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Design Fee?


#1

I haven’t been charging a seperate fee for the design portion of the
commissioned work I do. That stage usually consists of conversation
with the client. Once in awhile a rendering was involved. I find it
hard to charge a fee for what amounts to the sales presentation. But
I’m wondering how others handle this. My instinct tells that
informing a hot prospect that I’m going to charge a fee to continue
this conversation could chill the momentum.

Its disconcerting to spend time with someone, followed by the
necassary legwork and then they bolt. Yesterday I had to refund a
deposit, I felt since I hadn’t yet begun the actual work nor
purchased materials I couldn’t in good conscience keep the deposit.

If you use a design fee where do you draw line between initial
consultation and actual design development? When does the clock
start? What complications have you encountered? Or do you spread
your hidden costs (basically lost time) over all your jobs?


#2

Don’t you love when they do that? In addition tho this, what I’ll
get is somebody that comes in for a diamond buying tutorial and then
leaves to buy it online or at the mall. I’ll spend an hour going
backward and forward on the 4c’s, draw pictures, show them what SI1
looks like, I1, etc… then they bolt. Worse yet, you do all of the
repair work, customer service stuff to find out 6 months later that
they bought something big at the mall. My dad’s (an old world master
jeweler) used to have a phrase. “No appreciation”. I always thought
he was just being old and grouchy. I find now that he may have a
point. Here’s my solution: Have great product, at a great price, at a
great store, with a qualified salesperson who is trained not only in
the various nuances of our business but also a strong closer. (I
learned so much from Zig Ziglar) When you have all of that covered,
and you KNOW deep down that this nervous guy in front of you will
benefit from a buying decision, then SLAM HIM. Get him to take it
home. If you don’t-- what will happen is this: He will spend hours
upon hours going store to store collecting business cards, making
spreadsheets, searching the net, etc only to find himself at the mall
in front of a cute sales girl, spending $6000 in an deeply cut I, SI2
round which spreads like a 3 grainer but weighs 1.00 carats. Oh, it
will have a “cert”. That last senario is not what I call a win-win.
At least not for my fellow Orchidians, and esp. not for the guy. He
just paid an extra $2000 that he didn’t have to.

Sorry for the rant. Back to the topic at hand, I will absolutely
never clients leave with my drawings. Thats all you can really do.
And besides, when they come back, they will have lost the paper and
you wont remember the numbers. Start all over with another 2 hour
presentation. I use a notebook for the drawings, estimates, notes
etc. Every day gets an entry and then if you’re off,your people know
what you were doing with this client, or 3 weeks later you can see
what discount you were giving etc. More importantly, I would suggest
going on Amazon and buying a sales training book. It’s very difficult
to get out of the “I’m in the middle of fixing this ring” mindset and
go into sales mode, but the person in front of you is the one who may
pay your rent this month. You can do the $20 sizing job later. I
watch the guy I work with struggle and it kills me. He’s primarily a
bench jeweler but comes on the sales floor when needed. Nice, nice
guy. A closer, he is not. I can’t tell you how many people walk. This
not only wasted precious bench time, but also his nerves. He didn’t
switch into the “sales mode” quick enough and now has to switch back
to “I’m filing this ring now”. At the end of the day, his frustration
level is pretty high.

Stanley Bright


#3

Hi Neil,

Almost all of my design consultation is done over e-mail.

Usually the e-mail enquiries I get are very enthusiastic and full of
thoughts and ideas about the possible commission. I think that
perhaps the content of my website means that I don’t tend to get that
many flippant enquires. When I do get an e-mail the request is
usually a serious one, one full of excitement at the possibilities of
commissioning a piece.

When I reply to someone’s first e-mail enquiry about a possible
commission I explain that I charge a non-refundable design fee
upfront, which needs to be paid to me before I send them design
renderings. However I will also talk about the design ideas that have
come to mind immediately so as not to kill their enthusiasm by just
talking about money.

I haven’t had anyone complain yet, they understand that it takes
time to design a piece and that I need to see some commitment to the
project before I begin.

