Hagglers at your jewelry booth

As a credit card merchant, you are technically doing a legal no- no
by offering a cash discount to discourage a credit card sale. Read
the fine print on the merchant agreement contract you signed and
you will find that rule.... 

I believe this depends on your particular contract and how you
structure such discounts. I think the contracts generally allow you
to give a discount to cash purchasers. What you cannot do is have a
base price to which you add a fee for card purchases. At least that
is how my merchant card services agreements worked the last time I
read them.

Mary Ellin D’Agostino, PhD
www.medacreations.com

Holly,

If you feel that your prices are fair for the quality, then don’t be
embarrassed. State the prices are as marked.

I used to have a sign in my case that said:

“Artist is not mentally equipped to haggle. Prices are as stated.”

Never ever had a haggler after that and that has been over twenty
years of doing shows.

Remember if you are talking with someone in front of your booth,
other ears are listening. Don’t undersell yourself to one obnoxious
customer because others in the immediate area will expect the same.

This is just my opinion and experience.

Larry Silva
Da Gama Designs

Hi,

I LIVE in haggler country, so I will share some of the methods I
use, depending on the customer type. I always assess the customer
before deciding how to proceed with my sale.

  1. I tell the customer that the selling price is the only one that I
    can afford to sell my work as, and continue to be an artist and make
    more art. I always look them square in the eyes while delivering
    this line. I use this line on the type that would understand art,
    and be able to give me the respect I am due as an artist.

  2. I gasp and ask for a moment while I fumble with my calculator. I
    tell them that this is the old, not-updated price and that my
    pricing mistake is their good fortune. I look downwards when
    delivering this line. This is good for the people who like to
    outsmart others.

  3. I tell them that they will receive an X discount towards the next
    purchase if they join my customer club, and flash a bright smile.
    This is good for the person who is dying to buy the piece but needs
    to get something for making the decision.

  4. I explain that art goes beyond the materials used. As an example,
    I cite the fact that Picasso’s paints and canvas did not cost him a
    million dollars. So, I continue, it is not what you havebut what you
    make with it. If I need to expand this thought, I ask them if they
    bought their dress based on the price for cloth per meter. Then we
    both have a yuk yuk, and I can wrap up the sale. This is good for
    people who need to make the price-art connection. It is an "aha"
    moment.

  5. If the customer from the above persists and tries to drive the
    worth of the piece down anyway, I hand them some cheap beads or
    scrap copper and tell them to go ahead and make it themselves. The
    materials are on me! I say this with a kind smile. They certainly
    get the point as they start to try and figure out how to make
    anything! Another “aha” moment!

Last of all, I always keep in mind that I do not have to sell, at
all cost. Another customer will come along!

Keep shining,
Devora

Hi all - I’ll chip in with a view from ‘down-under’ Perth, Western
Australia, where a good proportion of my sales are made to
passengers from cruise ships who come to visit. The port of Fremantle
sets up a small shopping facility (The criteria are that all items
for sale should be Australian made and use Australian products (i.e.
not Taiwanese/Chinese product)) in the passenger terminal, two small
stalls sell hats, T-shirts and other souvenirs, another sells good
opal jewellery, another sheepskin products - and I sell jewellery
featuring natural gold nuggets, local South Sea pearls and other
Australian stones and Some of my product is medium to high
end and nothing is less than around AUD$200.

I price my product carefully according to a formula - cost of
materials + 15% for consumables, plus labour/time, and then my markup
to retail pricing, which has to cover merchant fees and possible
discounts.

The passengers mostly come from the US, Canada, the UK and Europe,
and I’ve learned you can NEVER pick what sort of response you will
get.

One shipload would not even say ‘hello’, another lot looked as
though they really did not have much spending money at all (brought
back 24 packs of coca-cola from the supermarket) another ship seemed
to have a really wide range of rich and not so rich passengers,
another was really friendly and bought happily.

