Gold was $1285 this morning (6/21/13)and is $1294 right now.
Kitco.com is a place to watch gold prices, you can even download
onto your computer a moving tape showing gold/silver/platinum prices
all day.
There was a video interview today of a professional gold trader with
a larger firm. Their target is for gold to bottom at about $1150.00.
So its got about $150 to go. They also see silver down to about
$19.50.
Kitco Video
Several jewelers have called now wanted a lower priced repair book
so they could charge less. A few thoughts:
Your labor costs did not go down Charlie!
You still have a lot of findings and sizing stock that you bought at
higher gold prices so your costs of material didn’t go down.
Unlike looking up the price of a car customers don’t have a place to
see what a lobster claw costs today. Do they know gold went down?
Sure. Do they know what a lobster claw should sell for? No Way!
Most jewelers calling feel guilty charging the book price. but you
don’t feel guilty not lowering your price on gold or silver jewelry
thats been in the case at higher prices, do you?
I do not plan on making a lower priced repair book unless I see
$1000 as a new support/resistance level. This could very well be like
in the 1980’s where gold was at $850 and everyone called for “$2000”
and it dropped by over half. But times are different that 1988 (or is
it?).
So lets go back to what would I suggest? First off reread the bullet
points above. Its all true. So I wouldn’t just willy nilly lower
prices because you feel guilty. Repairs are still trust sensitive not
price sensitive.
If repairs have fallen off some its not because of your pricing its
because you and every jeweler in America have bought and melted every
broken piece of jewelry from your customer base. There are certainly
less items to repair. But many jewelers are still buy with repairs
and keeps the checkbook balance positive.
Over 80% of jewelers I speak to say Custom design is still huge with
an average sale of $1500.
So if you just have to feel guilty and lower your price first you
must be selective. A few good examples:
Making a ring smaller has no gold in it, only labor. Why does this
price have to go down?
The same is for a solder or retip. There’s no material cost of
substance here. Keep the same price.
In making a narrow gold ring larger I figured the cost of the gold
piece to be about $4.00. If you look on page 100-1, sku # 1008 one
size larger is $63.00. Now look at the “JLRC” code. drop the first
“9”. Do you see 51.00 dollars? thats the retail labor to install that
piece of gold, size it and polish it. So subtracting the $51 from
charge of $63 gives you $12.00. The twelve dollars is what I’m
selling the $4.00 cost piece of gold for.
So out of a $63 charge to size a ring larger $12 is the gold. If
gold drops 25% then the $12 piece of gold should sell for $9.00 The
$51.00 in labor stays the same. $51 + $9 = new selling price of $60
rather than $63. Three bucks! That’s 4.5% drop in price. So don’t
start willy nilly dropping prices here. Especially since you’re
probably using gold you bought 2 months ago to size those rings.
if you need to discount something discount items in the book that
are more material than labor
Lobster claws might be one, shanks another.
Shanks are on page 100-22. Half shank, 2mm wide sells for $$254. The
JLRC (jewelers code) for the labor is $98 retail to install the gold.
That’s 2.5 times more than making the ring smaller. Subtracting the
$98 in labor from retail of $254 shows the 3 time markup on the gold
is selling for $156. I figured the cost at a third at $52.00. I went
to the Stuller site just now and a medium half shank SH7-1844S - (the
picture loos more like a 3/4 shank) costs $42.00. If you figure less
gold for a half of a shank but more $$'s for shipping lets keep the
half shank at $42. My old cost was $52. Ten dollars less in selling
price for the gold only.
So $42 x 3 = $126 to sell the gold half shank. Labor didn’t go down,
did it? Its still $98 to install. $126 for the gold + $98 to install
= $224.00 selling price. O.k. that’s an 11% reduction in price.
Don’t go willy nilly dropping all of these prices. So if you just
have this terrible urge to discount my suggestion is to not discount
on pure labor.
setting, soldering, sizing smaller.
On heavier items like shanks, clasps, etc give the customer 10-15%
off.
You’d be better to be more worried about the 10 people who look in
the case and 7 leave the store (only 3 buy) than worry about 10
repair customers come in and only 2 leave the store leaving 8 to say
“OK, fix it.”.
You should worry more about all of that unsold, over 1 year old
inventory than a whining customer over a half shank.
To be happy with the shop it has to be profitable and you need more
work in the jewelers box than they can finish.
if the work load is low advertise for crying out loud!
Remember video training on our repair book is free and on our
website: http://www.ganoksin.com/gnkurl/ep80d6
TRAINING
Password is geller
Sincerely
David Geller
JewelerProfit.com