The Frankenstein Tax

Why Cheap CAD and Direct Casting Quietly Destroy Realized Margin

Most independent jewelers believe they understand their costs.

They know what they pay their CAD designer.
They know what the casting house charges.
They know their bench jeweler’s hourly rate.

What they don’t see is the cost created in between.

This paper is about the Frankenstein Tax—the hidden operational penalty paid by jewelers who assemble custom production from disconnected, “best-price” vendors. On paper, this model looks flexible and efficient. In practice, it quietly consumes time, margin, and attention.

And most dangerously:
it feels normal.

The Unbundled Illusion

The modern custom workflow is rarely designed.
It is assembled.

A freelance CAD vendor.
A separate casting house.
An in-house or contract bench jeweler.

Each specialist may be competent on their own.
The problem is not talent.

The problem is coordination.

Every handoff introduces ambiguity.
Every ambiguity requires clarification.
Every clarification costs time—and that cost is absorbed by the retailer.

‍

The Management Tax No One Prices In

In an unbundled system, the retailer becomes the translator, mediator, and project manager.

Time is spent:

• Clarifying design intent that was lost in translation
• Resolving castability questions after CAD is complete
• Chasing timelines across vendors with different priorities
• Resetting expectations with clients when delays surface

None of this appears on an invoice.
None of it is reflected in quoted margin.

But it is real labor.

This is the management tax—and it scales with every custom job you take on.

The Reliability Gap

The second hidden cost of the unbundled model is late accountability.

When a piece comes back with porosity, thin shanks, or structural weakness, responsibility becomes unclear.

Was it the CAD file?
The casting process?
The bench execution?

By the time the question is answered, the retailer is already fixing the problem.

Bench time is consumed correcting issues that should never have existed. That labor is rarely billed back. It is absorbed quietly—oftenrationalized as “just part of custom.”

This is how theoretical margin begins to evaporate.

Why the Math Lies

On paper, the unbundled model often looks attractive:

• Lower CAD costs
• Lower casting prices
• Higher quoted gross margin

But quoted margin is not realized margin.

Once you account for:

• Owner and admin time
• Bench rework
• Client management during delay
• Lost throughput from tied-up capacity

The economics change dramatically.

A high-margin job on paper can become a low-margin—or marginal—job in practice once operational leakage is accounted for.

Time as a Multiplier

Time does more than delay delivery.

It magnifies every weakness in a fragmented system.

As timelines stretch:

• More explanations are required
• More reassurance is needed
• More attention is consumed
• More opportunities are missed

Even when a job eventually closes, the cost of delay has already been paid—not on a receipt, but in time, focus, and lost capacity.

The Pattern, Not the Exception

None of this requires incompetence.

The Frankenstein Tax appears even when:

• Vendors are skilled
• Clients are reasonable
• Everyone is acting in good faith

It is not caused by bad actors.
It is caused by fragmented systems.

And because the retailer is the only constant across those systems, the cost accumulates there.

A Final Thought

The unbundled production model became common because it was available—not because it was optimal.

Normal does not mean efficient.
Familiar does not mean profitable.

The most successful jewelers we work with did not change their craft.
They changed their infrastructure.