Realistic Pricing

David G. I use your methodology at every class I teach…:>) When I
teach gem-stone setting to students. anywhere. I ask them to give me
their labour-fees/per hour. I draw a line of the white-board, I ask
them what do you charge?..$15.00 well that low number is way under
the ‘drawn line’. If the students says $50.00 I put their number
’just at that line’…etc.

At the end of the question period, I tell them anyone UNDER the line
will be bankrupt in one year!! Those at the line, will ‘almost make
a go-of-it in business’…the many students who are into the higher $
example $125.00+, will succeed nicely.

Then I go & explain the costs of doing business at their wholesale
level: telephone, insurance, costs for newer tools, their new skills
in taking classes, new inventory, rent,…etc.

By the end of the class, I’ve really woken them up. No more low
labour below the ‘middle-line’. This is their "Economics-101"
class.

I even suggest a new Diamond Setting fee, you should see their WOW &
astonished faces…H-e-l-l-o!!! I walk into the classroom as an
Instructor & a Diamond Setter, I speak ‘two languages’ from both
sides of the bench-pin. I tell them ‘T*his is the real
world’…“Better you smell the Roses, better then smelling
weeds!”…;>(…**Gerry Lewy *

Good job gerry

David G.

Just like each human body is different, so are the venues in which
we sell. I wish it was as easy as establishing your pricing and going
with it come hell or high water. In the town I spend my summers there
at the high mark were 4 high end jewelers. One is now gone. The
remaining two are the normal type of jewelry stores where you see in
the back room a jeweler working. The third has every jewelry techie
toy and three tv screens set up around his smashup to allow people to
watches work. What you will notice about each is their inventory.
When they opened they had lots of big pieces and lots of gold with a
sprinkling of platinum. Now it is mostly silver and gold filled with
a few and I mean very few small gold pieces. They have adapted to the
buying public in this area. It has even gotten so that the one with
the flashy set up carries about 26 gauge silver wire wrapped pieces
with tiny crystals.

Why I point this out is this is a poor area. It is also the
headquarters of what I call the DIY population. I get asked all
summer how do I do what I do, and what tools they would need. They
are not interested in buying from me, but rather how to make it all
themselves. I had one lady the other night who argued with me that it
was my responsibility being part of the Shakespeare Festival that I
had to divulge and teach her everything. I have 23 steps from
beginning to end, and I may show 5. I never divulge all of it. They
can go to the guys shop with the TV screens and watch him.

I once had three pieces of gold in my case at the show. Those were
quickly taken out. While there is security, it is not always around
me. During the greenshow I can have upward of 50 people crowded
around. Now I have an apprentice, and a more secure case. I work in
silver and do special requests in gold. I have necklaces that range
from $300 to $20. It is not so much the cost of the materials, which
are not bead store low quality, but the high end I have a
lot of people who come from all over the country and many countries
outside the USA pass by. Those are my target market. The locals NEVER
buy. The ones say from Los Angeles, and London quickly buy my
jewelry. I keep it priced attractively. For my area I would put a
price tag of about $35 an hour for my work. My apprentice (I’m proud
of her) is putting her first two pieces into the case tonight.

I have her asking me about pricing. Again it is locals verses the
rest of the patrons of the Festival. Told her to figure out the
materials cost.

Then add in $25per hour for her work. A bright light went on. Nowise
knows that being faster is not the best. It is taking her time to do
it well. A well made piece that she may have spent an extra hour on
will be worth it.

When I go home to Florida, my prices go up. Different market area.
If it weren’t for all the diamond engagement rings being sold to the
Mormon population in this area, the three jewelry stores would go out
of business. I don’t know how two of them make it.

Aggie The corseted old lady sitting on the mountain top in 70 degree
weather.

My recent post about the yellow diamond marquise ring I made might
have been a bit misunderstood by some folks.

I was trying to illustrate at what level you have to work to earn
nothing.

Some thought that the ring was “master craftsman” when in fact it
was a very run-of-the mill, standard goldsmithing piece.

Work it out.

500EU with 19% VAT nets about EU420.

The shop runs at EU100 per day so we down to EU320 (if that’s all I
do that day)

Various taxes including personal, electricity, bank charges etc and
I nett maybe EU200.

Increase your prices as Mr Geller suggests, and you simply don’t get
the work.

I bought Mr Geller’s blue book and a fine book it is indeed.

And no disrespect intended whatsoever, but I use it to scare
customers away when I don’t want to do the work.(which is seldom)

The prices that are quoted in there might work in the USA perhaps,
but in the larger world they are far to high to even hope of closing
a sale or repair.

Here in Germany, you pave set for EU 2 to 4 per stone to the trade.

And if you don’t like it, some guy from Russia or Turkey will do
it–and some of those guys are really good and super fast.

Like I said, it’s tough out there.

Most hobbyist will usually include in their pricing the time spent
creating their item " which is the production time " but that doesn’t
include all the time you spent working on other aspects of your
business, such as customer service, promotion, research, etc.

Now add all of the costs you spent on classes, workshops, and books
to learn these skills. Wow, it increased your price quickly.
Education, not to mention long hours of practice, are an often
overlooked factor in your cost of labor.

The Florida Society of Goldsmiths is the best value on education
that I have found so far, except for an unpaid apprenticeship. If
there is a paid apprenticeship available, please let me know so I can
pass it on to my members!

Our October workshop is only $950 including room and meals for 5
full days of classes and we still have a few seats available.

http://www.ganoksin.com/gnkurl/ep81wo

Jean Marie DeSpiegler
Executive Director
Florida Society of Goldsmiths

I have to agree Hans -

It was more cost effective for a foreign client to fly to South
Africa, Place the order face to face and then have a 2 week safari
holiday in the bush, collect the set and fly home than to have it made
in his home town.

Things are tough out there.

Gwen (Johannesburg)

Thank you Hans for sharing this with us. It is very discouraging but
a realistic wakeup call for those who might want to spend a lot of
money going to school to learn jewelry trade. Best to work in a
jewelry workshop with master craftspeople.

I even suggest a new Diamond Setting fee 

care to share what you suggest?

thanks
Peter Rowe

It was more cost effective for a foreign client to fly to South
Africa, Place the order face to face and then have a 2 week safari
holiday in the bush, collect the set and fly home than to have it
made in his home town. 

I like it

David S. Geller
JewelerProfit.com