I’m very interested to hear how others handle this.

Eva.
Eva Martin
http://www.evamartin.com


#4

Neil:

You raise many good questions. One’s I struggle with myself. I have
jobs that I should have charged a design fee and haven’t. I kick
myself many times over for my lapse.

If it’s a straight-forward job I don’t do it. But if it’s a job
that’s going to require a lot of give and take, sending designs,
waxes back and forth, yup, it’s got to be done. I usually introduce
it after the first consultation. I give the client one free talk
with me to decide if they want to do it or not and then I set a fee.
Usually I “swag” it based on what they want and how much trouble I
think they will give me or not. I find the design fee once paid,
indicates they are serious and won’t walk.

The 60th birthday present I mentioned in an earlier post, I could
tell was going to be a design nightmare. The client was wonderful
but chock full of ideas, had high expectations, and no idea of what
she was asking for. It was going to take a long time to get her to
land on an idea.

Once I purchase materials I ask for 50% upfront, non-refundable.

I find I never charge enough for the design time. I mull over the
choices, how to fabricate, how to push the design further…I wring
my hands, draw, scan sketches, prepare clearly written emails so the
customer can see what decisions need to be made. (I live far from
most of my clients and email is how we communicate.)

Also I factor in how desperate I am for $. Sometimes I will go the
extra mile for free to get the job. And sometimes like the birthday
job, I have enough on my plate, I don’t need the work.

So, how’s this for a non-answer to your good questions?

Carla
www.carlamfox.com


#5

Neil, I don’t think there’s really a right or wrong here. We do
pretty much what you say you’re doing. In my mind charging someone
just to talk to them is awfully mercenary, and kind of repellant,
too. I just consider it a consultation - maybe “shopping” is a better
word - at first. And yes, it might be an hour of time. Think retail:
When someone walks into a store looking for a diamond, and you show
them several and hold their hands, but they walk out (“be-backs”), you
can’t charge them for that specifically. I say that’s one reason
retail charges retail - because of the sales they don’t make. When
people come to me, they come to buy jewelry (not shop). My diamond
dealer says he loves me because I sell 100% of my memos. My clock
starts when the customer says, “Let’s do it.” And I charge them for
everything, including any “extra” time that came before that. I
figure an hour or something more to be normal - 2, 3, 4 hours over
several meetings is “extra”. But that’s just me…

http://www.donivanandmaggiora.com


#6
When does the clock start? 

Once you reach the agreement that they want you to design the piece.
Separate the phases into design and production.

The cost of research, time spent going over specific shades to be
merged, how the curve or shape is to be joined, textures. You should
have already incorporated this into your cost of doing business. Even
if you do it with one of the design programs there is still cost
involved and it has to be covered in your business model.

Sounds like you’re just not used to identifying it to the customer.
Present it reasonably and most will not bolt. Those that do…

Terry


#7
somebody that comes in for a diamond buying tutorial and then
leaves to buy it online or at the mall 

Stanley, usually I can tell when I’m being used in that way, the
clue is when they ask for something specific, most often a G, SI1. So
I offer only ranges and explain the importance and impact of make.
I’ve heard what some jewelers in my wider area are doing is quoting a
competitive price but requiring a deposit to get it in on memo. Wheat
from chaf.

A few years ago I had a lady request a three carat oval with
specifically no bowtie. Flag raised in my head. So I located a good
candidate that met all her criteria and told her price. When she
asked to see it tomorrow I asked for a refundable deposit. She
balked saying, “just to look? I’ve looked at dozens of stones and it
never costs” Well, there you go, a perpetual shopper, not a serious
buyer. I wasn’t in the mood to pay several hundred bucks shipping for
her to ‘look’. Maybe I lost a sale, maybe not. But I walked away not
feeling used.


#8

While I was the in-house designer for Nordstrom I did not charge for
meeting with customers initially, although I did pre-qualify the
client. (let them know what custom work started at over $750) Often,
even with pre-qualifying, I would end up as just a consultant or act
as a liaison for another designer. Sometimes I even helped the sales
staff to order parts from Stuller and then shepherd the part to the
bench jeweler.

