Setting customer stones

Jewelry Discussion
21 
It is up to every jeweler to decide whether he wants to be a
butcher or a surgeon.

Somebody wrote recently that they knew a setter of some years who
never finished his work, and I replied, “That’s not a setter” And
the original poster of this thread said today that he had cut a deal
for the job that was mutually satisfactory. It’s when people pretend
that the customer has to pay “insurance” for your own hands that I
start to chuckle, I’m afraid. Anyway… Blue Nile: I routinely pull
up Blue Nile during a diamond sale to show how much less I am
charging. Generally I don’t “pre-look”, I just do it because I know
I can beat them always. Blue Nile is not a diamond dealer, they are
diamond brokers. I know this because I know some of their suppliers.
Mostly they don’t even hold stones, they get pics and stats and list
them, and then call for the stones as they sell. I also know that as
far as my people are concerned, Blue Nile gets the same price as I
do - easy enough.

22

So what is the difference, if anyone can tell me, between someone
bringing in a diamond to set, purchased online versus a diamond that
came out of great aunt nellies ring? Neither came from my store, so
why should I price it differently simply because of its source? Do I
sense sour grapes here?

23

Not being particularly gifted in doing business, the labor community
being what it is and the economy have conspired to set me up with an
employer that offered me a pretty nice job a couple of years ago.
Since that time, I have been pretty unresponsive to this list. I
also started a new job with a new employer a couple of days ago that
I believe will provide an even better experience. What I post here is
just from my own experience.

I usually spend about fifteen minutes setting a one carat diamond.
Larger stones I will spend a little more time with.

A while ago I set an 11 carat emerald cut. Something like $330,000.
When I set it, I cleaned off my bench. I laid down a towel in my
benchpan. It was a simple four prong setting. None-the-less, I spent
a couple of hours prepping the setting. I took my time. I took my
bosses time. In my book, by taking the extra time, I reduced the odds
of chipping the stone. That extra time is worth some extra money.

I think that it is important to note that a chip in that stone is not
a $330,000 loss. The real loss is the difference between the $330,000
and the market value of the reset stone plus the incidental costs of
liquidating the freshly cut stone. This could range anywhere between
$1,000 and $100,000, but is almost certainly not a total loss. A
total loss might come at the hands of someone that tried to PMC the
thing or someone that dropped a sledge on it. I have seen people that
have even turned a profit from a chip by selling an upgrade.

It is important also to note that the online sellers seem to be
running into a stone wall. When I took a job a couple of years ago,
that employer was emulating Blue Nile. In the previous three years,
he was showing a reasonable profit. That company was buying in
Belgium and Israel. Their listed goods were goods that they had on
hand. Since that time, they have largely withdrawn from the Internet
because of the costs involved in promoting that business and
difficulties in resolving price differences between the Internet
prices and the B&M prices. Recently, my daughter did a report for her
middle school civics class. She chose to investigate Blue Nile. I
found myself listening to a speech by the president. In it he
described difficulties in promotion. The Internet is now going into a
phase where online advertising is overpriced and those involved are
trying to find new ways to grow. This is certainly not the end of the
Internet, but real values are in flux and are correcting themselves.
Brick and mortar stores will also certainly be with us for quite a
while to come.

24

Lets have a $1000 stone for example. If it belongs to my trade
customer i get $2.90 to set it, if it comes from me or a private
customer i charge maybe $15.00 and spend more time doing a neat job.
Hardly going to pay for a replacement am i? well if it’s my own stone
i would have to, though not happened yet (touch wood). And people
can’t understand why setters don’t want responsibility. Should i
charge $115 just in case & hope i set 10 stones without mishap so i
can replace the 11th?

Chris Mead of C. M. Settings

25

I am sure Mr Geller will respond to this one also, but my two cents
are I would not do anything for $2.90 even for the trade. When I did
do wholesale work I charged $20.00 for a stone in the size range of
$1000.00. If a customer walks into my store with a diamond and a
setting that is perfect for the stone I am going to charge him
$75.00 for my service. Not to insure the stone in case it breaks but
because I have to pay the plumber that just charged me $45.00 for
each 15 minutes. Lets say it takes 15 minutes to set the stone
including polishing, 10 minutes with the customer when they drop it
off, 15 minutes with the customer when they pick it up, the cost of
the job envelope the cost of having the building that lets the
customer come in to drop it off and the cost of the tools. At $15.00
I think you just lost minimum $40.00.

