Dear Ricky
The first question is: =93Are you happy with the income you get from
your work?=94 If the answer is yes, great.
But you contradicted yourself and you don=92t know it and you
contradicted yourself to the positive.
Firstly, you wrote =93I don’t see how trust factors into what price I
can charge though, because the customer wants what I can do for them
and if they feel that my price is fair, they buy, thereby setting the
price I can successfully charge.=94 No they don=92t set your price, yo=
u
do. Learning salesmanship will turn more customers into =93yes=92s=94 =
than
no=92s.
True, they can decide not to buy but that does not necessarily
determine what you charge. The =93end of the day=94 receipts determine
that. Your job is not to sell EVERYONE. Your job is to sell ENOUGH
people at a price that will give you the income you want. Plain and
simple. You say people won=92t pay, but then you wrote: =93I have wor=
ked
all along with Stores like Tiffany=92s, Cartier, Gordon’s, and
Zales=85=85… that have customers who are knowledgeable about the
differences, have a discerning eye for nice work, and usually don’t
mind paying as long as it’s delivered on time and also referrals from
satisfied customers.=94
What you said is =93the customers don=92t mind paying=94. The companie=
s
you mentioned aren=92t cheap on what they charge; in fact Zales does
almost a 4 time markup on what trade shops charge them.
Let=92s go back to the stores. Think about this: When a customer comes
in to buy a >product< the store probably sells 20-40% of the people
who come in.
But when the customers come in for a repair the stores sell over 90%
of them. It=92s not the PRICE; it=92s the trust, salesmanship and fine=
sse
of the sales person. Knowing that 90% of the customers will pay, why
charge $5 to engrave when you could charge $15?
Also let=92s look at the numbers. Let=92s say that at $5 to engrave yo=
u
sell 90% of the 10 people you talk to. Ninety percent is 9 customers,
at $5 each brings in a total of $45.00.
Now let=92s say you go to $15. I have found when you raise your prices
about 5% of customers will leave the store and not have the work
done. But in your case let=92s say a whopping 40% say =93No Thanks.=94=
That would leave only 6 customers who would pay the $15. Six
customers times $15 each brings in $90.00! That=92s double the income
for 40% less work.
You=92re not trying to sell EVERYONE, just sell the right number. Our
store went from $5 to $10 minimum to engrave, no discernable decrease
in numbers of engraving customers. The same thing at $15.00. Watch
batteries were the same. Went from $5 to $15 and still do the same
amount of watch batteries.
There is a threshold where customers will say =93you guys are high as
a kite and ALL of the city is going to revolt.=94
But I haven=92t met any jewelers who even came NEAR that threshold
number. It IS out there but I promise you that you won=92t be charging
that =93pie in the sky=94 number.
People who have bought my price book were scared because of the
increases were high but after using it they weren=92t scared any more
as raising their prices brought in between 50% and 100% INCREASES in
shop sales. And that included the customers who says =93you guys are
high as a kite=94
Here are just some of our prices we get:
Engagement ring smaller: $22.00
Half shank on same: $115.00
6 prong tiff head, wg, installed & set 1 ct diamond: $162.00
Carve & cast (no metal) shadow wedding band next to customers eng
ring: $325.00
Bead set (with hole already drilled) $18.00
Bead set (with out hole already drilled) $32.00
Channel set $18.00
Size man=92s class ring smaller: $68.00
Solder rings together at bottom: $20.00
Minimum to machine engrave $15.00; 75 cents per letter (you get 15
letters for the $15)
Minimum charge to hand engrave: $53.00
One letter monogram: $63.00
Family Crests: $488.00
I post this to give you strength to raise your prices as until they
make robots, increasing your prices is the only way to increase your
income.
I have been in the industry for 40 years and I have yet to find a
craftsperson that closed up shop because they wee the HIGHEST priced
craftsman around. I have only seen people close up because they
charged too little. The companies you mentioned are not cheap and
when they take in work they make really good money from it. The
companies that are doing well are never heard from. You only get to
meet whiners, people who are bad mouthing their careers. When you
start to ask people who are doing WELL how they do it you=92ll find
they are charging premium for their services.
I travel to stores, see their books, do seminars and I can tell you
a secret of the jewelry industry:
=93THE PEOPLE WHO MAKE THE MOST MONEY ARE THOSE THAT CHARGE THE
HIGHEST PRICE=94
Plain and simple. There are two types of craftsmen out theRe:
A. I will charge based upon what I think the market will bear and
never even try for a month higher prices as I believe if ONE CUSTOMER
walks, all will walk. My income will be determined by what I ask
customers to pay for my services and I will ask the bare minimum to
reduce customer whining.
B. I will charge prices based upon a time study and the prices
charged will be based upon how much money I WANT TO MAKE. I do not
care what the competition charges for the same services because my
craftsmanship, service and guarantee is the best in the area and
even if one area in these three is weak, I will make up for it in one
of the other two. My prices will be based upon what I want to make
and not what the customer wants to pay. After servicing the customer
they will forget the price, only think about the beautiful job I do
and they will send referrals. This will be the mark of how successful
I am in my business. Happy customers, good cash flow, increasing
sales and referrals tell me that my pricing practice is indeed
correct. I constantly learn selling techniques so as to increase my
closing ratio.
Just choose =93A=94 or =93B=94. It=92s just a choice you make.
David Geller