The discount game

Jewelry Discussion
21

Janet,

It is IMHO totally cultural. My mother loved to bargain, I cringed
when I shopped with her. I pay price asked, unless there is a senior
discount.

Several well known artisans I know feel discounting cheapens their
products, and totally refuse to do so. I simply don’t. I also walk
away from merchants who begin to waffle trying to push the sale upon
me. Traditional in Middle East Bazaars as well as Asian. I feel the
first price was predatory and the rest an insult. Price to value,
not to create an artificial high.

IMHO,
Hugs,
Terrie

Teresa Masters
metalsmith.co

22

Hi Janet & All, I worked retail on a part-time basis for over 20
years and YES some people want to see or hear a discount…That’s
the nature of the world right now-at least on the west coast.As I
said earlier, you should try to be upfront about your skills &
quality of craftsmanship-point out whenever possible what it takes
exactly to achieve the perfection a customer sees in your work…But
sometimes, even a 5% savings can mean that it can make the sale
happen… Maybe you can’t afford to do this on all your work but
there could be some pieces that lend themselves to this. You show
that you are understanding of the economic dilemma they may face
(it’s not food,shelter or basic clothing)…I call it “food for the
soul” and even did a traditional short-term layaway if that helped
the customer.

We did a lot of sales that way and the store was within walking
distance of a Pawn Shop and Chinatown-where deep discounts were
always listed on the windows. Clients and tourists could see that we
offered quality & honesty plus beautiful jewelery.

Ciao form sunny SF,CA
Jo-Ann Maggiora Donivan

23 
I'm always afraid my prices are high enough (work-intensive pieces)
that I need to keep the price as low as possible.

Why? Is that based on how much you sell vs. how much you create? Is
it based on your annual turn of merchandise? Is it based on a time
plus cost formula? Or is it based on a gut feeling (what YOU think a
customer would be willing to pay)? If you are basing your pricing on
gut feeling or on what it cost you to make in time and materials, you
are probably shorting yourself. When you throw in the comment “I need
to keep the price as low as possible” you are telling me that you are
almost certainly shorting yourself, probably by a lot. Either that or
that you don’t consider the work you are doing to be worth the time
you’re putting into it, which I don’t believe for a second.

Have you (Neil’s generic you) ever seen someone else’s work for sale
and gotten a little angry because they were asking so much more than
you do, their work was no where near as nice, and on top of that they
were getting what they asked for (in other words, ripping people
off)? Why are you getting mad at them? If you really are selling
better for less, is it possible that the one being ripped off is you,
and the one doing the ripping is none other than you too? Shouldn’t
you instead be getting angry with yourself for not getting with the
program and selling your work for more?

Most of us that work the bench are better artists than business
people. For many reasons, insecurity not the least, we have a
tendency to undervalue our work. Most of us will drop our prices at
the first sign of resistance instead of finding out what is really
the obstacle. I watched a friend drop the price of a pendant three
times in an attempt to make a sale only to find out days later that
the customer’s objection was to the chain the pendant was on. The
customer never said what it was she didn’t like and worse, my friend
never asked. In retrospect, if she’d have asked the right questions,
she could have put it on a more expensive chain and gotten even a
better sale out of it (the all-important add-on sale). Instead, she
lost the sale and the customer because she lost her integrity. She
lost her integrity because she told the customer indirectly that she
thought her work was over-priced (it wasn’t). She did that by coming
down in price too quickly, assuming the price was why the customer
wasn’t whipping out the plastic. All of this happened subconsciously,
without direct words, both by the customer and my friend. Nothing
more complex than a break-down in communication. The right questions
were never asked, what was most important to the customer was never
discovered…

But what about serious artisans who mark up an additional e.g., 10%
in order to be able to give the customer a 10% 'discount'?