26

Daniel,

You are correct. I should have said markup not profit. I have two
siblings in the swimming pool industry, one friend in the music store
business and good friend that has her cosmetic line made here.
geographic range from NC to TX.

I have seen invoices (helped in each store) The pool and music
industry markups are very low while the bottles to store the
cosmetics cost as much as the product…the production of the raw
materials and labor are high. And that is where I came up with my
thought on the post,so thank you very much for the correction, I
need all the enlightenment I can get!

Lisa McConnell
Ft.Worth,TX

27 
A while ago I set an 11 carat emerald cut. Something like
$330,000. When I set it, I cleaned off my bench. I laid down a
towel in my benchpan. It was a simple four prong setting.
None-the-less, I spent a couple of hours prepping the setting. I
took my time. I took my bosses time. In my book, by taking the
extra time, I reduced the odds of chipping the stone. That extra
time is worth some extra money.

Bruce sets out what is pretty much the essence of the thread.
Diamonds in particular don’t chip, setters chip them, and with few
exceptions they do it because the aren’t really qualified. I’ve had a
couple of colored stones that just cleaved immediately by no fault of
mine, just ready to snap. The real point and answer to this thread is
not what to do if you damage a gemstone and how to cover it, the real
point is don’t damage them, and if someone can’t do that then they
should learn how. I remember something similar to Bruce’s example
except it was an emerald. The first thing I did was rehearse the job
in my mind, and put the stone in the setting over and over again,
fixing everything in my mind and finding the right angles and tactics
to use. Then it took about 2 hours to set it - push, loupe, push,
loupe, push, loupe We are human, sometimes we make mistakes.
Being trained, having skill, and paying attention when it counts is
how to not make them at the bench. Imagine if your watchmaker working
on your Patek charged you double “just in case his hand slipped”
—This applies to those at the bench and those in stores looking for
quality work - if your setters are breaking center stones (everybody
chips melee now and then) then you need a new setter… There are
situational issues, as with everything. Most shops consider fast
setting of $10 quartz stones to be more important than a breakage
allowance, things like that. But when you’re talking about $10k
diamonds, that’s different. Just don’t damage them.

28

Bill &co, I do actually work in Euros not that it makes a difference!
Point is that i am in Finland, essentially a “foreigner” so you don’t
turn down work as the trade is small. What you do is : a reasonable
job for the price ie: level “ish” stone, tight “enough”, smooth
“enough” in 2 minsor so. Solitaires don’t pay at all well, other
models pay very well if you do them fast enough. You have to take the
rough with the smooth. I started my “blue nile style” web site
recently, not to compete with the b&m stores but to offer a different
selection of customisable models that i can work on properly at a
sensible price. No harm offering a millio= n possible designs,
bearing in mind that i work alone and therefore am limited to the
amount i can do properly in a day/week on top of the bread & butter
work. A “goldsmith” trying to do the setting may not be as quick or
as confident as a “diamond & precious stone setter” & i believe in
delegating work to the specialised people. eg: send engraving to an
engraver or use a machine. There is a difference between craftsman
pricing & businessman pricing. I don’t have a shop or flash car or
big house & live within my means happily not rich in money but very
rich in job satisfaction.

I think the above sentence should have a comma somewhere!I don’t like
2, 90 but thats what it is for that part of the trade, adds up to a
fair amount a month which might easily be someone elses. If I get
enough custom work one day i might be able to be rid of the mass
production crap. Maybe i could charge more…but i’m not greedy or
needy.

Chris of C. M. Settings
www.cmsettings-jewellery.com

29 
I am sure Mr Geller will respond to this one also, but my two
cents are I would not do anything for $2.90 even for the trade.

Yep, you’re right. I didn’t want to sir the pot, I couldn’t for the
life of me understand how you could make a living at those prices.

