How Much Profit Do You Really Make Selling Gold Jewelry?
Overall, leading brands operate at gross margins of 40–60%, meaning roughly half of what you pay for their products goes straight out the window. Smaller, lesser-known brands are comparatively more straightforward, with substantially lower margins.
In the first half of 2021, Chow Tai Seng and CHJ Jewellery posted gross margins of 40.46% and 34.6%, respectively.
Chow Tai Fook and Lam Wo Jewellers maintained gross margins above 20% through the end of September 2021, while Chow Sang Sang’s margin also exceeded 20% in the first half of 2021.
Caibai Co., Ltd. reported a gross margin of 13.94% in 2020.
Old Phoenix, China Gold, and Yuyuan Shares’ jewelry segments sat at even lower levels, posting gross margins of 7.4%, 3.02%, and 8.32%, respectively, in the first half of 2021.
Marketing expense ratios for Chow Sang Sang, Chow Tai Fook, Chow Tai Seng, and Lam Wo Jewellers all fell within the 10%–20% range. Meanwhile, legacy state-owned and state-controlled firms such as Caibai, China Gold, and Old Phoenix kept marketing spend to single-digit percentages—China Gold’s ratio was a mere 0.84% in the first half of 2021.
With the exception of CHJ Jewellery, which reached 1.3% in the first half of 2021, R&D spending for the other players remained below 1%. China Gold, Caibai, and Old Phoenix reported especially low R&D ratios of 0.0075%, 0.057%, and 0.039%, respectively.