Online jewelry retailer Ziamond Inc. is reliant on precious metals. The merchant sells cubic zirconia jewelry set in metals like gold or platinum. As the cost of precious metals increased, it was only a matter of time before consumers felt the impact at checkout.

“As prices went up, customers didn’t understand why we had to raise some of our prices — but they’re not watching metal prices,” says Sarkis Kalandjian, president. “They have no clue half the time that gold prices were jumping.”

As of July 2022, gold cost approximately $1,700 an ounce, but spiked as high as $2,000 within the last year, Kalandjian says.

“That’s a significant increase,” Kalandjian says. “We try to stave off increasing prices to our customers, but we couldn’t do it anymore [in 2022].”

Despite price increases of anywhere from 10% to 30% on certain pieces, Kalandjian says consumers are still buying jewelry.  As a result, Ziamond’s average order value (AOV) increased about 24% over the last 12 months, Kalandjian says. AOV falls within the $900s range. Ziamond is No. 1501 in the Digital Commerce 360 Next 1000.

Kalandjian attributes this change to customers buying items for themselves, as opposed to gifts.

“We’ve noticed an increase in customers ordering custom jewelry, which typically have a higher AOV,” Kalandjian says. Ziamond’s customer demographic is mainly female, ages 35 to 65.

The larger pieces tend to be heavier, resulting in the use of more raw material, which costs more. Though platinum is not as expensive as gold per ounce, platinum is pure. A 14-karat gold item is only 15.5% pure gold, while the rest is made from alloy metal, which is less expensive. Platinum pieces require 95% pure platinum, and it’s heavier. Kalandjian says demand for platinum-set pieces has grown. Sales for platinum pieces grew 5% in 2021 compared with 2020, he says. And the more platinum used, the higher the cost.

Retailers offer free shipping, but most often with minimum purchase

Ziamond offers free domestic shipping for orders more than $100.

“We haven’t increased that threshold yet, but our [domestic] shipping costs have increased 15% to 20%,” Kalandjian says.

When Next 1000 retailers offer free shipping, it’s most often with a minimum purchase, with 48.8% of Next 1000 merchants now offering this option compared with 46.2% in 2020. The median order threshold for free shipping remains $75 in 2021. The 2022 Next 1000 includes online retailers that generated annual ecommerce revenue between roughly $1 million and just over $39 million in 2021.

While Ziamond hasn’t increased domestic shipping rates yet, it has increased international shipping prices by about 12%. Most international shipping orders cost $40. Kalandjian didn’t specify how much of its web sales come from international customers, but it’s a small portion. Small enough that the merchant does not expect its overall web sales to be affected if international customers must pay more for shipping.

This is an excerpt from the 2022 Next 1000 Report. The report can be downloaded now as a PDF for $499. Digital Commerce 360 Gold and Platinum Members receive a complimentary copy of this report as a part of their membership.

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