But se/la/vie

David
www.JewelerProfit.com

30

I am shocked by that $2.90 stone setting charge. Here where I live a
trade charge is $5.00 and I thought that was bad.

31 
Bruce sets out what is pretty much the essence of the thread.
Diamonds in particular don't chip, setters chip them, and with few
exceptions they do it because the aren't really qualified.

John, respectfully, I must disagree. Any highly-skilled stone setter
will admit to breaking many stones including diamonds during their
career, and not just during the learning years. Every stone presents
a risk, even round diamonds with thick girdles. Customers can damage
these unlikely-to-break stones simply by wearing them, without any
sort of compression force, and we’ve all met victims of this
phenomenon. One little strike, a drop on the kitchen tiles, and
disappointment.

I have been setting diamonds for the trade, as well as for my own
retail operation for more than 28 years, and I have been a factor in
a few casualties during that period, but only because I was trapping
vulnerable gem material in a metal enclosure permanently. The best
setters I have known fully understand that there are undeniable
risks, and the ones who have broken diamonds have also impressed me
with the perfection of the vast amount of their successful work. A
good way to gauge the merit of a diamond setter is to give them a
few emeralds to set. Their accuracy of bearing-cutting will reveal
itself during the process, and if they are mushing thin foil over
the girdles, they aren’t setters, they are imposters with epoxy
back-up.

Getting back to the origin of this thread, it wasn’t so much about
the risk. The question was related to losing a sale to an online
vendor, then having to be the bad guy and have the customer sign a
release before setting the stone, which is the most responsible
thing to do. This makes the customer sweat buckets, and introduces
doubt into the equation. If you sell the diamond, you don’t need to
protect or bring doubt upon yourself, you have made enough of a
profit to justify the risk of setting. It’s even better to refuse
the work on the above grounds. The customer denied you the profit.
Let the dot com setter prove their worthiness.

You have to set a lot of stones in order to net the equivalent
profit from one diamond sale. If you can’t sell the diamond, why
would you help your online competitor by setting it? If you do
damage it (as unlikely as that is) everyone within 50 miles will
hear about it and you may have ruined your reputation for a modest
setting fee which would be ludicrous to charge following any
unfortunate event. It’s like not shoveling snow from your sidewalk.
In the unlikely event that someone falls, you will be liable for
their injuries. It’s foolish to not make a simple effort to protect
yourself from unlikely events.

If it’s grandma’s diamond, absolutely fine, I’ll set it for grandma’s
sake because it didn’t come from some drop-shipper who works in their
pajamas.

32

Once again a lot of you are forgetting about some basic costs
involved when setting expensive gems. Let’s put aside the breakage
issue for the moment and assume as John Donivan has said that if you
are breaking a lot of stones then you need to learn how to not break
them and that you shouldn’t burden an individual customer with the
potential costs of your mistakes (or, as he pointed out, for those
times when a colored stone–opals are known for this—just decides
to crumble in your hands before it even gets near a setting tool).

So let’s get on to the real costs associated with taking in a
$100,000 stone to set (or let’s say 5 $20,000 stones at the same
time). I don’t know how many of you actually read your insurance
policies, or have an agent as good as mine, who comes in and goes
over your coverage, but when you buy a jeweler’s block policy, you
have to come up with an average value of goods in your possession
(that aren’t yours) at any one point in time. This is so that if you
are only normally covered for your own goods (let’s say you have a
half million in coverage for that), but that you routinely take in
expensive goods belonging to other people, the insurance company has
a pretty clear idea of what their MAXIMUM liability is. If you
routinely have $2-300,000 worth of other people’s jewelry in house,
for whatever reason, you have to buy coverage to insure against loss
of that average amount (over and above your half million in coverage
on your own stock). If you don’t tell them what your average is or
understate it severely, and the day you get robbed you have 10 times
that average amount you’re basically screwed. The insurance companies
don’t have to pay out if they find you’ve lied to them, and if they
believe you’ve lied to them about one thing, they will pretty much
assume that everything you told them is a lie, and good luck then in
collecting against even your legitimate stock amounts.

