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How much are you worth

#1

So I was reading the Boston Globe this morning and there was an
article about how the psychic business seems to be booming in these
hard times. People are apparently desperate for a look at what the
future may hold for them economically. So why am I bringing this up?
Because all of the psychics interviewed charged between $100 and $200
per hour for their time. So the next time you think your time is only
worth $20 or $30 an hour to produce something that someone will be
able to use for years and years to come, remember that someone with
absolutely no formal training, and IMHO absolutely no real skills, is
charging 5-10 times that just to give some advice that may or may not
be true in any way shape or form and that most assuredly will not
have any lasting qualities to it at all. Incidentally, I know one of
the psychics who was interviewed. Told us, with great assurance (no I
wasn’t paying for it, he just offered it), we were going to have a
girl when my wife was pregnant. My SON, Sam is now almost 18. The guy
is still out there getting it wrong. Oh and charging people $100 plus
an hour for it too. Surely if he’s worth that much for what he does
you’re worth a whole lot more for what you do.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
www.spirerjewelers.com

#2

Hi Daniel;

Surely if he's worth that much for what he does you're worth a
whole lot more for what you do.

Mostly I agree with you, but there are market forces and
demographics to consider. I’ve made a considered decision on what to
charge for my time. For my wholesale accounts, I price to allow them
to mark up the product or service to what the market will bear,
allowing them to earn what they need to stay in business while
protecting my need to do same. I have to use a general rule of thumb
as to what I think current prices are for the work, and if they can’t
get what I think they should be able to charge at a minimum, that has
to become their problem, because it’s only fair that I charge the
same for everyone, regardless of the wealth in their area.

Likewise, for my retail customers, I have to pay myself and pay for
my overhead, but I don’t want to blow them out the door with the
price either. I get plenty of customers coming to me with shocking
stories of what they would have been charged for something before
they came to me. I, therefore, can make a good impression, and it’s
helped business. But it’s a fine line to walk between being
affordable and what I call “competing down”. I actually cut it as
close as I can, and that’s an personal ethics issue with me alone. I
can only hope I’m being realistic, and I do periodically reconsider
my pricing to try and make sure I’m not screwing myself. I sometimes
have to resort to what I call the “seive theory”. What falls
through, you don’t want anyway. That means, if a job looks like it
might eat my lunch, I price it so the customer will either decline
the work or, if not, I’m protected from losing money if I attempt it.
I think it takes a lot of experience to be able to know just how much
you can get paid for your work and still stay in business. It would
be nice if one could just be generouse with oneself, but that incurs
the risk that you’ll have less business in the long run. That said, I
think most of us could probably charge more than we do. There’s no
general formula, and you have to consider every situation on it’s own
merits.

David L. Huffman

#3

These are two different things. A jeweler makes a tangible
product (or service). That product can be judged by tangible
measures…the gold is pitted, that stone is crooked, that prong is
lame etc etc. This piece is superb. Whatever…the value is based
upon objective reasoning (mostly).

A fortune teller has a fool for a client.

That is not to say that some jewelers don’t act like fortune
tellers. That kinda thing ticks me off.

#4

Hi David,

It would be nice if one could just be generouse with oneself, but
that incurs the risk that you'll have less business in the long
run. That said, I think most of us could probably charge more than
we do.

I respect what you’re saying, I really do, but I think that it’s
possible you’re over-thinking pricing and undervaluing yourself in
the process. In my experience people come to you because they trust
you and because they know you do good work. I believe that the trust
and confidence they have in you outweighs any price sensitivity they
may have. I bet you could quote $150 to a retail customer make a 14k
fitted wedding band for an engagement ring and they would say OK
(and you would make nearly nothing) or you could quote $400 for the
same thing and they would say OK to that just as easily (and you
would make a fair profit).

I also think pricing formulas play a critical roll. If when pricing
you spend time thinking about what your competitors might be selling
something for, or if you worry that your wholesale customer might
not make keystone, you will under price the job every time. You’re
much better off creating and using formulas or at least establishing
a minimum profit margin that you calculate on each job. That way your
customers are happy with the work you do and you are happy because
you can stay in business and maybe take a nice vacation (nothing
wrong with that). I’ve tried it both ways, giving my work away and
charging a reasonable price for it, the customers were justas happy
either way.

You’ll never go broke making a profit.

Mark

#5

Hi David,

Mostly I agree with you, but there are market forces and
demographics to consider

Well yes, there are obviously demographics to consider. I’m sure the
psychics in Idaho charge less than the ones in Boston because their
costs are lower out there than they are here, so I would expect
people to take that into account.

It would be nice if one could just be generouse with oneself, but
that incurs the risk that you'll have less business in the long
run.

Well you also have to ask yourself this question: If I made more
money on fewer jobs, wouldn’t it be better for me in the long run? A
lot of sales are meaningless if the profit margin isn’t there. Less
sales, higher margins, allow you extra time to put in the added
touches that add quality. Plus if you can make the same on fewer
sales, you have more time off. Personally I could always use more
time off.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
www.spirerjewelers.com