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The price difference between 22kt and 24 kt goldis different in different cities and that makes our life difficult in convincing our customers. Why does it happen and how can we explain and convince the customers better?

Sachin, why only price difference between different cities, different retailers sell at different prices on the same street in many parts of the country.

 

24 ktGold is bought at different prices by a retailer over a period of time. Often only an average rate is possible or is used  for the gold on hand. Thus this average gold rate is often then converted into a 22 kt gold rate for making and selling jewellery.

 

In some retail markets, especially in old sarafa areas, a local jewellery association announces the gold rate on a regular or daily basis . This is then followed by most retailers. Then, different cities are likely to be following their own gold rates. Some add a markup to the “Reference rate” which again varies from market to market or city to city,  resulting in different prices for 22kt and 24 kt gold.

 

Thus there is likely to be different gold rates for different karatages across markets and this is bound to increase even further as retailers with different business models emerge. Some like to have a very competitive gold rate and attract consumers, some may have a higher gold rate if they can justify with their “Brand Value”.

 

Rather than focus on differences in gold rates, it is better to focus the energies on 3 Ps – Products, People and Process, including Customer Experiences. If these are excellent, a price difference will not break a transaction. But if most of these are “un differentiated “ amongst you and your competition, then price of 22 kt gold will be the deciding factor ! Almost like Bullion trading !