But here’s the thing:

All that extra coverage costs money. Occasionally, you even have to
go to your insurance company and get a rider if you’re handling stuff
way out of line with your normal coverage. Consequently all of those
expensive goods coming into your hands do in fact increase your basic
costs of doing business. Then let’s not forget about the safe you
need. If you routinely are handling only $100,000 worth of your own
goods and someone else’s stuff together then you don’t need much of a
safe. On the other hand if you routinely have a half million dollars
or more in things you need protected you need a much better safe.
Safes cost a lot of money. You wouldn’t need such a good one if you
weren’t taking in expensive goods. Another increased basic cost. And
then there is also the fact that any time you take in a very
expensive piece, not only are you going to spend more time working
on it, but you are going to spend more time taking it in from the
customer, to insure that everyone is clear on exactly what they have.
Often you need to do stone plots on the spot for the customer. You
have to be paid extra for this kind of time too.

So in my book charging extra for working with high value pieces is
not only legitimate but necessary (if you intend to remain in
business for any period of time). Whether you choose to do this by
charging more on high value pieces or adding a charge to all of your
work to cover the extra costs is up to you. But to assume that
working on a high value piece doesn’t cost you more is living with
your head buried in the sand.

I don’t want to get into the fact that Verizon charged me $75/hour
to have a guy come into my house 5 years ago to run a little wire
around it. Those of you who think your time is worth only $20-30/
hour still are just going to have to come to grips with that
yourselves.

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

33

Hi Bruce,

Recently, my daughter did a report for her middle school civics
class. She chose to investigate Blue Nile. I found myself
listening to a speech by the president. In it he described
difficulties in promotion. The Internet is now going into a phase
where online advertising is overpriced and those involved are
trying to find new ways to grow.

Your daughter sure had an original idea for a speech. Is that speech
by the president of Blue Nile something that is available to the
rest of us? If so where could we find it?

Mark

34

I guess that everyone has these issues. We get lots of remounts from
customers. Lots of times it is three of four rings with a couple of
carats worth of diamonds. Unless the diamond looks like cracked glass
we just set them like any other stone. If it looks really bad we tell
the customer that this stone could cleve or chip in setting it. I
have only been at this for three years and the largest diamond that I
have broken was about a 5 pointer. I have set up to a 5ct diamond. It
was sweet stone with a nice faceted girdle. I never gave it a second
thought while I was setting it.

Now what does scare me is colored stones. At another store I worked
at we had a customer that always brought in her own stones. Her
husband bought her a 17ct Tanzanite. Did I mention these people are
loaded? When I built the plat bezel for this stone, I kept the stone
covered in wax on a polishing cloth. In the end I made the store
owner set the stone. It was not too bad because it was laser set from
the back. All I could see in my mind was reflect laser light would
hit the stone somehow.

On another note. We are waiting for the other shoe to drop on
another diamond deal at the shop. The owner of the shop spent weeks
looking for a 3ct D VVS1 excellent cut with slight to no
phosphorescence. We found a sweet one and the cost to customer was
$97k. Now the customer instructs my boss to fax the info to another
jeweler to make sure he was getting a good price. We faxed it and we
were informed within 10 mins the deal was dead. The other jeweler
says he can get him a better price. Now we are waiting for the
customer to walk in with this other dealers stone and want us to
design a ring and set his diamond.

Now for the WWYD (what would you do?). Now if you called dealers all
over the country over the course of 4 weeks and found your customer
his ideal diamond, would you fax all the to another
jeweler? We where told by our customer if we did not fax the info to
the other jeweler, the deal was over. I told my boss if we did this
the deal was over anyway. My stand was that we not fax the info to
the other jeweler and if our customer had that little respect for us
we did not need his business. My thought was we would still walk away
with our dignity. But I guess that dignity does not pay the bills.

Rodney

35 
Any highly-skilled stone setter will admit to breaking many stones
including diamonds during their career, and not just during the
learning years. Every stone presents a risk, even round diamonds
with thick girdles.

Could not disagree with you more strongly.

