Charles R. Goulding and Peter Favata take a look at rising jewelry sales and new ways of making jewelry.
Recently the New York Post wrote an article describing the growth of in-home jewelry sales to wealthy customers. In recent years, retail jewelry stores have been on the decline. There are multiple reasons for this. For one, the industry is not attracting as many young jewelers as it used to. A majority of stores are owned by baby boomers who are coming to the end of their working careers. Additionally, along with many industries, e-commerce is steadily gaining market share. Online prices are usually lower, and it is a more convenient and less pressurized sales process. Surprisingly, even though retail stores are shutting down, the sale of jewelry has gone up.
One interesting development is wedding arrangements during the COVID-19 pandemic. Unable to have a large wedding party, some couples have decided to redirect the extra money and spend it on a more expensive ring than they would normally. The sale of fine auction house quality jewelry has also seemingly gone unaffected by the pandemic. This past year, Sotheby’s auction house sold a 14.83-carat purple-pink diamond for $26.6 million.
The pandemic hasn’t stopped the upper class from buying jewelry either. Some high-end jewelers in New York City have started making house calls to make their sales. Michel Piranesi, a jeweler in the city, was quoted as saying, “Our sales are up 300 percent since the pandemic started”. He has even expanded to traveling to Atlanta, Southampton, and Palm Beach, Florida in order to make these sales. Back in December of 2020 we published an article on Fabbaloo talking about how more people from New York City are moving to eastern Long Island.
3D printing has found its place in the jewelry design industry. Most commonly, a special castable wax resin is being used in 3D printers in order to create amazing pieces of jewelry. Using this wax you can create a design in CAD then using a 3D printer bring it to life, making changes when needed. This allows you to make a customizable piece of jewelry to satisfy the needs of your customer. Once the wax version is made you can then take that and use it as a cast to pour in the metal of your choice, creating a wearable ring.
Manufacturers and technical designers utilizing additive manufacturing may be eligible for Research and Developments (R&D) Tax Credits.
The Research & Development Tax Credit
Whether it’s used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D credit-eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.
Enacted in 1981, the now permanent Federal Research and Development Tax Credit allows a credit that typically ranges from 4%-7% of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:
- Must be technological in nature
- Must be a component of the taxpayer’s business
- Must represent R&D in the experimental sense and generally includes all such costs related to the development or improvement of a product or process
- Must eliminate uncertainty through a process of experimentation that considers one or more alternatives
Eligible costs include US employee wages, cost of supplies consumed in the R&D process, cost of pre-production testing, US contract research expenses, and certain costs associated with developing a patent.
On December 18, 2015, President Obama signed the PATH Act, making the R&D Tax Credit permanent. Since 2016, the R&D credit can be used to offset Alternative Minimum Tax (AMT) or companies with revenue below $50MM and, startup businesses can obtain up to $250,000 per year in cash rebates that can be applied directly to payroll taxes.
Jewelry has long been used as high fashion accessories or a statement. With the jewelry market worth estimated at $230 billion, jewelers are always looking for ways to improve their craft. We expect to continue to see more jewelers utilizing 3D printing in the future.