I believe your first problem, and the more important issue, is
that you let your accounts give you their price list of what you
can charge them. How do they know what you're operation's overhead
is? I used to operate a trade shop and if they came up with that
bright idea I knew immediately I didn't want to do business with
them. You're not telling them what they should retail your work
for. Maybe they're costing you business by over pricing. Maybe
they're charging too little and they're making it your problem.
I haven’t read the whole thread but the retailer giving the trade
shop a price list is typical for national jewelry chains and yes the
last line speaks volumes about the chains.
That’s why the little guy struggles.
The chains have no clue how to teach the staff to charge and to
management the easiest way to make a profit is to cap their costs.
Asking for the gold back is not new since its so high.
It’s a profit strategy.
I have spoken to Zales and other large chains. Some of their big
managers were interested in my pricing guides for their stores but
the big wigs up top said no, this is the way we’ve always done it.
I have instituted my book in smaller chains, 8-20 stores and they’ve
done great with it.
I chewed out one large chain and told them THEY are the chief reason
we can’t get good jewelers, they don’t pay well in their stores and
they don’t allow the trade shops to pay well. Pay is a great
motivator for career choices.
I’ve told this David Geller analogy to many, including them, always
told to a male.
“As a young man, did you ever look up in the dictionary the word
‘sex?’” They usually say “no” (yeah sure)
“Do you know what it says in the dictionary?”
“No”
"It says “See Intercourse”
“If you go look up the word intercourse, know what it says?”
“No”
"It says “See Sex”
“It’s a vicious cycle and jewelry repair is the same way.”
"The small retailer says “We can’t raise our prices like the big guy
down the street, customers won’t pay. After all repair prices are
very price sensitive (incorrect, they aren’t”)
Then you speak to the BIG guy down the street:
“We can’t raise the prices, if we get above the jeweler down the
street, customers won’t buy from us. After all there his staff is
better trained and they can speak to the jeweler directly”
It’s a vicious cycle.
You see the big guy can charge what they want. The consumer thinks
the will be there forever, can be trusted and if there’s a problem
they’ll stand behind it. They can charge whatever they want.
The little guy is THE craftsmen, the customer likes having the work
done where it won’t leave the store and they can speak to someone
that knows what their doing, has had previous great experiences
having things repaired or made. There’s trust here and the small guy
can charge what they want.
Both stores are scared but both stores can charge what they want.
As I write this a major jewelry magazines have reported the
bankruptcy of The Warner company in Fresno, California, a fine
jewelry store.
This is a short writing from a their local paper:
…
"The Warner Company issued a statement saying the untimely death of
owner Casey Stephenson in 2008, combined with the unexpected downturn
in the economy, have caused great challenges for this family-owned
business.
The company has been operating in the Central Valley since 1867."
…
When I started doing consulting in the late '90’s while still having
my store I did a store visit/training for Casey Stephenson, who died
from cancer in 2008.
I’m not sure when he bought the business himself, but it was in the
'90’s. He took it from a small mom and pop store and made it grow
into a multi million dollar store. He did a great job and he didn’t
work long grueling hours, he ran it as a business, not a store
housing beautiful things.
Whenever I visit a store I usually go out to dinner with the owner
and/or management staff to chat and set up the schedule for the days
to start.
I remember this gentleman vividly. He took me to dinner at a country
club and we sat outdoors overlooking the gold course. I’m explaining
the “Geller” mantra from making money from the shop.
Most people usually look you in the guy when they talk but I just
remember this guys looks and words.
Sitting outside, he looked over my shoulder, gazing out onto the
gold course and said these profound words:
“Repairs, its just another profit center”
I’ll never forget that short sentence.
They kept up on buying the newer books from me until he got sick and
passed away.
I do not know anything about the management team that took over but
I suspect they come from the “old world of jewelry”. Casey was new
world.
Sincerely
David Geller
JewelerProfit.com