Why do we price strands at RETAIL at the shows? What's "KEYSTONE?"

[Russ Nobbs]

This spring we've had 2 people contact us about the way we price goods at our trunk shows. They were concerned that we were trying to pull a "fast one" by marking things at "retail price."

Dave (our web guy) blogged about this at Keystone Blog .  I wanted to expand on it here as I'm sure more than 2 of you have been confused by the way we mark prices on strands at shows and in our showroom.

Keystone pricing is an old format that we've "always used." That means we should look at why we do it that way. "Always done it that way" often means it's not the right thing to do today. <grin>

Rings & Things has been selling to stores for a long time. We started with a line of  filigree and bead earrings in the 1970's and used "Keystone" pricing from the start. We sold the earrings pre-priced to boutiques, department stores and drug stores. Later I sold  Southwestern and Native American jewelry to gift shops and tourist stores around the National parks in Montana, Idaho and Wyoming.

We had our jewelry marked with what is known in the trade as "Keystone Pricing", that is, the goods were marked at suggested retail and the store paid 1/2 of the marked price. To indicate this we put a (K) next to the price. Assuming the store took the typical 2X markup they did not have to reprice the goods before putting out for sale. (These days many stores require a longer markup. Fine jewelry suppliers often provide  good-priced with "triple keystone" pricing  where the cost is 1/3 of the selling price. This is "3K" or "Triple Key" pricing.)

A Google search for origin of keystone pricing gives several hits including http://retail.about.com/od/glossary/g/keystone.htm

When we operated retail stores as well as our wholesale business the selling price to retail customers was the marked price while wholesale customers buying for resale paid "Keystone" or 1/2 of the retail price. Rings & Things continues to mark most stranded goods (i.e. gemstones, beads and pearls) with the suggested retail price and a (K) to indicate this is keystone pricing. This allows our customers to sell whole strands at the marked price and double their cost.

You will see the term used at wholesale gift and jewelry shows where buyers for retail stores go to find new merchandise. You will hear this called "going to market" or "just got back from market." Wholesale showrooms in merchandise marts in many cities will have signs about "All goods priced Keystone" or similar phrases.

At our shows and in our showroom we announce that the goods are marked at retail and that wholesale is 1/2 of the marked retail price. Our wholesale catalog is priced at this same wholesale price. At many shows we give an extra 15% off the wholesale price.

This is not an attempt to control  the selling price or suggest that the "regular" price is  higher than it is marked. It's simply a traditional way of marking pre-priced goods that has been used in the jewelry industry for more than 50 years.

I wonder how many of you who make jewelry for sale to stores and boutiques pre-price using the Keystone model?

[Irene French]

In response to your letter,when i order from your catalog (i have tax id)i will pay 1/2 price?

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[Polly]

Hi Irene,

Thank you for asking.
The prices in our catalog are wholesale, so resale ID does not give you a discount off the catalog prices.

(This forum posting explains the price tags at our bead shows, rather than in our catalog.)

[Luann Udell]

I've never minded the retail price on the show tags.  In fact, I like it.  Once some people visiting my studio try to buy my bead strands, and they noticed the price on the tags!  I finally incorporated that strand into a custom design for them.  But it would have been awkward if they'd wanted the final price to be based on MY wholesale cost.

[Russ Nobbs]

That's it, Luann. That's exactly the purpose of "keystone" pricing on our strands.
It does make it easier if you  allow your customers to see the strands as they come from us.

I think part of the problem comes from people new to the beading and jewelry business who have moved up from the "end user" of hobby phases of beading. It's why "How do I price my jewelry?" is such a popular topic in forums.