With gold over $1150 per Ozt, I wonder what other jewelers are
experiencing? The demand that is driving up the price is not coming
from jewelry, but what is the effect on jewelry demand? I have had
some customers who thought they could not afford gold jewelry who
were surprised that the price was not higher, and bought. Also have
had customers who were totally unaware of gold prices and did not buy
due to sticker shock.
One thing that I find very strange is that these record prices are
not being especially sensationalized in the news media. Advertising
for gold as an investment or to buy old gold for scrap is keeping
the value of gold in the media, but it does not seem anything like
the overall interest that went with the surge in gold and silver
prices in 1979-1980. Back then it seemed to boost jewelry demand. In
general the advertising messages don’t seem to be saying anything
that they were not saying several years ago.
On the whole, I’m not seeing very much sticker shock that I could
attribute to the base market. Its more a matter of emotional
recession. By that I mean the perception that they should not buy
expensive stuff right now. When I meet with such a mindset, that’s
the time for the velvet hammer.
The velvet hammer works often enough because if they are in my
store, well, they came in for reason, didn’t they? Particularly since
I’m a destination and not a walk by location. A purchase is on their
minds, even if its so far back it takes precision forging to bring it
forward.
What is the velvet hammer?
Its going thru the whole sales pitch process, figuring out exactly
what the client’s needs are, addressing them thoroughly, then when
they are on the precipice, offering the price-and/or-package that
motivates them to hand over the plastic.
For those who believe the price is the price is the price, you may
have trouble with that. The key to survival in this kind of an
economy is cashflow. Do what it takes to make sales so you can pay
your bills. It might not be easy to swallow but it nourishes the
body.
In Canada with the difference in the dollar in comparison to the U.
S. dollar, gold is over $1200.00/oz. I do not think that I have seen
it this high in the 33 years that I have been in the jewellery
business. People are still buying but cautiously. Not necessarily
because of the price of gold but because of the media and the
economy in general. In my opinion if the media would lay off all the
doom and gloom this economy would level off and then we would have a
chance of survival.
This has been a learning experience for all businesses. We all need
to take a hard look at where we are headed, both in business and
personally. I think it is time to get back to basics.
Of course this is just my opinion.
Take care, Paul LeMay, Bracebridge, Ontario. Canada.