As to haggling: most nationalities will try a bit. They seem to have
most success with my prospector friend, who comes down with me to
man our setup and sell the nuggets he’s found over the winter.
Something in his manner seems to trigger the ‘well, what’s your best
price’ questions. and he caves in. I simply say “everything in the
display is a one-off, hand-made by me. You won’t find anything else
quite like it anywhere else in the world; and I know my work isn’t
over-priced.”

This usually does the trick and I rarely have to discount.

On a slightly different note, a friend (Australian) took a cruise to
Samoa and Fiji. They asked the price of some souvenirs, and one
shop-keeper told them “today, the price is X, tomorrow, it will be
twice as much, because the American ships are coming in and they
like to haggle!” This is not to say we Aussies don’t haggle - we do!

Jane Walker
Australian Natural Gem Jewellery

For those of you raising your prices just so you can discount it,
in my book this is at best ambiguously unethical (at worst
downright unethical). 

Bargaining is cultural for some. There also is a social aspect.
Negotiation is a skill. It can be pleasant interaction with another
human where you both feel like it was a win-win. Play the game anyway
you want. That is all business is. A game where we move stuff around.
Smoke and mirrors. Some people were raised to bargain. Not to long
ago negotiating the price of a new automobile was common practice.

This subject gets so blown out of proportion. When I bought my house,
my real estate agent got the price down by $5000 from what was being
asked. Day of closing he negotiated another $5000 discount because of
work that was going to be needed to be done.

Setting the price that you want and being able to have a little
leeway is hardly “ambiguously unethical”.

There was a news program, they sent men and women to get car repair
estimates. guess who got higher prices? Seems like a smart woman
would at least consider bargaining if she thought it was possible
that whether intended or not, she was getting a higher price than a
man would.

Perhaps it is just being able to be flexible rather than ridgid. It
is not life or death. If it was such a moral issue tell your customer
to feed the poor instead of buying a bauble.

Maybe it is just me, but the way things are going in this country
with our economy, it might become necessary to negotiate. I have been
planning to get a long term lease on the property I rent for my
business, and I will be asking for a short term freeze on my rent. My
business is down quite a bit from last year. In my first post about
this I mentioned I told my staff not to discount now because metal
prices are so high we cannot replace at the same price. In effect if
we do not reprice all the jewelry they are getting a discount. When
some have asked if we can do better that is what they are told.

What would be interesting would be if there was some way to track who
does better in the long run, those that discount or those that do
not. When the economy was better a few years ago, if someone bought
$300 of sterling jewelry, there were times I would give them a
discount without them asking. Perhaps it is just my imagination, but
I feel people get warmer towards me when I am nice to them, and a
discount seems to qualify as nice thing to do.

I do not know if could make more money by not discounting, but I am
really clear about how many repeat and loyal customers I have.
Crossed my mind recently that because I am flexible, people will
come to me when times are not good as they know I will do what I can
to try to make things easier. I have told some people that I give
discounts too that something they are looking at cannot be
discounted. They are always fine with that.

If a customer seems really interested in something and it is a high
enough dollar value, I have closed many sales by waiting as long as
I could to see if I can close them without discounting and to move
toward closing, I would offer a discount either to get the person to
commit, to get them to purchase two items they cannot make up their
mind which one to chose, or my time is more valuable then the small
amount I lose in discounting just to get them out of my store.

I do not confuse bagaining with self worth or self esteem. Just the
way I roll. Good food, rock and roll, make jewelry. I look forward to
going to work every day.

Richard Hart

I know you all want to be creative about it but what's wrong with
just saying no? 

Nothing is wrong with saying “no”. Haggling is one of those games
that some people will play and others will not. I understand that
some other exhibitors at the show might be annoyed that if I allow
the hagglers some success, that that only encourages them. But there
are lots of games that some of us play to our advantage and that
others would rather not.

This thread has been very useful. Some very good ideas and reply
lines about how to hold your ground. One thing I would like to point
out is that “educating” the customer about my time and costs is
something I prefer not to do. How much I make on a piece is
confidential. I would rather not talk about how long something took
or how much it weighs. I will talk about that if cornered, but I
don’t want my customers thinking they can buy my work by the gram or
hire me by the hour. Can you imagine a painter selling art that way?

