I’m a member of Polygon, a jewelers website for buying and selling
almost everything in the store. In addition there is a very brisk
business and repair/custom discussion channel were jewelers discuss
and hash out a mirage of things that happen in a store.
I have friends in Florida who won 2 successful stores and are
excellent business people and jewelers. They just returned from the
Stuller Bridge event ( Stuller's Bridge Event | Be Tomorrow's Jeweler! | Stuller ). If
you’ve never been you should go immediately. You are taught some
awesome thing about our business and if nothing else you get to see
how the country’s largest jewelry supplier operates out of a 100,000+
square foot facility.
Jeff & Katrina Hess were there and posted this abbreviated item about
my Geller price book being mentioned during the event:
…
PS, Mr. Gellers name was brought up in a class. 1/3 were devotee’s,
on third knew of him but were skeptical. One third had not heard of
him.
When someone said his books were too expensive, Katrina and I jumped
up and told everyone with no uncertain terms that his books were a
MUST and would pay for themselves in months.
We trust the “Check is in the mail” David, right?
(lol… no. we are actually in Davids debt. seriously a robust
discussion on David’s book took place.)
…
The following is my response and you hopefully will get a kick out
of it being I received two calls today about this very subject. One
the prices are too high and the other from someone charging 25% more
than the current book.
This one area kills me. 5 years ago a 1 carat diamond costs “X” Today
it costs “X” plus a number, because of rising diamond costs.
Now with a newer higher price-same quality diamond all stores raise
the selling price. But they shouldn’t. They should sell it for the
same price as 5 years ago and be nice to their customers. Why you
ask?
“Because they are in a small town and it’s very competitive around
here”
But noooooooo. They raise the price. WHY? Because they have an
invoice to show them their costs and if costs go up they raise their
selling price.
Size a ring smaller? Can’t raise the price, we are in a small town,
lots of competition.
But didn’t gold go up?
Didn’t the jeweler get a raise in 5 years?
Hasn’t other company costs gone up?
Therefore didn’t the cost of sizing go up?
Yes, but why doesn’t it costs more to the customer?
Because the store doesn’t have an invoice from their hourly wage
jeweler.
Stores who send their work out and get an invoice from the trade
shop raises the price to the store and guess what the store does?
RAISES the price to the customer to size a ring.
My prices aren’t too high. The jewelers KNOWLEDGE is too low
So happens I had two calls on this subject today. You won’t believe
today.
Go get a beer and come back to the screen .
…
You back? Good, here we go
10:00 am today. A store calls. They just bought my price book a few
days ago and also just bought the book download for the Edge. They
called to see how to MANUALLY lower ALL OF THE PRICES in the Edge
program.
When I get this question I always ask “Why are you doing that?”
Get the same answer every time
- We are in a small town.
- There’s lots of competition
- I don’t want to over charge my customer.
- The guy down the street charges the same or less as we do.
So I always start out by asking what they charge to make a ring
smaller. A yellow gold 2mm engagement ring smaller is $39 in our
book. They charge $35. So I ask “Why lower it, charge my price.”
“Well other prices are also too high. Like your white gold sizing,
we also charge $35.”
So I ask “You don’t charge for rhodium plating the white gold ring?”
“No, the outside trade guy doesn’t charge us”
But being it’s being rhodium plated and the bottle cost $250 YOU
should be charging to help make up for the mistakes your sales staff
makes and redo’s that cost you money.
Nope, they are going to lower the prices in my book and there are
over 7000 sku’s to adjust; rather than even trying the newer higher
prices and make more money they will keep these older prices.
They spent all of this money just to have an electronic version of
their price book in the Edge and not make any more money. Remember
they charge $35 to make a yellow or white gold ring smaller.
Got your 2nd glass of beer?
2:30 pm today. Another jeweler calls me and says “Hey a jeweler
friend called me today; we both have your book. He says his book
says $39 to make a narrow yellow ring smaller. My book says $48.
What GIVES?”
I look up his record and in November 2010 (that’s 5 years ago this
November) he called me when gold was climbing. Remember after the
recession gold shot up from $900 to $1350 and climbing faster,
eventually above $1500? I had calls for a higher priced book and it
takes a long time to do that. So I had available a book that was
across the board 25% higher. So a $39 sizing in this "Emergency
Book’ was $48 and he had this book.
He was complaining that his book was higher than his friends so I
asked him:
“You are charging $48 to size a ring smaller. If 10 people come in
for a repair and you quote them from the book, in this case $48 to
size smaller; how many people say ‘OK, do it’?”
He said virtually all of them.
“So let me get this straight. 10 people come in and pay the $48 and
have been this way for 5 years now, right?”
“Yes sir, that correct.”
“So why are you complaining? You’re making more money and even more
than your jeweler friend at $39. Why are you complaining?”
Want to know his answer?
Get the same answer every time:
-
We are in a small town. (46,000)
-
There’s lots of competition
-
I don’t want to over charge my customer.
-
The guy down the street charges less than we do.
He told me the same exact thing, word for word.
I told him no one forces the customer to buy and let me ask you
these questions (answer follows in bold)
-
How long have you been doing bench work? 20-25 years
-
Do you consider yourself good at this? Yes, many jewelers around
here ask me how to fix something or help them do a job they can’t do -
Do you guarantee your work? Absolutely we do
-
How long do they have to wait to get their work? I get their jobs
back in 3 days -
Do other stores have the same expertise & ethics as you? NO!
Both stores have a 90% closing ratio. One gets $39 and the other
gets $48.
You know why they get it? (Are you going to tell me repairs are not
price sensitive but trust sensitive? True but…) It’s because I
told them to charge it and 90% of the customers say “Oh, O. K., go
right ahead”.
I then asked this jeweler “Can you draw?” He said “Yes, pretty good”
“Then how much would you charge to draw a picture of me? If it took
you an hour would you charge me maybe $150?”. He said that sounded
reasonable.
So I then said “well there’s a guy next to your store and I had him
also draw my picture. It took him an hour and he charged me $10,000
and it was the most stupid picture of me ever! Do you know who drew
my stupid ugly picture, not as good as you would and charged me
$10,000?”
Some nut case named Picasso.
You are your own Picasso of the bench. Be proud of the fact and get
paid for it.
Ten grand? Unbelievable.
You’ll get what you ask for. Ask for $32 and I promise 90% will say
YES. Ask $45 and I also promise 90% will say yes.
Jewelers are their own worst enemy,
David Geller
Director of Shop’s Profits
jewelerprofit.com