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[Biztalk] Success in business


Alll, Many of you have responded to me about co-ops and other
methods of sales. I have not responded to all of you because my
business has become very successful. I am selling my products as
fast as I can produce them. This accomplishment has come from an
in-depth analysis of my business. Last December I went through all
my customer account records, show records, internet records, and
advertising records of sales. My business has about 20 years of
records. We analyzed for who was our customer base, categorized
customers into groups, analyzed how much profit each category of
customer yielded, and analyzed how much time was spent on each
customer category. >From this we eliminated wasted time on customer
categories that were not generating income. The first to go was the
category of independent jewelry stores, second to go was the category
of large chain jewelers, third to go was the category of large well
known designers. I found that my largest customer base was smaller
designers and people in the general public that had a knowledge of
I did keep my two largest designer accounts after I
explained to them that I would only sell them stones that I had
already designed and that I would offer them new parcels of stones
first. I stopped all repair work, commission work, and trades of
work for my products. My wife became the Internet operator and I
stuck straight to production and some promotion. We priced our
products to make a profit and sell. For the last three months it has
been a struggle to keep up with production. You want success. Go
straight to your customers, eliminate wasted time on customers that
do not buy, and price your items to sell… The biggest draw back to
my success was the middleman. I am now well back in the business.
We just came back from a buying trip to California where we purchased
about 300 pounds of cabbing rock. At Tucson I bought for recutting
top color 20 morganites, 50 top color heliodors, one nice yellow
corundum, and about 20 other stones. I also bought 500 grams of
facetting grade Madagascar fancy corundum and about 300 grams of very
blue facetting grade beryl from Madagascar. My suppliers are all
happy I am successful, I am happy, and so are my customers.
Success awaits you to if you go get it.

Gerry Galarneau

 I have not responded to all of  you because my  business has
become very successful. 

Dear Gerry: How happy I am for you. Congrats! Sometimes the
solutions are right under our noses but we forget to look at the
simple things. I’m quite sure the analysis was very time consuming,
but obviously very worthwhile. Thanks for sharing your success story
with us. Such successes can only spur us on to do the same.

I’m curious inasmuch as you said you priced your products to make a
profit and sell. Did you adjust your prices upward? or downward?



Kay and All, I adjusted my selling prices strongly downward. All my
pricing used to be according to the wholesale and retail relationship
shared by businesses and manufacturers. In other words I would sell
at one price to the businesses and then mark the prices up to the
retail prices when doing a retail show. This markup was anywhere from
200% to 500% according to what my retailers were charging for the
goods. When the retail to wholesale business relationship crumbled
there was no reason to hold on to this pricing scheme. I now price
at a price to sell. Usually my prices are between what I used to
sell at wholesale and what I need to make to make to cover expenses.
My reasoning is that most of my sales are now ones and twos and I
have a lot more overhead handling and processing each
transaction.Sales have been very strong. Before I started this most of
my wholesale accounts were hounding me that my prices were too high
and that the items would not sell. The problem was they were not
willing to cut any of their profit to make a sale. I had my
wholesale prices right down to the wire where I could no longer cut
the prices and make a profit. My wholesale accounts did not care.
One even told me that when I went out of business and was liquidating
he would purchase all my inventory at 10% of the wholesale dollar.
Needless to say this transition for me was a total change. I wrested
with the change for five years before I finally gave up on the
wholesale and retail relationship. I have made the change and will
not go back.

Gerry Galarneau


While I am happy for Gerry that he has achieved a successful
business model for his own particular business, his methods will not
necessarily work for the majority of list members who are jewelers
and not gem cutters. While the idea of paring down your customer base
to a few good people is nice, in retail it is critical that you build
up your customer base as much as possible. If you don’t have a
plethora of customers walking in all the time buying your work and
telling their friends about how much they like your work you simply
are not going to be successful.

You also need to take into account the differences in costs
associated with running a retail operation with a storefront versus
doing shows, or working out of a home workshop. It is unclear
whether the reduction in pricing Gerry is talking about is a
reduction from his original wholesale pricing or his retail pricing.
It is entirely possible that the retail pricing was too high to begin
with in the mediums he was using to sell his merchandise. However
since the problem that most newbies have in this business is
undervaluing their work I, personally, would be extremely hesitant to
recommend to anyone without a firm track history to lower their

Please also note that Gerry is now having a hard time keeping up
with the work load. This is often an indication that pricing has
gone too low. I have always felt it is better to be able to sell a
few less pieces at a higher markup so that there is still time left
in the day to enjoy my family, look at the flowers for new
inspirations and watch the occasional sunset. Daniel R. Spirer, GG
Spirer Somes Jewelers 1794 Massachusetts Ave Cambridge, MA 02140
617-491-6000 @spirersomes


Daniel makes some good points in his post. I have had a couple of
really poor years in terms of sales since I began to produce my own
line and sell it at retail craft shows. However, my analysis a
couple of years ago, was that

the economy’s performance was much of the reason for poor sales, not
overpricing. It seemed to me, at the time, that I would have had to
radically lower my prices or else make items that sold for a lot

I was determined to keep prices stable rather than lower them to
make short term sales knowing that when things picked up I would be
faced with having t o raise the prices again in order to keep supply
and demand in check.