Stephen Walker

Doc,

I agree with you about having an allowance built in concerning your
regular clients as well as the first timers that ask for a discount
in a nice way. Just make sure it is not a large padding or discount.
As for the rude and pushy people it is easy to educate. Tell them you
will match the discount that they are willing to allow their boss to
deduct from their hourly pay when they can show proof of the reduced
pay. Maybe that will get them to think of what they are asking for.

Greg DeMark
www.demarkjewelry.com

Just make sure that you are clear that you are reporting your cash
sales, so the IRS doesn't come after you!

Yes, Beth! Everything gets reported, I’m not getting into shady
business.

First off, I'd be really careful about something like offering a
cash discount, as that will likely violate the terms of your
merchant agreement should they find out. 

Karen, thanks for pointing that out – I did not know that this
could be a violation and I had no intention on pulling the wool over
anyone’s eyes.

Second, the only reason to "make them feel special" is if you want
to encourage haggling. 

I try to make every customer feel special and feel good about their
purchases in general. But it is not my intent to wheel and deal with
them or encourage haggling.

Don't you think my work is worth it (explaining the time and
materials) Personally, I would walk away if any seller was
confrontational to the level of asking me to asses their work and
perhaps not liking what I have to say 

R.E, I agree, never be confrontational with a customer – I usually
will say such a thing in a playful way. I have no intention on
debating the quality of my work and my value as an artist and my
conversations are always pleasant and never ugly.

This is how I take care of making people feel special. We have a
repeat buyer program. It is carefully explained that this is how
we reward buyers for purchasing more than one time. 

Ruthie, great idea. I do offer my repeat customers a 10% discount
for bothering to come and see me at a show anyway, so this idea fits
right in with what I am doing.

Richard, you asked if I use gems and occassionally I do, but I don’t
tend to haggle or ask for discounts. I’ve always wanted to support
the individual business owner and I didn’t want to insult anyone,
(This is not to say it is wrong - but I guess we are all out to make
a buck and I try to respect that in my own little way)

Thanks for your input.
Holly

I know you all want to be creative about it but what's wrong with
just saying no? 

I’m classless.

I will give discount always if I’m asked. I just want to make the
sale. That has caused my to have some high end customers who always
get a good price, but they come back all the time and they buy the
style I like making.

They know they get a good price, but because they buy that style, it
allows me to make more complex work. And I still make a profit. Good
thing, that, profit…

Cheers, Hans Meevis
http://hansmeevis.blogspot.com

I also have a retail store, and just thought I’d add my 2cents as
well. We have always given that 10% discount to our “frequent
flyers”, on merchandise only, never on repairs or services. Our
locals and frequent visitors here love it (tourist town). As for
those who think our prices are high, at Christmas when asked “how
much off?” I simply explained to them that as gold prices are now so
much higher than when I made the piece, they are in actuality
getting a nice discount. We don’t go around repricing things every
time gold goes up. Also, we are not a chain store, these are not
pieces made in China, bought and sold on the cheap. (I really loved
those chain store ads with the disclaimer at the bottom that said
"Original retail prices may not have resulted in any actual sales")
We also don’t mark things up 50% to mark them down 25% and make the
customer feel good. We price things fairly. On the other end of
things, I’ve also had people ask “what’s wrong with this piece, the
price is too low?” Too cheap, and it must be defetive in some way. To
which I simply reply “Well, I got a great deal on that stone, and I’m
passing the savings on to you!” OK, enough already.

Stef Shoemaker, Bella Creations

I think ultimately the answer to this is one’s state of mind… No
right or wrong, only how you take it. There is a difference between
stock work and special order work, though - not the exact question,
but it matters. If someone asks you if you want to move an item in
the case right now for some price, that’s one thing. When someone
contracts with you to make something specially for them and then
tries to get a cut after the work is done, that’s quite another.
That’s when a blank stare is appropriate…

http://www.donivanandmaggiora.com

My policy for hagglers is to raise the price, that usually stops them
dead.