Be very careful in giving discounts. You are telling people that you
are either purposely over-pricing or that you have no confidence that
your work is worth what you were initially asking for it, neither
impression is good. The difference between marking up 10% or 70% in
order to discount, ethically speaking is virtually none, imho. Sure
it seems some folks want a discount and won’t buy without one. But
what they really want is to win. There are ways to let them win
without you giving up credibility (or money) by immediately
discounting your price. In fact, discounting should be your very last
resort, only after it has been determined that price is the only
remaining objection and all other options concerning less expensive
pieces have been exhausted. Most times when price is truly the
objection, it’s not specifically on the piece in question it’s a
price point the customer can’t or won’t exceed.

Some things are almost impossible not to dicker on, things like
diamond studs or 1/2 carat anniversary bands. The reason is that
these things can be shopped. They are commodities. Things we create
can not be shopped, not specifically anyway, so there is no need to
bargain. If someone wants to spend less, show them something that
costs less. If they want that piece, well then, that’s the price.
Dropping the price may only cause them to wonder whether they could
have gotten it for even less if they had been a little more forceful.
Not the kind of feeling I want my customers to have when they leave
my store. If you think they beat you up this time, wait 'til next
time, now that you’ve taught them that you can be worn down. Dr. Phil
is right - we DO teach people how to treat us and they will treat us
exactly the way that we train them to.

Don’t get me wrong, there is a time and place to discount. It’s just
far from the best go-to closing technique every time.

I would seriously recommend that anyone doing this for a living
(making and selling jewelry that is) spend some time and effort
learning the art of selling. It is not a skill with which we are
born, it must be learned, just like soldering or polishing. There are
many misconceptions about sales, the biggest one perhaps is that you
have to be a good talker. That is completely backwards. A good
salesperson is a good listener, a good interrogator and someone that
is genuinely interested in finding out what is important to a
customer, and then helping the customer by filling their need.

A good salesperson doesn’t just sell ice water to Eskimos, they find
out why an Eskimo might need or want ice water (maybe it’s not for
drinking). And then ask questions designed to find out what other
services or products might be offered to make their ice water
experience even better (giving another chance to surprise and delight
the Eskimo customer and opening the door for an add-on sale). And
then follows up to make sure the ice water was everything the Eskimo
hoped it would be, fix it if it wasn’t and then later remind them
when it’s time to re-order so they don’t run out (repeat business).
They’ll also ask them to tell their Eskimo friends that are looking
for the finest in ice water and ice water support systems about them
(referrals).

Sales is service. Sales is not predatory in nature as so many think
it is. Sales is caring about and asking what your customer’s needs,
wants and desires are, and then helping them fill them. Price is
often (if not usually) not anywhere near the level of importance that
we think it is. We get in trouble when we assume we know what’s
important to the customer. We get in trouble because our assumptions
about what’s important are usually wrong.

There is an awful lot more to this, and we benchies should spend
more time learning this aspect of our businesses. Sales after all is
what pays the bills and lets us do it in the first place. I would
highly recommend starting training with a book that’s not at all what
you might expect, Zig Ziglar’s “Secrets of Closing the Sale”. Brad
Huisken of IAS (I Am a Salesperson) Training writes for jewelry trade
pubs and has quite a bit of training info tailored specifically for
the jewelry business available and is well worth checking out. Shoot,
it doesn’t matter where you start, just get some sales training if
sales comprises even the tiniest part of your business. It doesn’t
come naturally to most of us, and like so many aspects of our
business we really need someone that knows what they are talking
about to teach us how to do it.

Dave Phelps

24 
Unlike PT Barnum, I believe the number of suckers is finite.

PT Barnum gets credit (or blame) for the referenced quote, “There’s a
sucker born every minute”, but he never said it. In fact, such a
thought was antithetical to everything PT believed in. He may have
said “there’s a new customer born every minute”, but there is no
way he ever considered his customers suckers. Quite the opposite. He
knew that his customers were the most important people in his world,
that they were smart and savvy and that if he misled or played
someone for a sucker he could only do it once, they’d never give him
a second chance. He was marketing to the same people every time he
came to town. He knew that to get the same folks to come to his
shows time after time he had to truly give them “The Greatest Show on
Earth”. Not just say it, but DO it. He had to give them more than
they expected, more than they saw the last time, more than they even
knew was possible. He used their own intelligence to let them win.
He left them wanting more. There is a wealth of fine inspiration to
be found in the life of PT Barnum. A study of his written work is
definitely worth the effort, you would be hard pressed to find a
better salesman and marketer in all of history. It is a shame that
he is remembered for this inaccurate quote. Read just a little of his
writings and those of his contemporaries and you will find just how
preposterous it is for history to assign that unfortunate quote to
him.

