Keeping trade secrets

Jewelry Discussion
61 
The only defence you have about jewelry markups being always
higher than anybody else is some blah blah blah about the costs of
doing business.

Well I may be dumb but it’s usually the case that if you have high
expenses then you have to charge high prices or you go out of
business. Hmmm…but then I may not know anything at all after
running a store for 25 years.

To hear you talk one would believe that all the other stores in
the mall dont have the same rent, employee, insurance and other
expenses.

Of course they do. And what do you think their markups are??? Do you
honestly think that the clothing stores don’t try to run at 100% or
far higher markups?? Do you honestly think that those stores that
sell small gifts don’t get those kinds of markups? And for the stores
like the electronics industry, they’re either doing the same or they
are moving volume. Of course it doesn’t matter what your volume is if
you’re losing money. The only industry I know that consistently runs
less than 10% markups on their product is the food industry. And they
are able to do it because they move volume. Volume can often be an
answer to the problem of costs, but let’s face it there are only so
many pearl necklaces you can sell to people at any price.

Recently places like wall mart and other dept stores have got in on
the jewelry action and sells things for half the prices of the
jewelry stores even after their grand sale that is always going on.

Actually one of the main reasons that Wal Mart’s prices are lower
(and mind you they sell mostly junk when it comes to jewelry) is
because of their buying power, not always because they charge lower
markups. They are able to buy stuff at a lower price and therefore
put it out at a lower price because of how large they are. But I
wouldn’t be at all surprised if, even at their lower prices, they are
getting close to a 100% markup on many of their jewelry items.

The problem is that jewelry sotres try to sell an image rather than
a product and more expensive is somehow desirable because of the
cost.

Well, yes, you’re right. A successful jewelry store does try to sell
an image. Our entire product is based on image. If you don’t
understand that image is what we’re all about then why be a jeweler.
What is a wedding band? It is an image stating that you’re married.
What is an engagement ring? It’s an image that you are going to be
married and that you are committed to someone. Earrings, pins,
necklaces all create an image of how an individual wants to be
perceived (or how their partner would like them to be perceived). If
you want to present an image that you only sell a product, then
you’re right you can’t ask for much of a markup. But then, again, why
are you even a jeweler at that point?

That wont help the person who wants to brag about how much he spent
though. But I am sure that there will always be retail dealers
willing to charge bragging costs to their customers

I wasn’t bragging about how much I spent. This is the reality of
owning a jewelry store. While the costs may vary by location, living
costs will as well. The fact that you think it’s bragging to talk
about the costs of running a retail operation shows how little you do
actually know about these costs. On the other hand here are some of
the things I offer to my customers (for those high markups you seem
to think are outrageous):

  1. the expertise of a master jeweler/gemologist on the premises

  2. complete, full disclosure of all gemstone treatments with clear
    explanations of all techniques involved

  3. lifetime guarantees on everything I sell (including loss of
    stones and including free lifetime resizings of rings)

  4. a pleasant environment in which to purchase a piece of meaningful
    jewelry

  5. a place to buy a high end, exceptional product that no one can
    find on the web

  6. a place to actually try on and see how a piece will look and feel

  7. an honest attempt to find something that will actually look right
    on a customer–not just something you want to sell to them

  8. a price that is consistent with the product being purchased and
    the guarantees and warrantees that accompany it

  9. a beautiful presentation box to give a gift that carries all the
    weight of the meaning behind it (how many people do you know who open
    a box that says Amazon.com on it with a ring in it and say, Gee
    honey, you really got me something special???)

How many of these things can internet jewelers offer? How many do
you offer?

And incidentally, I’ve never run a sale in my life. And I never
will.

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

62 
Actually one of the main reasons that Wal Mart's prices are lower
(and mind you they sell mostly junk when it comes to jewelry) is
because of their buying power, not always because they charge
lower markups. They are able to buy stuff at a lower price and
therefore put it out at a lower price because of how large they
are.

This may be true for jewelry, but I have a store that sells books,
gifts, etc. as well as jewelry. When at a meeting of our trade
organization (CBA), several of us retailers asked our professional
organization to check into why the “big boxes” were getting books for
less than we pay at wholesale. The answer that came back was that the
big boxes were paying the same at wholesale as we little guys. They
simply sell their books at or below wholesale. They call these items
“loss leaders.” Their reason for selling some items at an actual loss
(before even factoring in overhead)? It brings people into the store.
As I thought back to my first experience in retail–as a stock boy at
the then-largest department store in the West–I remember that we did
that even then (1957). The wholesale price was coded on each item and
we stock boys had a great time breaking the code and getting an
unauthorized look into the markups–and markdowns of product.

Del Pearson of Designs of Eagle Creek in Beautiful South Texas
http://www.eaglecreekcs.com

63

Daniel,

If I ever go back into retail sales, I’m coming to work for you! :slight_smile:
It sounds like you have found a nice little niche there, and you
really take care of your customers, my kind of store.

Amery

64

Hello Dean,

every time I go to a mall, I can see that the flow of people in and
out say, in a cafe, a mcdonal’s, a cosmetics or casual or sport wear
shop, is much much higher than in a jewelry shop, and that means the
cash register or credit card reader in those shops work much more
times than in the jewelry shop. So, if your business, just because of
its nature, has not a big ammount of operations throughout the day,
it isn’t too unfair to have a “good” markup over your goods.

On the other hand, few weeks ago I bought a well knonw brand pair of
trainers, and it’s not difficult to figure out that I must have paid
around a 2,000% markup over the materials and labour costs (I’ve got
a relative that works in the import of clothing from the Far East). I
don’t care much if that markup goes to the retairler or whoever in
the way of the trainers until they get to the shop window. However,
it would have been much more expensive to fly to Taiwan or Indonesia
to buy the pair of trainers directly from the maker.

Definetely, jewelry is not the field with the highest markups.

Fernando F. Escudero. Not a jewelry retailer, just a humble
self-employed stone setter, trying not to throw too much stones to
our own roof.

65 
The answer that came back was that the big boxes were paying the
same at wholesale as we little guys. They simply sell their books
at or below wholesale. They call these items "loss leaders.

The problem is, this strategy can work-- but only if the customers
it brings in are the ones you want. So it works for discount
stores-- it brings in those who respond to a cut price. Not such a
good strategy, however, for anyone who doesn’t want to make
discounting a way of life-- like a craftsman.

Noel