There is no reason in the world why a gemstone, and especially a
diamond should not survive a setting process. The largest forces
acting on gemstone are forces generated while gemstone is cut. If it
survives cutting, it can be set without been broken or chipped. The
only issue is time. Some gemstones simply takes longer that the
others, and accidents occur when setter either does not understand
the particular problem inherent to the gemstone, or does not care to
take precautions to avoid damaging the gemstone.

Leonid Surpin.

36 
So in my book charging extra for working with high value pieces is
not only legitimate but necessary (if you intend to remain in
business for any period of time).

Nobody argues about that. Of course it is expensive to handle
valuable merchandize. That there are many risks associated with it,
but having setters with 5 thumbs instead of fingers is not a
justification that should be used for these charges.

Leonid Surpin.

37

All of what Daniel says is true, except that generally the security
of an astronomically priced stone is different than
usual…Armored cars and stuff…

http://www.donivanandmaggiora.com

38 
respectfully, I must disagree. Any highly-skilled stone setter will
admit to breaking many stones including diamonds

No, David, you don’t really disagree. The real point is to be able to
say, “I broke the stone”, instead of “the stone broke”,
philosophically, at least. So many people just fumble around and then
are amazed when something bad happens. And yes, if you haven’t broken
many stones, which I would hope would all be smalls, then you’re not
a setter - it’s part of the job, unfortunately. Though I see how you
could interpret my words literally - the downside of quickie forum
posting - I’m really talking about personal and professional
responsibility, as you also discuss. And also to illustrate that even
though someone’s setting class had them whacking a bearing and
punching in 1/4 ct. CZs, the art of setting a $250,000 emerald is a
whole different animal.

39 
slight to no phosphorescence.

I’m sure you meant fluorescence.

over the country over the course of 4 weeks and found your
customer his ideal diamond, would you fax all the to
another jeweler?

No I wouldn’t have, but I also would have told the customer up front
that if price was their only issue that they should go elsewhere to
begin with. I always tell customers looking for bigger diamonds that
if price is the concern (at any point in time) they should be looking
elsewhere. I’m not a bargain shop, I’m a quality shop. Want a deal on
a diamond? Go somewhere else. Want the best value on a diamond? I’m
their man.

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

40 
Getting back to the origin of this thread, it wasn't so much about
the risk. The question was related to losing a sale to an online
vendor, then having to be the bad guy and have the customer sign a
release before setting the stone, which is the most responsible
thing to do. This makes the customer sweat buckets, and introduces
doubt into the equation.

Absolutely right! We don’t want to introduce doubt.

The thread has taken some interesting turns, but when I originally
asked what to do I was absolutely more concerned about the risk, but
also annoyed at losing the sale. Blue Nile will not set a stone in
my ring. I called them up and asked. Some of the other online vendors
will set in my jewelry as long as it is understood that I hold them
harmless should there be damage to the ring. I made the ring, I can
fix it if something happens to it. I can’t fix the diamond. After a
re-cut and loss of weight, cert is no longer valid and all that.
Repairing the ring only takes some time. Making right a chip would
take money and who knows what kind of customer relation hassles.

What seems to me to be the way to go is to have a statement at the
ready, both in my shop and on my web site, that basically says if
you want me to set your grandmother’s diamond or something like that
and agree to hold me harmless the cost is included in the basic price
of the work. If you want to use a newly purchased stone from another
vendor, my first preference is that you have the stone vendor
arrange for setting it in my piece, for which I will charge nothing
extra, or I will set it myself for a charge equal to 5 percent of the
price of the stone. The diamond in question that started this thread
was only a little over $3000, so the charge would be $150, which this
customer has already agree to.

I am of the opinion that if I chipped Grandma’s diamond the chances
are that the emotional consequences would not be as great as
chipping a brand new stone where the full price is still on this
month’s credit card statement. It is still Grandma’s diamond if it is
chipped, re-cut or not. The value is probably not specifically
established in the customer’s mind, but the sentimental value is. I
am not really much of a diamond guy, so this forum has helped me a
lot in thinking about how to deal with this increasingly common
situation. Maybe some of you experienced diamond guys can shed some
more light on the relative consequences of screwing up when you don’t
own the stone.

Stephen Walker