Barbara, your post is right in line with ol’ PT’s outlook on life,
especially the bit about generating a story. Excellent advice. But
I’m not so sure that other shop won’t last. In a town where so many
people come and go, they might just do very well, even if they are
cheating. Shame on them. They’re not worried about having to fool
them twice.

Dave Phelps

25 
Send them an email of congrat or best wishes. Make it a fancy email
on gorgeous stationery. Send notes through the regular mail too. Do
name your pieces --

All very good ideas except for the fancy e-mails Some people, well
at least me prefer straight ascii. A fancy e-mail and I get the
option of opening it or trashing it.

People I know get through, a cold call from a total stranger does
not fare as well. When asking for their e-mail also ask if the
occasional special note is OK, then ask if they have any format
preferences.

jeffD
Demand Designs
Analog/Digital Modelling & Goldsmithing
http://www.gmavt.net/~jdemand

26 
There were some problems, mostly because of the rush, but this is
a ring that I can be proud to deliver to you, that you can be
proud to deliver to your customer, that he can be proud to own and
wear. That's what's important, that it's not some flimsy,
repaired, patched, POS." Everybody's happy, especially the
customer. Everybody will be back, there will be more business,
etc. and etc. It's not how much you make an hour, it's how much
you make a year....

Thank you, Mr. Donovan for sharing your story - I found the above
statement and sentiment inspiring.

Blessings,
Sam KaffineS
terling Bliss, LLC

27

We struggle with this daily. We mark our pieces at fair prices to
begin with, and so the only discounting is for very good customers
who purchase several items at a time or over a given period of time.

We have a jewelry store nearby which is 5 times bigger than we are.
They do not produce any of their inventory in house, it is all Hong
Kong mass produced stuff. They are always running 50 % off sales.
Yeah, right. 50 % of what? We also have several chain stores and the
most fun of all, a huge Navy Exchange where service members get huge
discounts on mass produced jewelry, high end watches, AND they don’t
have to pay sales tax.

So it is tough to compete with.

The big jewelry store runs coupons all the time for 3 dollar watch
batteries. We get people every day wanting us to beat that price. We
don’t bother. There is no reason to interrupt one of us working on a
several thousand dollar custom piece to play that silly game.

We do not carry mass produced work. Most of the time, once a
customer “gets” the concept of one of a kind jewelry, they stop
asking for discounts. If they don’t get it, they are most welcome to
go buy the Hong Kong junk, thinking they are getting 50% off when
they are really paying full price.

Then they can bring it to us 2 weeks later to repair it! Which we
gladly do, thank you David Geller for your book! If they balk at our
repair prices, we do not budge, because we are just too small to be
able to afford to give that away. We’ll let our competitors do
repairs at a discount…usually if the repair requires any real
complexity, the customer will be back.

Peggy Wilson
Harbor Jewelers

28

The discounting game reminds me of a lady who went to a butcher to
buy lamb chops. She asked how much and was told $17.39 a pound. She
was horrified and said “that’s a terrible price! The butcher down
the street sells them for $5.99 a pound!” The butcher said “why don’t
you go down the street then and buy them from him?” ANd she replied
"because he doesn’t have any." The butcher took a deep breath and
sad to the lady, “look, lady. If I didn’t have any, I’d sell them to
you at $1.99 a pound.”

When jewelry isn’t made well, it really doesn’t matter how much of a
discount a customer gets on a piece. Eventually it will break and
might be only worth the meltdown value.

Barbara