Were you surprised by the price difference between gold in the market and its price inside jewelry stores? The secret is often in the gold manufacturing cost, which is the main factor added to the price per gram, and it varies from store to store without a fixed standard.
If you are planning to invest in or buy gold for adornment, knowing how to calculate the manufacturing cost in Saudi Riyals is essential to avoid overpaying.
In this article from Qimmat Zawiya Al Shifa Store, we help you understand the manufacturing costs and how to calculate them accurately, so you can make a smart decision before buying.
What is the cost of gold manufacturing in Saudi Arabia?
The gold craftsmanship fee is the additional cost added to the price of a gram of raw gold. It represents the value of the effort and skill expended in transforming the metal into a wearable work of art. This craftsmanship fee is an essential part of the final price of gold, as it includes the cost of design, shaping the piece, engravings, and operating expenses within workshops or stores.
How to calculate the manufacturing cost of 21-karat gold in Saudi Arabia
To calculate the manufacturing cost of 21-karat gold, you must first determine the price per gram on the day of purchase, then add the manufacturing cost set by the trader or workshop, along with any applicable fees or taxes.
Steps:
Determining the price of a gram of gold:
Find the price of a gram of 21-karat gold in the local market or through an authorized dealer.
Knowing the value of the workmanship:
Ask the jeweler to explain how the labor cost is calculated. It may be calculated per gram (a fixed value per gram), as a percentage of the price, or as a fixed amount for the entire piece.
Calculating the total price:
- If the manufacturing cost is per gram: Weight × (Price per gram + Manufacturing cost per gram).
- If the manufacturing cost is a percentage: (price per gram × weight) × (1 + manufacturing cost percentage).
- If the manufacturing cost is fixed: (price per gram × weight) + total manufacturing cost.
Adding taxes:
If there is value-added tax or any government fees, they are added to the final total.
How to calculate the cost of gold manufacturing in Saudi Arabia?
The cost of gold manufacturing in Saudi Arabia is calculated by adding a set of expenses to the price per gram of raw gold. These expenses include the manufacturing cost itself, the merchant's profit margin, and finally, value-added tax (VAT). This formula is essential for anyone wishing to buy gold, whether for adornment or investment, so they are aware of the true cost they will pay.
Basic steps for calculating the price of gold including manufacturing costs
- Knowing the price of a gram of raw gold in the market according to the carat (18 - 21 - 24).
- Adding the manufacturing cost per gram (determined by stores according to the design and brand).
- Adding the trader's profit (which is often a fixed amount ranging between 20–30 riyals per gram).
- The value-added tax (VAT) is calculated at 15% on the final product.
Illustrative example (different from the previous example):
Let's say you want to buy a 21-karat gold ring weighing 12 grams.
- Let's assume that the price of one gram of 21-karat gold today is 190 riyals.
- Manufacturing cost = 35 riyals per gram
- The merchant's profit = 20 riyals per gram
Step 1: Total price per gram = 190 + 35 + 20 = 245 riyals
Step 2: Total price of the ring before tax = 245 x 12 = 2940 riyals
Step 3: VAT 15% = 2940 x 0.15 = 441 Riyals
Step 4: Final price = 2940 + 441 = 3381 Saudi Riyals
This way, you can know the full price of any gold piece before buying, giving you greater transparency in dealing with jewelry stores and saving you from any unexpected costs.
comments:
- The price of gold changes daily according to the local and global market, so the price should be checked before calculating.
- The workmanship varies from store to store, so it is best to compare between more than one jeweler.
- Always buy from authorized stores to ensure quality and standard.
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What factors influence the calculation of gold manufacturing costs?
The cost of labor varies depending on several factors, most notably:
- Design complexity: The more detail and precision there is in the piece, the higher the craftsmanship.
- Materials used: such as precious stones or white gold, which increase the value of the piece.
- Craftsman's skill: Exquisite handcrafting is worth a higher cost.
- Brand: Products belonging to well-known brands often carry higher manufacturing costs.
- Place of purchase: The manufacturing cost varies from store to store within the Kingdom, depending on quality and reputation.
Therefore, when buying gold, don't just look at the karat or weight, but also consider the workmanship because it can make a big difference in the overall price of the piece.
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Does the cost of gold manufacturing vary according to the karat?
Yes, the cost of manufacturing gold varies depending on its karat. The lower the karat, the higher the manufacturing cost. For example, the cost of manufacturing 18-karat gold is usually higher than the cost of manufacturing 21-karat gold, because lower karat jewelry requires more effort in shaping and design, due to its higher content of other metals.
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Why is the Summit Corner of Healing store a smart choice for buying gold?
- There is a variety of designs, as the store offers collections to suit different tastes, from classic to modern.
- Competitive prices while ensuring the lowest possible cost of labor.
- Transparency in pricing, with a full explanation of the price details including the price per gram, manufacturing cost, and value-added tax.
- Certified quality that adheres to strict manufacturing standards.
- Excellent customer service provides technical support and assistance in selecting the most suitable piece in terms of caliber and workmanship.
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In conclusion, understanding how to calculate the cost of gold is essential for anyone looking to buy gold, whether for investment or jewelry. Understanding the factors that determine the cost of gold and how to calculate it helps you make a more informed purchasing decision and avoid paying unjustified extras.
Choosing reputable stores that offer transparent pricing and high-quality products, such as Qimmat Zawiyat Al Shifa, enhances your confidence in the purchasing process and provides a comfortable and secure experience. Don't hesitate to monitor gold prices regularly and carefully calculate the manufacturing cost before finalizing any transaction.
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Frequently asked questions about how to calculate the cost of gold manufacturing
What is the difference between the price of gold and the price of manufacturing?
Gold price = Price per gram of gold × Weight of the piece.
Manufacturing cost = Gold manufacturing fees which sometimes include stamping and tax.
Does the cost of gold workmanship vary depending on the type of piece?
Yes, the manufacturing cost varies depending on the type of piece (alloys, coins, jewelry) and the precision of the workmanship.
- Gold bullion: The manufacturing cost ranges from 3.8 to 10 riyals per gram (20 to 55 pounds).
- Gold pound: approximately 9.5 Saudi Riyals per gram (50 pounds), and a full pound is approximately 76 Riyals.
How can the manufacturing cost of gold be calculated when buying bullion?
The manufacturing cost depends on the weight of the ingot and ranges from 10 to 11.5 riyals per gram (55 to 60 pounds).
Final price = (price per gram of gold + manufacturing fee) × weight of the ingot.
What is gold that has no manufacturing cost?
Used gold and gold without stones and gems often do not have a manufacturing fee imposed on them, or it is low, especially when buying from reliable places.