NAJ issues updated guidance as precious metal volatility squeezes jewellers' margins
The National Association of Jewellers (NAJ) has released a refreshed version of its guidance on "Precious Metal Pricing and Managing Customer Expectations", responding to an extended period of sharp and unpredictable movements in gold, silver and platinum prices.
The new document is designed to give jewellers across the UK trade - from designers and manufacturers to independent retailers and larger chains - a practical framework for operating in a market where metal prices can shift significantly within days or even hours.
Why the guidance has been updated
Persistent volatility in precious metals has filtered through every stage of the jewellery supply chain. Rapid price swings are affecting:
- Retail pricing strategies and profit margins
- Stock purchasing and inventory planning
- Scrap buying and part‑exchange policies
- Costings for bespoke and made‑to‑order pieces
- Insurance valuations and revaluations for customers
According to NAJ, members reported growing pressure to keep prices competitive while protecting already tight margins, all under the scrutiny of increasingly well‑informed customers who can check spot prices instantly online. These concerns prompted the association to revisit and expand its previous guidance.
The newly released document follows a consultation period in which NAJ gathered feedback from members and stakeholders across the sector. An earlier draft version was circulated to the trade; comments and case studies from that exercise have now been incorporated, resulting in a more comprehensive and practically focused resource.
What's new in the refreshed guidance
The latest edition goes beyond a simple update. It is described as a renewed and extended version that:
- Offers clearer direction on responding to rapid price changes
- Includes broader, sector‑specific examples for different business models
- Adds economic and regulatory context to current market instability
- Emphasises long‑term resilience rather than short‑term reactions
NAJ stresses that the document is not intended to dictate specific pricing, fee levels or commercial strategies. Instead, it lays out best‑practice principles that businesses can adapt to their own circumstances, taking into account their operational model, financial headroom and tolerance for risk.
Key areas the guidance is designed to support
The publication addresses a range of common scenarios facing jewellers when metal prices are unstable. While details are tailored to different types of businesses, the overarching support covers:
- Setting and reviewing retail prices
How to review price lists more frequently, use clear cost‑plus models, and decide when to pass on increases to customers versus when to absorb short‑term fluctuations.
- Quoting for bespoke and commission work
Methods for building time‑limited quotes, using metal price clauses in paperwork, and explaining to clients why estimates may change before a job is started or completed.
- Managing stock and ordering
Approaches to balancing lean stock with availability, deciding when to forward‑buy metal or finished items, and reducing exposure to sudden downward price corrections.
- Buying scrap and second‑hand jewellery
Guidance on setting transparent buy‑in prices, handling customer expectations when scrap values shift, and documenting how prices are calculated on the day.
- Appraisals and insurance valuations
Considerations for ensuring valuations reflect current replacement costs, and how to explain the need for regular revaluations during volatile periods.
- Customer communication and trust‑building
Practical language and strategies for discussing price changes openly, helping staff handle difficult conversations, and avoiding misunderstandings that can damage long‑term relationships.
Empowering, not prescribing
A central theme of the guidance is flexibility. NAJ is careful not to infringe on competition rules or suggest fixed pricing. Instead, the document encourages jewellers to:
- Develop their own internal pricing policies and escalation procedures
- Regularly review metal surcharges, making charges and margins
- Create documented rules for when to reprice, re‑quote or revalue
- Train teams to apply these rules consistently and fairly
By focusing on principles rather than prescriptions, NAJ aims to help businesses of all sizes adapt the advice to their own realities - whether they are a small workshop specialising in bespoke pieces or a multi‑branch retailer managing large volumes of branded stock.
The importance of clear communication with customers
Katie Gillespie, NAJ's compliance and policy manager, emphasised that the updated guidance grew directly from the lived experience of jewellers navigating turbulent conditions. She noted that the document is designed to give businesses reassurance and practical direction so they can price responsibly, manage customer expectations and maintain confidence in their dealings.
A recurring message throughout the guidance is that transparent communication can turn a potentially difficult topic into a point of differentiation. Jewellers who can clearly explain why a quote is valid only for a limited period, or why an insurance valuation has risen more than expected, are more likely to retain trust even when prices feel uncomfortable to customers.