When the client really wanted something designed by me the costs for
design development got built into the final retail price. I would
keep track of my time, much like a lawyer will bill their hours to a
client, and those hours would be charged to the clients project
without being called out or identified as a “design fee.”

The lost time is just part of doing business. What you want to avoid
are the customers who are in need of a friend or counseling and want
to just chat with you for hours. You have to be able to get yourself
out of an unproductive interaction as quickly and politely as
possible or you’ll go broke.

Nanz Aalund
Associate Editor / Art Jewelry magazine
21027 Crossroads Circle / Waukesha WI 53187-1612
262.796.8776 ext.228


#9

I personally charge an hourely fee and estimate the fee prior and
reqest the estimate befor we go forword. it isnt refundable but the
customer has free 2 more tweeks in our program.


#10

What stanly is describing is a pure case of letting someone see the
moovie and not pay for it. I recommend to be very brief on teaching
customers about diamonds remember we arnt supposed to be a school we
are supposed to sell and if you create a situation were the customer
feels he needs to do bettter home work,well you lost him so
showgoods talk qality and ask wich one you want. If the customer asks
qestins then you need to adress the question. Other wise make it
plain simple and he she will feel like it’s the right atmosphere to
buy from you.


#11

If you find you sell LESS than 60% of the consults you sit down
with, start UP FRONT with a $100 design fee. If the don’t design but
come back within 6 months to make it, you credit the $100 against the
job, it costs the client nothing extra. Except if they do nothing,
then you’re paid for your time to sit with them.

David Geller

P.S. It is NOT mercenary to charge for your time.

David Geller
JewelerProfit
510 Sutters Point
Sandy Springs, GA. 30328
(404) 255-9565
www.JewelerProfit.com


#12

Nanz

You are right but also not in the same boat.

You said two things:

A. While I was the in-house designer for Nordstrom I did not charge
for meeting with customers initially, although I did pre-qualify the
client. (let them know what custom work started at over $750)

B. The lost time is just part of doing business.

“B” can be correct but ONLY If “A” is charged.

Most people on this forum, if they removed material, are charging
$185 to manufacture a ring. They THINK, that with materials, it gets
to $500 that a GREAT DAY.

It’s a great day for selling material, but not for the labor.

When I had my store, using y book, our AVERAGE Custom design fee,
LABOR ONLY was $750, materials was on top.

There is not one price, obviously. But many of these people need to
charge more or charge additionally for time.

David Geller

David Geller
JewelerProfit
510 Sutters Point
Sandy Springs, GA. 30328
(404) 255-9565
www.JewelerProfit.com


#13
we arnt supposed to be a school we are supposed to sell 

I have educated my customers for years and I have no problem selling
them. As a matter of fact the more informed my customers are the
better customers they become. This attitude is pretty old school
these days. If you don’t educate them the right way, then they’ll go
elsewhere and become miseducated.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
www.spirerjewelers.com


#14
The lost time is just part of doing business. What you want to
avoid are the customers who are in need of a friend or counseling
and want to just chat with you for hours. You have to be able to
get 

I don’t think the original poster of this thread needs this
explained, really. But for the thread… We are a trade shop, and only
sell retail by referral - that’s different from a full-blown retail
store, or someone who does shows. Yesterday a couple came by who are
regulars - once a year, anway, but we know them. We sat for almost
two hours, and we were talking about jewelry, not “chat”. In the end
I have about $75 worth of work out of it. I could have sold a $50,000
diamond in the same time. Do I begrudge it? Not even a little bit. We
take care of our customers, we guarantee everything. We are their
"Family Jeweler". They know that I will take care of them, and I know
that they will spend more money over the years. That is the symbiotic
relationship that any selling should have, at it’s best. It’s the
basic premise of business, if you want to sleep nights: “It’s not how
much you make per hour, it’s how much you make per year.”

http://www.donivanandmaggiora.com


#15

I give customers a free hour of consultation. Because they may never
have met me before, and what they bring me may be something I simply
don’t do, but it may turn out they like something else I do that
they may carry away with them. But I also have a contract, that says
their first hour is free. And after that the clock starts. It helps
to be verbally specific, “Sure you can come to my studio to talk
about wedding rings, and your first hour is FREE” reminds them that
if they want a studio tour or whatever else, time is well, time.
When they leave after their first hour either the contract is signed
or it isn’t.