Yes, I had to make up for lost sales by doing more custom and trade
work and

making new product, but it is now paying off. Sales are steadily

in the higher end areas (over $2,500.00) and the higher markups are
providin g more breathing room, making it easier to transition from
custom to manufacturing.

Customers who have seen my work now for going on three years are
familiar with my prices and comfortable with them. I don’t have to
face the prospect

of shocking them with higher prices and I am slowly removing the
lower end items from my line.

I have wondered if perhaps Gerry was facing the same thing. Perhaps
things would have picked up anyway if he had kept his pricing as it
was or made les s radical changes. The last couple of years have not
been friendly to a broad

sector of the US jewelry market. Let’s hope things keep getting



All & Daniel, What a typical reply of someone looking at a new form
of competition. I know of two other top jewelers working shows and
the Internet that are doing the same thing I am. They have both
taken the price they would charge a jewelry store for the same
product (parts + labor) and increased the price by 50%. Both of
these jewelers are doing very well. They make their manufacturing
charge plus 50%. My records show that whenever I sold a stone to a
jewelry store they automatically raised the price by at least a
factor of three which is a 200% markup. Then they sold other stones
of lesser skill and cut at half the price. When I consigned stones
to them they would increase the price by 3-5 times. The same thing
occurs when a designer sells or consigns a piece of jewelry to a
jewelry store. The price a store tacks onto selling your items makes
them unsaleable. If you are a small manufacturer of quality products
you now can take advantage of this great discrepancy in pricing. The
Internet and shows are the answer. Establish a presence as soon as
you can. Work that presence. I tie my Internet together with my
shows, on line auctions, and special pages to select customers. It
works. In the past three months I have names and addresses of 130
new individuals that have purchased multiple items from me. I get to
them at their leisure in their home with a computer. I build their
confidence by selling quality products at my prices. I explain to
them all the hype and misin the jewelry industry. I tell
them which stones will retain their value, which ones are wearable in
jewelry, I control the education of the public. They hear my story
and not the hype of a marketer. I go directly into the neighborhoods
of the best locations in the world. My sales have been all across
the USA, Canada, Japan, Australia, and Europe. It is building at
such a rate that we are considering new options for production and
new product lines. Finished jewelry. So if you are an individual
working at home this is a very open option to you that works. Do not
let the self interests of others deter you. You will be successful
and independent of other outlets for your product. This not a new
idea. It is the same business model used by most other suppliers to
the jewelry industry. Take a look at any of your suppliers catalogs.
They sell to anyone at the same price. You want a discount you must
buy in volume. You want to buy from me at wholesale it starts at
$5,000.00 USD. Payment up front in verifiable funds. Then we will

Gerry Galarneau

 The price a store tacks onto selling your items makes them

The price a store tacks onto an item it buys is there to pay for
running the store and selling the piece. If I bought something from a
supplier and sold it at the same price I paid for it than I would be
out of business in a month. This is why we laugh at the people who
come in with their copy of the Rappaport price list and want to pay
the price listed on it. It is not up to the supplier or the customer
to determine the price needed to make a profitable sale as it varies
dramatically from store to store. If Gerry were paying the rent that
I do and had the size operation that I do, he would need to run
higher markups as well.

In effect, Gerry has taken himself out of the wholesale market and
become a retailer. As long as he can maintain his operation within
the confines of his home (I believe he mentions working out of his
home), and not grow to the point that he needs the following: more
employees, more insurance (besides his guns), more space, more tools
and equipment, more marketing to pay for the larger operation, etc.
he can continue to charge below retail prices for his product to
retail customers. When these things change he will be forced to
raise his prices. Believe me we don’t charge what we do in our store
because we are trying to rip anyone off. We charge them based on the
costs to us of doing business and a reasonable amount for our salary
and profit.

     I explain to them all the hype and misin the
jewelry industry.  I tell them which stones will retain their
value, which ones are wearable in  jewelry, I control the education
of the public. They hear my story  and not the hype of a marketer 

Gerry, if this isn’t marketing then I don’t know what is. What you
are doing here is marketing yourself in a way that works for you but
it is still 100% marketing, so get off the high horse about this
issue. If anything you seem to be doing an excellent job of
marketing yourself to your current clientele by doing exactly what
any marketing expert will tell you to do: sell yourself. This is not
a new idea, nor a unique idea to you, nor is it any different than
what de Beers or Tiffany’s or any of the chain jewelers do. They go
to the public and present what they sell in a way that works for
them. For you to presume that because you are doing it yourself it
is not marketing is simply absurd. So welcome aboard. Join the club
of jewelers who have found that when you find the right marketing
niche you should pursue it and profits will follow. Daniel R. Spirer,
GG Spirer Somes Jewelers 1794 Massachusetts Ave Cambridge, MA 02140
617-491-6000 @spirersomes >