The Gem Show this year was much like it has been for the past two or three shows: lots of international vendors showcasing country-specific products with highly competitive pricing.
The battle heated up this year with many of the Indian vendors going tit for tat in an escalating price war. Silver beads and findings were a good example of how tight things have become.
The standard price for silver beads was between 48¢ and 50¢ per gram. Consider that the market price for silver is 44¢ per gram, and you can see how slim the margins are. Vendors' cost per gram (for .925 silver) was around 41¢. That means an average margin of just 9¢, not including labor, shipping and customs charges. And what about profit???
Granted, the silver inventory these vendors were carrying had been purchased when silver was a bit lower, but it provides a clear example of how competitive things have become.
Further, it illustrates how almost no one except the true manufacturer for commodity items like silver beads and jewelry basics sold by weight can compete at Tucson. These is simply no room for a middle man.
In talking to one of my suppliers, he explained how in India, there is a lot of pressure to show at Tucson. But the hard lesson many learn is that it takes years to build a clientele, and even then it is a challenge to actually make any money at the show itself.
Most vendors count on orders throughout the year to finance their booth. Often, vendors make only one trip because they cannot abosrb the costs to come back several years in a row and lose money each time.