewelry is driven by personal income and world gold and silver prices. The profitability of individual companies depends on efficient operations and cost controls. Large companies have advantages in offering a broader product line to meet consumers' changing desires, and in efficient production and distribution operations. Small companies can compete effectively by offering individualized and unique product lines. Average annual revenue per worker for a typical large company is over $200,000.
Products, Operations & Technology
Major products are gold and platinum jewelry (70 percent of industry revenue); silver jewelry (10 percent); and other jewelry, including other metal types, precious stones, and pearls (11 percent). In addition to jewelry, personal goods products, such as cigarette cases and lighters, vanity cases and compacts; trimmings for umbrellas and canes; and jewel settings and mountings are included.
Jewelry products have traditionally been unbranded. The basic manufacturing steps are designing, molding, casting, polishing, finishing, and plating. Most jewelry is produced by casting machines. After the design is finalized, a high technology mold is used to make a wax reproduction of the jewelry. The master mold, with all of the fine details, sets the base for the total manufacturing process. Molding and casting are complex processes that require high levels of skill and experience. Significant hazardous waste is produced in the polishing, cleaning, and stripping steps.
The largest raw material is precious metal, such as gold or platinum, representing 32 percent of inputs. Precious, semi-precious, and synthetic stones and pearls represent 22 percent. These raw materials are bought primarily from the mining industry. Gold, silver, platinum, and palladium are all readily available and come in many forms such as bars, ingots, sheets, strips, solders, platings, and electrodes. Precious stones, such as diamonds, can be in short supply due to political conditions in producing countries and trade regulations. Diamond supply is controlled by the Diamond Trading Company, which is a part of De Beers of South Africa. Manufacturers buy directly from De Beers.
Gold is an ideal raw material for jewelry as it doesn't corrode, rust, or tarnish and, although it's strong, it's also the most malleable of all metals. Platinum is relatively rare and more valuable than gold. Platinum's popularity is driven by its durability and attractive silver-white color. Platinum is heavy and is offered in purer form than gold. Silver is also popular, with its bright and durable characteristics, but isn't as popular as gold and platinum because it does tarnish and lose its shininess. Ten-karat gold has become an increasingly popular alternative to 14-karat due to its greater durability and lower price.
Technology is a critical component of product design and manufacturing. CAD software is used to create virtual models of new jewelry pieces. Process control systems automate steps in mold- and model-making.
