Back to Ganoksin | FAQ | Contact

If your jeweler gives you his price list


#1

If your jeweler gives you his suggested repair price list, toss it
out!

O. K., you go to a show and a rep shows you a diamond cluster ring
and tells you to stock this ring as it’s a great seller.

You agree and you casually ask “how much is it?”

His answer is "this is just right for your clientele and what they
will pay.

The retail price is $3,300.00."

Would you place the order and stock it? What if you said “I believe
other jewelers sell this same ring for $3,900.00.”

Again the vendor tells you it’s the right price range for this area,
that people won’t pay more than $3300 in your area.

You stock it and sure enough 6 months later IT SELLS! Nothing like a
satisfied customer.

Now you run a sales/profit report and find out the numbers:

Sale of ring: $3300.00
Cost of goods: -2900.00

Profit $400.00 (12% profit margin)

Are you happy now that you followed the salesman’s recommendation
for the selling price? I don’t think so. If you had known the cost in
advance maybe you would have tagged it for a higher price or maybe
even passed on the buy.

Either way having knowledge of its cost would have made you a better
and more profitable jeweler.

So what do you do when your bench jeweler says "those prices you
have are too high for our area, it will run customers off, we’ll lose
business.

Charge these prices I’ve made up for you."

Wouldn’t you like to know your cost of doing a repair before
installing a price list from someone who doesn’t know your costs?

In addition to compiling our Geller’s Blue Book to Jewelry Repair &
Design I have spoken with thousands of jewelers about their
experience in charging for repairs and custom design. Their successes
and failures.

Failures? Few. No matter what you charge across the country and the
world you’ll have about a 90% closing ratio (while selling that ring
typically has a 33% closing ratio). A few jewelers have mentioned
"repair traffic has fallen off some." Its not what you’re charging,
it’s because most of America has melted the old broken items that
were laying around for years!

Successes? Lots. Over 90% of jewelers I talk to say that raising
their repair prices increased profits and cash with virtually no drop
off in customers saying “yes, please fix it.”

For most jewelers whatever number falls out of your mouth customers
will pay.

Take some ping pong balls and write a number from $10 to $100 in $10
increments. Pull out one each day and charge that amount to size a
ring smaller. Easily up to $70 you’ll have a 90% closing ratio.

Its true. I just came back from speaking to Australian jewellers and
they have the same concerns as we. Their costs are higher than ours
and charge $75 to size a ring or more and they have the same fears as
us. But still have a 90% closing ratio. Spoke to one store owner over
there and he went from $75 to $125 to size a ring without a single
complaint.

Repairs are not price sensitive they are trust sensitive.

Going back to the bench jeweler telling you “no one will pay those
prices”, poppycock.

I recently spoke to a store that charged over between $50 and $75 to
make a gold ring smaller (great!) but charge less than $150 for a
half shank as he thought “over $200 is too much money.”

He’s wrong on several levels. First off you shouldn’t have a price
list (for anything) without knowing your costs. Will you buy ANY
inventory items if you didn’t know your costs? There are several
costs in repairs & custom and your jeweler is not privy to most of
them nor knows your profit goals.

If you size a ring smaller for $39 isn’t installing a shank 2.5
times the work of sizing a ring? So labor to install a shank would be
$98.00

What if you had a piece of jewelry to put into the case and it cost
you $50 what would you charge? Triple key? $150.

A half shank easily cost $50 and should also sell for $150. Then add
$98 to install the shank and a half shank should sell for $248.00. if
you had sold it for the $150 per your bench jeweler you would have
sold the gold profitably but installed it for free.

If you have a busy jeweler at the bench who is paid in the mid $40’s
to mid $50’s a year and you’re buying about $1000 a month from
findings and shop suppliers and you expect a 3 time markup from the
shop then your shop sales for a 12 month period should be:

BETWEEN $185,000 TO $250,000 A YEAR!

If you’re not producing in that range give him the price list back
and charge what you need to charge to make these numbers.

You won’t run customers off as repairs are trust sensitive. You’ll
just need to train your staff how to charge for a repair, what to
tell customers who have concerns about price and show the staff why
we charge these higher prices.

By the way if your shop is not profitable its hardly ever because of
the jeweler (less than 15% of the time).

Its almost always because of what your charge at the front counter.

Hey, try the pin pong ball trick and see what happens every day for
10 days.

You’ll be amazed!

David Geller
Director of Profit
www.JewelerProfit.com


#2

David, you are so right. I spent a year at my last employers
convincing them that they were charging too little for repair prices.
They had your book but just did not believe that the prices would
work in their location. I finally convinced them to give it a try.
Worst case they would loose some repair work and they could always go
back to the lower prices. It never happened, prices went up and the
repair volume stayed the same. More profit for the same amount of
work. REPAIR WORK IS TRUST SENSITIVE NOT PRICE SENSITIVE. So if you
have spent 20 or 30 years in a location building trust from your
clients why would you discount your repair prices. does not make
sense to me. Thanks David, for all of your valuable input on pricing
in the jewelry industry. Frank Goss