We have been in bad economic times ever since I’ve been in the
business, depending on who you listen to. Just after my family
started in jewelry, there were real gas and heating oil shortages,
not just high prices. There were gas lines, a 55 mph national speed
limit, heating oil rationing and gold and silver were reaching new
record highs almost every day, that when corrected for inflation,
haven’t been broken to this day. We had double digit inflation so
high and long termed it was called “stagflation”, interest rates and
unemployment were both well into the double digits, and there was
genuine negative economic growth, quarter after quarter for more
than a year. The press coined the term “Misery Index” to measure it
all and President Carter referred to it as a period of “economic
malaise”. Now, again, for at least the third time in as many decades
we are hearing “this is the worst economy since the Great
Depression.” I’m not buying it. It’s been worse, a lot worse and not
all that long ago, only thirty years or so. And in the midst of all
that, people started new businesses and prospered.
That being said, right now is a tough time and as always, tougher in
some areas than in others. But whatever part of the economic cycle
(and it is a cycle) we are in, there are always opportunities
alongside the challenges. When things are rocking, like in the
eighties and nineties, there are obstacles. Back then there were
pocket jewelers (people that sell jewelry out of their pockets) all
over the place. Seems that anyone and everyone with a few extra bucks
figured that they could make a killing selling jewelry. There were
hundreds of new retail jewelers opening their doors every year. That
just made the competition all that harder. But it also provided an
opportunity for metalsmiths. Those people couldn’t set the diamonds
they were selling, they couldn’t size the rings they were selling,
and they needed someone that could make just the right piece for
their customer.
Now with the economic downturn we are in, those folks have for the
most part thrown in the towel and went back to work doing whatever it
was they were doing before. The people that opened retail outlets in
the good times are finding it a lot harder than it used to be and are
not willing or able to change with the times and are closing their
doors. That’s making a bigger slice of the pie available to anyone
with the courage and talent to start. If you can get started (or at
least keep your head above water) now, when things pick up again (and
they will) you will be in a much better position to deal with all of
those new pocket jewelers and new retail outlets that will be trying
to elbow their way into your livelihood.
Another aspect of this is that what was hot ten years ago, will be
last week’s news. Each new cycle brings with it a new set of needs
and priorities for our customers, and new methods of filling those
needs. Look at the foot traffic in malls. Malls used to be the
hottest thing since sliced bread, now they’re closing down in record
numbers. Freidman’s and Whitehall, two of the biggest mall chains
ever, both just went belly up. People seem to be spending more time
at home and at the office shopping for jewelry on-line and making
one-stop trips to specific destinations as opposed to buying at shows
and shopping multiple brick and mortar stores. Opportunity or
adversity? People that are going to be successful will find
opportunity in what looks at first glance to be adversity. People
that see only adversity, will experience only adversity.
I’m not saying it’s all roses, only that it’s not all thorns.
Our gross sales are up almost 40% over last year to date, and last
year was 35% over the year before that. Our average ticket is up
around 30% over last year, the number of tickets is up significantly
and our margins are up as well. We do no advertising, not even Yellow
Pages. Part of that is because there are so many other retailers
closing up, part of it is that we are in an area of the country that
isn’t feeling the pinch as badly as other areas are. Another (and in
my opinion the most important) reason is that we are sticking with
the basics - high quality craftsmanship, high quality customer
service, fair prices and doing what we say we are going to do, when
we said we would do it. My Grandpa used to say if you do that,
you’ll beat out 95% of your competition, right out of the gate. He
was right.
The one constant with the economy is inconsistency. Anyone waiting
for someone to come along and make it all better could be in for
quite a wait, and might be setting themselves up for a
disappointment. The economy isn’t controlled by any one person or
group of people, any more than is the price of gold. It is you and
me, and everyone else that buys or sells anything that determines the
direction and strength of the economy. You have far more control over
your own personal economic destiny than any politician or political
party. Don’t wait for someone else to change your fortunes. You have
the power. No one else.
Dave
