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Going retail... Sooner than expected


#1

For the past 6 months we’ve been gradually shifting our efforts from
trade shop to retail establishment. We moved to a bigger location,
bought a couple cases, etc… we planned on the transition to be
gradual, however, on Friday we we’re informed that the corporation
with whom we have 75% of our business with has decided to drop all
outside contractors, including us. Effective Monday morning we will
no longer be authorized to continue our business relationship.
Needless to say, we are a bit concerned… so if anyone has any
advice as to how advertise locally or any other advice, I’d be most
obliged.


#2

Hello Drew;

... we planned on the transition to be gradual, however, on Friday
we we're informed that the corporation with whom we have 75% of our
business with has decided to drop all outside contractors,
including us. 

I’ve found myself in a similar situation. Of the two local accounts
my trade shop did work for, one has closed recently, the other closes
the end of this year. That takes away about half my income. That
market will need to be served, and I want it. Fortunately, I’ve been
building a base of local customers through referrals for some time
now. It may seem unethical to have served two competing local
accounts, but they were ok with it, and they both got the same
prices. I also did no advertising, had no signage, and kept a low
profile. Any private customers I got either wouldn’t have shopped
with them for various reasons or came to me from other locations by
referal. Neither of the local retailers did much to increase my
business, so it would have been foolish to stay tied to their coat
tails while they ran their businesses down.

My advice, now that gold is down in price, start building inventory
if you have to borrow money to do it. Introduce yourself to all the
local hair dressers. Maybe even ask them if you can put a small
display of earrings in their place and give them half the margins on
sales. Keep a bunch of your business cards there. Women are likely to
become your biggest customers, and women who have money to regularly
have their hair done usually are looking for someone reliable to
repair their jewelry, and that leads to sales. Make custom work your
specialty, there’s not much competition for that from the mall and
chain stores.

When you can afford it, look for the local publications for
advertising space, especially the ones that are set out for free in
coffee shops, restaurants, etc. Word of mouth is the best
advertising, but it takes time. Make sure you have a sign that states
clearly that you do repairs and custom work. If you can, stock your
store with as much original work as possible, one-offs and limited
production, but be willing to carry some manufactured stuff to fill
out the inventory. If you know other jewelers that might have stuff
they’d like to sell but don’t have a venue for, see if they’ll
consign it for a generous split. Best of luck, keep us posted on your
progress.

David L. Huffman


#3

Don’t be embarrassed to charge legitimate retail prices. Your costs
for retail are higher so the price has to be higher too.

You have to develop a message to the public. Something like “deal
direct and save” might not be as profitable as “deal direct and get
better service”. If a customer is discount conscious only, he
already has tons of options. The service oriented customer will be
extremely loyal if you service him/her well. But you really have to
accurately assess the retail climate in your area first. Don’t depend
on your own impressions alone, get input from other merchants etc.

on Friday we we’re informed that the corporation with whom we have
75% of our business with has decided to drop all outside contractors,
including us You don’t know how lucky you are to have been given
this, some companies would have just run up the bill and not paid.
Dropping all contractors MAY mean they are in trouble. Or it may just
mean they want to do everything in house. Being that it is a sudden
event I might think the former. Yeah I know, I’m being
cynical, I am in the jewelry business afterall.


#4

perhaps the closing business will give or sell you their customer
list

Mark Zirinsky
denver


#5
It may seem unethical to have served two competing local accounts, 

I’m curious as to why you think that marketing your product to
competing customers could possibly be seen as unethical.

Al Balmer
Sun City, AZ


#6

Hello Al;

I'm curious as to why you think that marketing your product to
competing customers could possibly be seen as unethical. 

I don’t perticularly see it that way, but there are many in the
retail end who have the habit of thinking that a subcontractor is
really just another kind of employee and not a fellow businessman.
The think they have a right to expect some kind of “loyalty”, feeling
that, if they give you their business, you should give it exclusively
and provide them an advantage over the competition. Some
subcontractors I know comply with that. But nobody has ever offered
me the financial incentive to commit to such a relationship.
Obviously, one can make any kind of business arraingment one wishes
as long as it’s legal, but pardon me from thinking like a
businessman, I think that it should come with a price (a reciprocal
commitment), as do vendors who give retailers regional exclusivity.

David L. Huffman


#7

Hi Mark;

perhaps the closing business will give or sell you their customer
list 

Customer list? You speak as if these people actually know what
they’re doing. They are closing. They are taking the “opportunity” to
retire. I have a customer list. Once they’re both out of the picture,
I will not only be front and center in this town, I will take out my
customer list and mass mail invitations to my “grand opening” and
everyone invited will get a significant discount off the regular
retail price of my merchandise. After that, I will go after markets
in the outlying region, markets that the previous retailers didn’t
seem to interested in.

David L. Huffman