It seems to me that you do not include the concept of
competition in your vocabulary !
In product sales you have to be competitive. In shop sales there’s
no such thing. Firstly shop sales are not price sensitive, it’s TRUST
sensitive. Issues of trust does not make it competitive. Secondly
"competitive" means selling in the same price range as others.
That’s fine in product but not labor.
In product sales if you buy an object for $100 and sell it once in a
year for $225.00, you made $125. You’re happy. If a “competitor"
moves in and sells the same thing for $165.00, for you to be
"competitive” you too have to sell it for $165. But now you make
only $65.00. How can you make a living?
easy! sell two in one year! That’s $65 in profit twice and you’ll
still get $130 in profits in 1 year. Your profit on product is
gauged by how many sell in a year.
Not so in labor, like repair and design. If you pay a jeweler $100
and sell it for $225, you’ll make $125.00. It took the jeweler
(example) a day to do this.
If some nincomput comes in and charges $165 and you are
"competitive" and also charge $165 you lose! Why? because you can’t
sell two. For you to sell two in the same day means not producing TWO
items in 8 hours, you can’t. So the only way to make money up for a
lower price while keeping your cost at $100 per sale you’d have to
work 16 hours that day, ar regular wages (no overtime pay). Do you
want to work an 16 hour day?
Apparently you perceive that the best method of business is
that of squeezing the last drop of money from the customer.
If you’re going to ompete in what you’ve said that means you charge
as others charge. Why in the world would you want to COPY (that’s
what you’re doing if you charge the competitors rates) someone else
who is losing money from the benck and work your butt off for no
money. Go get a really good paying job.
I have never, in your many posts, seen any reference to the merit of
being competitive. And yet, most modern consumers are increasingly
sensitive to getting a “fair deal”. I don’t fault profitability…I
derive my living from profitability. Nonetheless, I do not do
everything possible to milk the customer. I try to give the customer
a reasonable value on the assumption that he will appreciate the
fact that he is not getting screwed. As a matter of fact, I assume
that the best business arrangement is one in which BOTH parties get
fair value !
Competition is related to product. I know of stores that charge $7
to size a ring smaller and there’s on in Ft Worth TX that charges $90
to size a ring smaller with a torch and $120 with a laser. 70% of the
sizings are done with a laser. Both stores have a 90% closing ratio!
There’s no such thing in milking the customer in repairs and custom.
No one forces them to buy. I rented a car on 9/11 to drive home
being planes weren’t flying. I was charged 50% more than normal,
that’s milking. CHOOSING to have one of the finest craftsman in the
city make my wife, whom I love and adore, a really wonderfully
crafted ring for more money than the jerk down the street wanted is
my choice. And if I believe, because of the way you presented the
sale to me, that it truly be wonderful and my wife will love it, then
But if you are cheaper and it’s not nice quality, I’ll come back. And
if it’s nice quality but you’re higher on the next custom piece or
repair and I trust you, I’ll pay.
I can readily appreciate the fact that you are preaching the
gospel of the fact that many jewelers don't realistically value
their services, but I also perceive that your generalizations more
often than not apply basically to jewelers who operate mall type
stores or jewellers who have high rent , employee laden stores.
Ye Gads man, if you have high rent then you only have two choices:
SELL MORE PRODUCT: That’s turn and will make you the same money
as charging more.
CHARGE MORE FOR YOUR LABOR. You’d have to. Your jeweler is not
faster and your jeweler can’t be cheaper than the guy down the hall.
Try OFFERING more rather than charging less. Offer while you wait
service at 50% more, offer a longer guarantee, have the best
craftsmen in work for you (a real reason to leave my wife’s treasure
with you) rather than paying low wages for lowly trained, just get
You have a distinct advantage, people to expect to pay more at the
Learn how to sell repairs.
If you sell only 3 out of 10 product and that makes you money AND
you sell 8 out of ten a repair, go for 3 out of ten but increase
your prices. Hey, that’s what you’re doing in product sales. Want to
sell 8 out of 10 product? Easy: Reduce your prices in the showcase by
35%. Would you? Probably not. The thing is your repairs are already
discounted by 35%. Bring them up to compete (there’s that word
again) with the gross profit margin percentages of product sales.
Basically, your continuing thesis, suggesting that
contemporary jewellers are not charging enough,
I know they aren’t charging enough. I visit store, I ask questions.
You know why I know they aren’t charging enough? Because they aren’t
getting KEYSTONE on repairs. Simple finding. Add up the jewelers
wages, their matching taxes, all findings, small melee, gold, solder,
tools, mountings, gold casting grain, buffs, etc that it takes to do
the shops business. If YOU’RE a jeweler and owner and work 50% at the
bench, add 50% of your pay in as jewelers wages as well. That’s your
cost. Now compare that to what you charged. It HAS TO be double. If
not you’re wasting your time.
flies in the face of the fact that we are now in another
world in which labor has diminished value.
Absolutely wrong. Professionals make really good money. AVERAGE car
mechanic makes $45,000 to $150,000 per year per the 2000 February
issue of Car & Driver magazine.
Lasik Eye surgery in Atlanta goes for $750 to $2500 per eye. No
matter who does it, it takes 1 hour. You pal around with lowly paid
bench people. There’s LOTS of people making awesome money from the
bench and they make it because they charge CORRECTLY for their time
and material (see paragraph E). What’s the correct labor rate for
you to charge? You should charge in labor FOUR TIMES what you want to
make for yourself. Happy with $37,500? Fine, charge low labor rates.
Want to make $75,000? You’ll have to DOUBLE your rate! Across the
USA EVERYONE tells me else than 5% of customers walk when you raise
your labor rates.
Now it is time to realize that we must accept the fact that we
cannot charge nearly as much for labor intensive endeavours
because a global economy has devalued labor.
Ron, you should travel more. I was in Dallas TX on 9/11 and watched
the towers come down on TV. I had to stay 5 days until I could rent
a car and drive to Atlanta. Anyone stuck out of town was affected, as
was most with the economy and scares. The economy stinks and my
business was affected during that fall. But after that it all came
back for me because I worked my business. I travel and there are
LOTS of cities across the USA that have people buying products AND
services. There are TONS of people who tell me “If it wasn’t for my
shop, we’d close up.” People will pay for good work. Besides you’re
looking at wrong numbers. If you get $15 to size a ring and you go
to $20, that’s a 25% increase in sales! But we’re talking aboutfive
bucks. It adds up. Go to K-MART, WAL-MART and stand it line and look
both ways. There’s PLENTY of impulse items at $29.95 for crying out
loud. The difference I see in the successful stores have to do with
I never said rape the customer I said charge correctly. Why will
people pay for correctly prices repairs? BECAUSE THEY TRUST YOU!
Every single person I have convinced to raise their prices has said
their sales increased. That’s a simple number. If you’re afraid
business will drop off (I understand), I’m here to tell you it won’t
You’ll see lots of people making lots of money from the bench,
people with lots of competition. Hey Atlanta has 4.5 million people.
Think there’s no competition there? I used my book there for pricing.
It works in big towns and little towns. I could go on and on but you
won’t believe it until you try it. Don’t count the people who leave.
Count the people who leave the work. You’re looking at a 90% success