Jennifer Friedman

Stephen,

I don't want my customers thinking they can buy my work by the
gram or hire me by the hour. Can you imagine a painter selling art
that way? 

This reminds me of a saying I once read that was quoted by Harold
Tivol. “The difference between the price of gold and the price of
fine gold jewelry is like the difference between the price of paint
and the price of a Picasso”

Greg DeMark
www.demarkjewelry.com

Daniel,

For those of you raising your prices just so you can discount it,
in my book this is at best ambiguously unethical (at worst
downright unethical). Just because the big stores do it doesn't
mean you have to stoop to their level. 

I agree with your flat out NO to the haggler anytime you don’t want
to discount an item, but why is marking it up and discounting it
unethical if you don’t mind adjusting a price for a customer" The
customer doesn’t have to buy the item if they are uncomfortable or
feel they are being taken advantage of.

Why is it unethical to simply mark it up and not discount it at all"
That makes me think you are suggesting it’s wrong to charge more than
the bare minimum you need. What’s wrong with making a profit, a
decent sized profit, if someone is willing to pay it" No one needs
luxury goods; I see no reason to just barely cover your costs and
make a tiny profit if you can do better. Why should we all remain
starving artists so wealthy people can drape themselves in gold and
gems… that we worked so hard to make" Have I misinterpreted your
statement"

Alexis Romeo

Haggling is a time honored tradition! Marking all your stuff up 10%
and knocking off 10% to your good customers (who don't try to
haggle) while allowing those who do "a little off the top" is a
heck of a lot easier than trying to educate the public on labor
costs and justify a profit 

I agree - I enjoy hagglers - not because I’m going to give them the
price break (Maybe I will;…maybe I won’t ) But because I admire the
fact that they had the guts to ask. I like the game. For some reason
I find it more human & personal & it relaxes me to deal with someone
like that… I certaintly don’t take it personally. I like to haggle
myself; it’s good business to get stuff for as little as possible,
yes?. Don’t we all love a bargain, or love someone in business; say a
supplier; who is willing to work with us? Its got the human touch.
Kind of like the old days when a handshake was enough to seal a deal.

Mary R

I didn’t say that bargaining per se is a problem or that certain
customers shouldn’t get discounts occasionally. I have some serious
collectors who I routinely will offer a discount to. I also will
occasionally budge on prices when I have some latitude because I
think it will help to close a sale (but not because they asked me
to). I will also occasionally ask my gem suppliers for a discount if
I can’t make my usual markups on pieces (but they all know that I
deal with only a few of them and I am incredibly loyal to them).

But to first raise all of your prices so that you can always offer a
discount is unethical. It is a bit like the stores that are always
offering a “discount” or “sale” off their “normal” price, but never
sell the darn things at the “normal” price. That, in my book, is
unethical. Raising your prices so that you can always lower them is
unethical. Plus it ultimately hurts the poor people who don’t ask
you and they have to pay a higher than “normal” price for them.

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

Have I misinterpreted your statement" 

Yes you have. Trust me, I am the first person to tell everyone on
this group to raise their prices (and I have in the past,
repeatedly). Somewhat unilaterally every single one of you
undercharges for your work and I think all benchworkers are
underpaid (I don’t know a single rich jeweler–at least one who makes
their own work—so something is really wrong here). I don’t have a
problem with people charging whatever they want. I have a problem
with raising your prices just so that it seems like you are giving a
discount to people. Again, this is like the department stores that
continually advertise “sale” prices, but the goods are never actually
shown at full prices. In those cases it is not only unethical but
also illegal. Now if you’re not advertising the fact that you’re
actually running a sale by discounting everything most of the time
then you may not be crossing the line, but where do you draw the
line? The jewelry business as a whole is an ethics based business.
Anything done to impact that in a negative way hurts all jewelers.

