Silver has been the hardest input to quote this year. Buyers who sign six-month price agreements at the wrong week can be five to eight percent apart from the market by the time production starts. The practical question is not whether silver will move, but which part of the cost you lock and which part you let float.
Split the quote into metal and conversion
Ask every silver supplier for two lines: metal value calculated on the day’s fixing at the exact gram weight of the piece, and conversion (labour, setting, plating, polishing, packaging) as a fixed figure. Conversion rarely moves more than a few percent in a year; metal can move that much in a month. Once the quote is split, you can negotiate the conversion on its own merits and manage the metal exposure deliberately.
Three locking patterns that work
Lock per order at order confirmation
The simplest contract: metal priced at the fixing of the day you confirm the purchase order. Works well when lead times are under six weeks. Both sides carry risk only for the production window.
Float with a cap
For repeat programmes, index the metal to the fixing at shipment, with a band: if silver moves more than eight percent either way, the difference is shared or the price is re-opened. This keeps the programme alive through volatility without renegotiating every PO.
Forward-buy the metal weight
Large, predictable programmes can buy the gram weight forward through their own channel and supply it, or agree a fixed gram price for a quarter. Only worth the administration above roughly 20 kilograms of silver per quarter.
| Situation | Recommended pattern | Why |
|---|---|---|
| One-off order, 6 week lead | Lock at confirmation | Simple, production window is short |
| Monthly replenishment | Float with 8% cap | Avoids monthly renegotiation |
| Programme above 20 kg silver per quarter | Forward gram price | Real hedging becomes worthwhile |
| New supplier, first order | Lock at confirmation | Tests honesty before sharing risk |
Check the gram weight before comparing prices
Two silver pendants can differ by 40 percent in metal weight at the same visual size if one is hollow or lighter behind the setting. Ask for the gram weight per piece on every silver quote and compare price per gram of finished piece, not just unit price. This single line reveals more about a quote than any discount.
Frequently asked questions
Commonly yes once the order passes the supplier quantity break, with the sample fee credited against the first invoice.
Because the design is not the same product. Differences hide in gram weight, plating thickness, stone grade and the QC steps included. Ask both for gram weight, plating microns and stone specification in writing, then compare price per gram of finished piece. The gap usually collapses; whatever remains is the real negotiation.
Whatever your contract says. With metal locked at order confirmation, nothing changes. With a floating clause, the metal line moves with the fixing within an agreed band; beyond the band, the price re-opens. Insist on the split quote, metal and conversion, so movement is transparent and only the metal line ever moves.