This includes encouraging businesses to:
- Display clear information in‑store and online about how and when prices are set
- Use written confirmations for quotes, including expiry dates linked to metal markets
- Offer simple explanations of spot prices versus finished jewellery costs
- Train staff to handle questions about "today's price" versus last week's or last year's
Practical steps for coping with volatility day to day
Beyond general principles, the guidance suggests tangible operational responses. While each business will make its own choices, the kinds of measures highlighted include:
- Introducing a regular review schedule for metal surcharges, rather than waiting for quarterly or annual changes
- Using benchmark prices internally (for example, reviewing pricing every time the market moves beyond an agreed threshold)
- Separating labour and design costs clearly from metal costs in quotations and invoices
- Considering deposits or staged payments for higher‑value bespoke work to reduce exposure
- Ensuring contracts, job sheets and customer documents reference possible metal price variation where appropriate
By embedding these practices, jewellers can reduce the shock of sudden market moves and avoid last‑minute, ad‑hoc decisions that may harm profitability.
Risk management and financial planning
The updated NAJ guidance also touches on broader risk management. Precious metal volatility can expose gaps in financial planning, especially for businesses with thin working capital. As part of a more resilient approach, jewellers are encouraged to:
- Review credit terms with suppliers and, where possible, negotiate arrangements that share or limit metal price risk
- Monitor exposure to unhedged metal holdings, whether as bullion, loose findings or partially completed work
- Consider whether forward purchasing, metal accounts or other financial instruments are appropriate for their scale and sophistication
- Stress‑test pricing models against different metal price scenarios to understand at which point margins become unsustainable
While not every business will choose or be able to use financial hedging, even basic scenario planning can help owners prepare for future spikes or falls.
Training staff for consistent application
A further element of the refreshed guidance is the emphasis on internal training. Written policies only work if frontline staff understand and apply them consistently. NAJ recommends that businesses:
- Build pricing and metal market concepts into induction programmes
- Run periodic refresher sessions when prices are particularly volatile
- Provide staff with simple, approved phrases for explaining price changes
- Encourage team members to escalate unusual situations rather than improvising under pressure
Consistency is particularly important for multi‑site retailers and businesses with both online and offline channels, where discrepancies can quickly undermine credibility.
Turning volatility into an opportunity for differentiation
Although the circumstances prompting the update are challenging, the guidance suggests there is an opportunity for jewellers who handle the situation well. Those who can pair fair, well‑structured pricing approaches with open, jargon‑free explanations may distinguish themselves in a market where customers are increasingly cautious about value.
Volatility can also:
- Prompt a renewed focus on design, craftsmanship and brand story, shifting the conversation away from metal weight alone
- Encourage a broader product mix, including alternative metals and mixed‑material pieces that offer attractive price points
- Lead to better‑documented processes, policies and customer documentation that enhance professionalism
By reframing the conversation from "why is it more expensive?" to "here is exactly how and why this piece is priced", jewellers can reinforce their role as trusted specialists rather than simple resellers of raw materials.
Supporting responsible, sustainable practice
Finally, the expanded document situates pricing decisions within the wider responsibilities of the trade. Sustainable and ethical sourcing, fair wages and compliance costs all form part of the true cost of a finished piece. When metal prices rise or jump around, jewellers may be tempted to cut back elsewhere; NAJ's guidance underlines that long‑term trust depends on maintaining responsible standards even under pressure.
Transparent, well‑explained pricing can help support that goal by showing customers that what they pay reflects not only the metal content, but also craftsmanship, traceability and compliance with legal and ethical expectations.
Looking ahead
The NAJ's refreshed guidance acknowledges that volatility in precious metals is unlikely to disappear in the near term. Instead of waiting for a return to "normal", the association is encouraging jewellers to build systems, policies and communication habits that work in both turbulent and calmer conditions.
By providing structured yet flexible advice, shaped by consultation with the trade, the guidance aims to equip jewellery businesses to protect margins, manage risk and maintain customer confidence, whatever the metal markets do next.