Quite honestly if some of you like to haggle with customers that’s
fine with me. But you shouldn’t set it up so you charge anyone who
doesn’t haggle a higher price simply because they won’t ask (if you
were going to be fair you would quietly tell the customer at the end
of the transaction that you gave them a discount). That’s unfair.
Plus it then raises the question of how you value your own work. If
you’re doing insurance valuations for your customers so that they can
insure it do you show the “real” price, the price they paid, or some
imagined inflated price? And this brings up the question too of how
much is your work really worth? Isn’t it degrading to have something
you feel is priced fairly be demeaned by someone who just wants to
negotiate a better price (aren’t they saying your work isn’t worth
it)? Of course since most of you undervalue your labor it’s no real
surprise, but sometimes it is simply time to say no. And to stick to
your guns. As I said in today’s post I am not against discounting on
higher profit items to regular customers. But I have never given a
discount to a first time buyer who I don’t know. To me it’s the
surest way to say I’m charging you too much to begin with and I’m not
really worth it, so sure whatever the heck you want to pay me is fine
(plus you’re then stuck giving them the same discount every time).

And then there’s this for the majority of you who aren’t in my price
range (my average sale is $2000): How much time do you spend with
these people haggling over a $50 pair of earrings? Do you spend 10
minutes? 15 minutes? 20 minutes? Let’s say you’re quick and you spend
10 minutes. Let’s say it’s on a pair of handmade sterling earrings
that took you 20 minutes to make and has $10 in material cost and $20
in overhead costs (you know, tools, supplies, show fees or rent,
electricity, phone, etc.) So you’re making $20 on the earrings but
you’ve already spent 20 minutes making them. With the extra 10
minutes of haggling time you’ve got 30 minutes into them. But then
you’re going to discount them. What do you give off? Let’s say it’s
$5. Now you’re down to $15 that you made. Wow. You made $15 for 30
minutes of your time (forget about all the show set up time, material
ordering time, cleaning your workshop time, etc.—you can just
pretend that doesn’t exist). $30 an hour. My car mechanic gets $80 an
hour (and he bills out a full 40 hour week). Verizon gets $120 an
hour to have a guy come in your house and run a phone wire from one
room to the next (regardless of how long it takes you pay for at
least an hour) and if they have to run two lines they get double
that. My lawyer gets $450/hour. My older son’s boyfriend’s time, as a
lawyer in New York, is billed out at $750/hour and he’s nowhere near
making partner yet (although he’s really, really good at what he
does) and they bill out every 5 minutes of time spent
talking–whether it’s on the phone or in person and whether you’re
talking business or personal life.

My 16 year old kid with no experience at anything other than being
an ornery teenager earns $9.50 an hour when he works in a bakery and
up to $15 an hour (with tips) when he works in a pizza parlor.
Starbucks starts at $8.50 an hour (plus a small amount in tips) but
they give you full medical benefits. Who’s paying your medical
benefits??? Certainly not that guy asking you for a discount. But
hey, you’re certainly helping him pay for his health insurance by not
charging him a full and reasonable price for your product.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambrige, MA 02140

Fortunately I have had only one instance of a person wanting to
haggle. She a picked up a pendant, and asked," what is your lowest
price?". I politely told her that the price was as marked. She then
told me she was a wholesaler asked if I gave discounts for
quantities. I said “yes.” At which she picked up 2 items, and wanted
me to sell them to her at 50% off I could see that she was just
looking for a “bargain,” so I told her that quantities meant no less
than 10 items, and the discount would be 10%. She then said she was
not interested, and walked off. At least she did not argue.
Interesting encounter.

Alma

My policy for hagglers is to raise the price, that usually stops
them dead. 

Do they ever then buy? Or do they just go away?

I said to myself I should stay out of philosophical discussions. Its
like talking politics at a cocktail party.

There’s a very old adage in the biz that you get the reputation you
deserve. People are smart, they can figure things out. Once they get
wind that a jeweler has policies that maybe the public might take
issue with, that jeweler’s reputation may reflect a certain distrust
on the part of the public.

So, ethical considerations aside for the moment…it might be wise to
project into the future the cumulative effect one’s policies will
have on one’s business potential. If one depends upon repeat
business your reputation precedes you.