ColumnistsOct 01, 2025
Peter Smith: Why Vendor Success Starts With Self-ReflectionColumnistsNov 04, 2025
Peter Smith: What Do Birds Have to Do With the Price of Gold?
Smith cautions retailers against expending too much energy on things they can’t control, like the rising price of gold.
Peter Smith is an industry consultant, speaker, sales trainer, and author. He can be reached via email at TheRetailSmiths@gmail.com.
I recently received a call from a supplier for whom I occasionally consult.
The principal partner was very distressed about the ever-increasing gold prices and wondered what he was going to do with his business.
Gold, as we all know, has been a runaway train, going from $2,063 an ounce at the beginning of 2024 to $4,100 as of writing, a 99 percent increase.
For the psych nerds in the back of the room, there’s a believability to the number 99 that doesn’t hold true for 100. The latter feels like we made it up, rounded the corners for hyperbole’s sake, whereas the former is very specific, and infinitely more believable.
Pricing psychology lesson aside, the number is real (do the math) or, at least it was real as of writing.
The other thing that was real was the stress that my guy was feeling about the crazy prices.
There’s an interesting Chinese proverb that goes like this: “The birds of worry and care fly above your head, this you cannot change; but that they build nests in your hair, this you can prevent.”
That, naturally, is what I advised my guy.
“Stop letting the birds of worry build nests in your hair,” I told him.
Alright, not exactly. I said nothing to him about birds, but I did suggest he stop worrying about things he can’t control and, last I checked, he has nothing whatsoever to do with the price of gold.
What he does control is his mindset and the attitude he brings to his business every morning, presumably after he’s checked the price of gold.
Frank Lloyd Wright, when he wasn’t designing the wonderful Biltmore in Arizona (how crazy is it that the Centurion show at the Biltmore is just around the corner?) once said, “The truth is more important than the facts.”
The fact is gold prices have surged beyond our wildest imagination. The truth is the degree to which you allow that fact to affect your business depends on your attitude and mindset.
In “What Happy People Know,” Dan Baker and Cameron Stauth wrote, “We don’t describe the world we see—we see the world we describe.”
The world my guy was seeing was not the world of a happy person.
Assuming you maintain your gross margin delta between your cost and your selling price, that percentage will not change, but it will deliver more dollars than a year ago because you’re getting the same percentage of a higher price. That includes slower selling inventory that you shouldn’t be replacing.
Your owned inventory, including all those non-performing headaches, is worth a whole lot more than just a year ago and that’s an awfully good opportunity for melting and repurposing the cash into a better ROI, whether that’s your best-selling products, or even your slush fund.
Related stories will be right here …
The principal partner was very distressed about the ever-increasing gold prices and wondered what he was going to do with his business.
Gold, as we all know, has been a runaway train, going from $2,063 an ounce at the beginning of 2024 to $4,100 as of writing, a 99 percent increase.
For the psych nerds in the back of the room, there’s a believability to the number 99 that doesn’t hold true for 100. The latter feels like we made it up, rounded the corners for hyperbole’s sake, whereas the former is very specific, and infinitely more believable.
Pricing psychology lesson aside, the number is real (do the math) or, at least it was real as of writing.
The other thing that was real was the stress that my guy was feeling about the crazy prices.
There’s an interesting Chinese proverb that goes like this: “The birds of worry and care fly above your head, this you cannot change; but that they build nests in your hair, this you can prevent.”
That, naturally, is what I advised my guy.
“Stop letting the birds of worry build nests in your hair,” I told him.
Alright, not exactly. I said nothing to him about birds, but I did suggest he stop worrying about things he can’t control and, last I checked, he has nothing whatsoever to do with the price of gold.
What he does control is his mindset and the attitude he brings to his business every morning, presumably after he’s checked the price of gold.
Frank Lloyd Wright, when he wasn’t designing the wonderful Biltmore in Arizona (how crazy is it that the Centurion show at the Biltmore is just around the corner?) once said, “The truth is more important than the facts.”
The fact is gold prices have surged beyond our wildest imagination. The truth is the degree to which you allow that fact to affect your business depends on your attitude and mindset.
In “What Happy People Know,” Dan Baker and Cameron Stauth wrote, “We don’t describe the world we see—we see the world we describe.”
The world my guy was seeing was not the world of a happy person.
Assuming you maintain your gross margin delta between your cost and your selling price, that percentage will not change, but it will deliver more dollars than a year ago because you’re getting the same percentage of a higher price. That includes slower selling inventory that you shouldn’t be replacing.
Your owned inventory, including all those non-performing headaches, is worth a whole lot more than just a year ago and that’s an awfully good opportunity for melting and repurposing the cash into a better ROI, whether that’s your best-selling products, or even your slush fund.
If you are a retailer, the price of gold can help fuel a quick pop-up sale, such as a 50/5, where you offer 50 percent off select merchandise for five hours, or five days.
The higher price can be a good source for a season-long 50 percent off case (remember, cash is king), but don’t trade your customers down to a sale case in lieu of selling them the best solution for their needs.
Ideally, the 50 percent off case provides good add-on sales and additional purchases ahead of need.
There is a psychology attached to this called the scarcity effect, where customers will buy for fear of missing out on a limited-time opportunity.
If your pop-up sale lasts too long, or your sale case is overflowing, you’ll kill the opportunity.
Whether you are a retailer or a supplier, a higher average price effectively means you can afford to sell fewer units and still deliver your projections. That’s important in the retail environment where foot traffic isn’t growing, but the principle applies equally well to suppliers.
While it is easy to become absorbed in industry-speak, the reality is the vast majority of customers (at retail) have no idea about the price of gold or how it might impact prices in jewelry stores.
They have an occasion that needs to be celebrated, and they expect quality retailers to provide a good experience and a solution for their needs.
There’s a Chinese proverb for that, too. It says, “Opportunity always favors the prepared.”
Happy selling!
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