A contract is important, because, has I have learned the hard way,
that first consultation may go swimmingly, and then they get home
and have other thoughts they want to incorporate that they think
won’t be that much of a bother, but YOU realized just changed the
fabrication in major ways.

I also just added to my contract (for the back set drivers), I will
be glad to send them updates on how a project is going, and send
images, and updates, but this is also considered "consultation"
time. Customers forget that every email that we respond it is time.
I do not work well with someone breathing down my neck, but I
realize the necessity of trust when work is being delivered over a
website. So yes, I will work with their comfort zone, as long as
they also recognize that they are paying for me to take the pictures
of my work along the way.

I also give them some responsibility. I tell them that their special
order is made as accurately as I can make it based on their verbal
description. But that they should be knowledgeable about my specific
style as posted on my website, and that I will not deliver anything
that is below the standard of what is posted on my website. This is
a result of what I dubbed the “Lord of the Rings” phenomenon. They
know they want something really special, which is why they are
having it custom made, but they can’t be entirely specific about
what they want. They only know they want it to have some unearthly
"glow" about it. And though I feel my work is pretty good, I haven’t
seen any of it “glow”.

Yours Truly,
Elizabeth R. Agte
Jewelry Artist
www.agte.com


#16

Hi Stanley and Neil and others;

somebody that comes in for a diamond buying tutorial and then
leaves to buy it online or at the mall 

I just had a customer come to one of my accounts with a fist full of
printouts from internet sellers and a quote from someone in NY City.
Think I’m going to waste my time coming up with a quote? Think it’ll
rain frogs tomorrow?

David L. Huffman


#17
It's not how much you make per hour, it's how much you make per
year.

John, love your quote.

I wonder how many folks look at “per year” and say "Not good enough,
must do something different?

David Geller

David Geller
JewelerProfit
510 Sutters Point
Sandy Springs, GA. 30328
(404) 255-9565
www.JewelerProfit.com


#18
I also have a contract, that says their first hour is free. And
after that the clock starts. 

I have done only a handfull of custom pieces, but in each case the
customer has wanted a price up front (not unreasonably). In one
case, I had to change the price afterwards, as I have a major
tendency to underprice before the work is done. Most of the time, I
end up working too much for too little.

So my question is, how do you arrange with the customer so they feel
comfortable, but the final cost isn’t known until the work is done?
Would you be willing to share this contract? I have to find a
solution-- I’m really bad at guessing how much something should cost
before I’ve done it.

Noel


#19
I just had a customer come to one of my accounts with a fist full
of printouts from internet sellers 

It’s one thing to shop, we all do it, its quite another to be
boorish about it. But at least you know when you’ve got a time waster
on your hands. Often they have no intention of even considering you
for the actual purchase, they just want to see what they think
they’re getting. I treat them politely but sandbag their requests.
And its not an emotional reaction on my part, its a matter of time
usage…I’ve got stacks of work that pays or a brain picker that
won’t. Honestly, these days I don’t chase diamond sales anymore,
margin keeps shrinking and the time devoted is hardly worth it. Total
weights are a different story though, still healthy.


#20
It's not how much you make per hour, it's how much you make per
year.

You got it John. I service my clientele faithfully all year in hopes
I’ll get the big purchase at Christmas and other events. I give em
little bones, it could be a discount or free work. People appreciate
when you show your loyalty to them. With all the ups and downs in my
carreer its clear I wouldn’t be here without them. Repeat purchase is
the core of my business model.