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Whining Jewelers


#1

Just came back from a store visit in North Carolina. I usually have
dinner the night before with the store owner and key personnel. (Get
a chance to raze the waiters). I’m adamant about repair pricing and
this store was picking and choosing prices from my repair price book
He tells me “up here we can’t get those prices.”

But “up here” they are paying “New York” prices. In other words they
are paying $38,000 and $48,500 a year for a jeweler. $40,000 -
$50,000 per year for a jeweler is what my prices are based upon. So
he’s got high labor costs and probably low prices.

I spent a lot of time setting up QuickBooks and showing them the
secrets and ways around Shopkeeper, which they have used for years.
They were amazed when I showed them the price points of which they
sell individual categories, like the sold 4 engagement rings last
year in the $1000-$2000 category but have SEVEN in stock.

On the last day I’m helping the bookkeeper and overhear behind me
the owner and the jeweler. The owner decided maybe its a good time to
take a second look at using “Geller’s Price Book”. They begin looking
at a custom job. Their typed out price list has bead setting at
$12.00 a stone. The jeweler is telling the owner that if he needs to
lay out the stones, drill the holes, set and bright cut that it’s
more work and should be $18.00 per stone. My book shows $20 per stone
is the holes are already drilled and $32 per stone if they are not
drilled and they must layout the stones and drill.

I interrupt them:

“Excuse me, may I ask you a question?”

The jeweler says sure.

“Hypothetically, if we took you off of salary, would you accept as
pay to set the stones one fourth of $18.00 per stone you’re charging
to set the stones?”

His response was “What is one fourth of $18.00?”

Roughly $4.50 each stone.

“Nope, don’t think I’d do it for $4.50 with all of the time
required.”

I answered “Well paying you a fourth and adding in matching FICA,
Medicare, vacation and such, it will end up costing the store one
third and isn’t the store looking for a 3 time markup on your labor?”

“They should be” was his answer.

So I asked “Well, if you won’t so it for $4.50 per stone, what will
you bead set the stones for per stone?”

He thought for a long time and said "$8.00 per stone, no less.

So I said “So if you won’t do it for $4.50, but will for $8.00, then
at $18.00 per stone that’s not even keystone once you add in matching
taxes, right?”

He shook his head; the owner is just listening intently.

“So if you want $8.00 per stone and to get the right price that’s
one fourth of what we should charge, what is four times eight?”

He said"$32.00".

So I asked “What’s the price to bead set non-predrilled stones in my
price book in Chapter 300?”

He looked and said “It’s $32.00 in your book.”

B I N G O !

"That’s exactly how we got the price, whining jewelers!

David Geller
www.jewelerprofit.com


#2

Well we sure do see lots of variables in pricing. Just for
perspective, I’ll share some price quotes from downtown Los Angeles
subcontractors. These guys do piecework for major manufacturers, and
often compete with “offshore” labor. I do not advocate these prices
this is just a report of how low some will go to stay in it. This is
not to be confused with jewelry store bench work.

Channel setting $1.00 to $1.50 per stone
Prong setting $.50 per stone
Finish one ring  $2.50
Cast 200 dwt tree of gold $15 (Customer supplies metals and treed waxes.)

Make 1000 grams of tennis bracelets again customer supplies gold and
alloys- $1000 to $1500 (Yes one dollar to one dollar fifty cents
labor per gram includes casting finishing, and setting.) Two tone
goods for $2.00 to $2.50 per gram.

As I see it, no need to go offshore for very competitive high volume
production jewelry.

This is how some are trying to compete with foreign labor. Yikes!

Daniel Ballard


#3

Hello all Re earlier post about low contracting prices. I cant
believe there are still fools in the western world willing to work
for such a low wage .Surely they are hurting themselves as well
as the whole trade . there is definite benefit in being generous to
your contracting stone setters and jewellers .A good contracting
jeweller is like an expensive car, if all you do is put gas in the
tank and thrash it eventually it will refuse to go any further .You
have to maintain it,put oil in it, be nice to it and it will go for
years. I charge like a wounded bull and insist my retail customers
buy me gifts on a regular basis .Last week I told a customer it was
cold in my workshop and if i got sick and couldn’t work where would
they be, by the next day they bought me a nice oil heater. That’s
maintenance. How can a retailer make any money at all if they cant
get product made to a good standard by the due date . Sometimes a
contractor has to work all day and night at busy times while the
retailer is tucked up in his little bed without a single thought for
the people wearing their fingers down to the bone. Good contractors
are an important part of a good jewellery business and should be
rewarded appropriately.

Phil Walker
New Zealand