A Letter From David Geller (Beware, He’s Miffed)

THIS LETTER is addressed to YOU, the store owner who has my Geller Pricing Book who said:
“That David Geller is a complete nut case; he doesn’t know my city and his prices won’t work here. We’re not a big city like Atlanta. Where does he come off telling me what to charge!”

Yep, I’m talking to you.
I heard this quote a while back:
“If you’re so damn smart, why ain’t you rich?”

First let’s address “David Geller is nuts.” Yes I am, but that’s how I’m able to put up with my fellow nut-case jewelers. But that’s a different story.
I get e-mails from employees, spouses and jewelers themselves telling me “we can’t charge those prices, it will run customers off.”

So let’s discuss running customers off. You’re doing that right now without my help. Yep, it’s you, not me. It can’t be me … you bought the book and put it on a shelf someplace, maybe next to your bench. You don’t use it, you haven’t even tried it. Wimp.

So how are you running people off? Simple.

David Geller has nothing to do with showcase sales, right? That’s your baby. 10 people walk in today and look in the case and say, “Let me see that ring” or “My wife’s birthday is Saturday” or “Do you have a bracelet to match this necklace?”

So you show 10 people something, how many actually buy?

Two out of 10? Three out of 10?

Typical American jewelry store sells three people out of 10. I’m betting you’re pretty typical. You’re surely not exceptional.

If that’s you then you’re the nut case! You bought one-quarter million; half million or even $1 million in merchandise, it sits there in the case and seven out of 10 people walk!

 What are you doing to turn them away?
 
Who cares? I had nothing to do with that.

Now lets talk repairs. Ten people come in with a repair and ask:

“How much to size my ring?”

“What will it take to replace this lost diamond?”

“Can you shorten this chain?”

How many people out of 10 say “Alright, go ahead and fix it?”

Typically across the country, I hear that nine out of 10 say yes.

And guess what nut case? It doesn’t matter what you charge, nine out of 10 will always say “OK.”

Remember when you charged $15 to size a ring smaller and went up a whopping five bucks to $20? That’s a 33 percent increase in your prices! What happened?
Absolutely nothing!

Why is that? BECAUSE REPAIRS ARE NOT PRICE SENSITIVE, THEY ARE TRUST SENSITIVE!

So why are you so against raising your repair prices? Typical price to size a ring smaller is $18 to $65. Guess what? The $18 store sells nine out of 10 as does the $65 store.

There’s two reasons why you ’re a wimp and won’t try it:

1. Because you’ve been doing this so long you think you know what your customers will pay. Ha! You don’t know anything. In 2006 you bought a wedding band for $100 and sold it for $250. Then you had the audacity to raise the price by 50 percent! Yes you did; you now sell it for $375. How dare you? What gives you the right to raise your prices 50 percent on product but you won’t even raise your prices on repairs? You think cost of repairs didn’t go up? Call Stuller at (800) 877-7777 and ask them if they’ll sell you a lobster claw today for what they sold it for in 2006. Ask if they’ll sell you a mother’s ring mounting for the same price they did in 2006. Or maybe casting grain. Go ahead, tell him the “repair profit guru” told you to call. They know me. They sell my book for Pete’s sake?

Here’s the real reason why you won’t use my book:

2. You only sell three people out of 10 something from the case. You let seven people walk and leave you with all of that old inventory. That doesn’t bother you. When they leave and don’t buy it’s for a few reasons. Wanna guess the reasons? How about:
a. You didn’t have what they wanted.
b. Poor selection, or maybe
c. Your price was too high!

How does a customer who doesn’t buy your product because of price vocalize that to you? They leave and might say:
a. I’ll be back.?
b. I’ll think about it.?
c. I’ll have to ask my husband.?
d. We’re still looking.

Do they ever say “Man you must really think a lot of yourself. Do you really think I’m going to pay THAT much for that? There’s 100 people selling that and you can be assured I’m not buying it here!”

No, they don’t say that but they are thinking that and if they are serious they are going to buy it SOMEPLACE, just not with you. But those people are polite and just say “We’ll think about it.” You then go to the back room, where your spouse or associate says “So….did they buy?” What do you say?

“No, but they’ll be back.”

Now let’s discuss the repair customer:

You’ve already agreed that if you give 10 repair quotes, eight or nine say “Okey Dokey.” So now the question is “How do the one or two people who will not pay your repair price let you know they won’t buy or it’s too high?”

I’m betting most don’t say:
a. I’ll be back.
b. I’ll think about it.
c. I’ll have to ask my husband.
d. We’re still looking.

I’m betting after you quote a repair price and if its too high that the one person in 10 who leaves looks you square in the eye and yells at you:

“Are you crazy man? Do you think I just fell off the turnip truck or landed here yesterday? This ring didn’t cost that much to pay for your kid’s college education. I’m never coming back here again and I’m telling all of my friends. I was going to buy a $10,000 diamond from you, but noooooooo, not now. $65 to fix this ring. That’s absurd!”

There you have it. Product customers are polite. It doesn’t bother you that 70 percent of polite product customers walk. But one grey haired, little old lady yells at you and gives you a stomach ache about a repair price so bad you have to reach for the Pepto Bismol and you run screaming to the back and yell “That David Geller is crazy. I was right. NO ONE will pay those crazy repair prices.”

No one? One out of 10 is no one? Sheesh!

I’ve had some stores tell me that in the beginning, if they were selling nine or nine and a half out of 10 and they used my book it could have dropped back to only eight out of 10 buy a repair. One more person (two total) leave. But their shop sales easily increase 25-50 percent. Many doubled their shop income. After they become familiar and comfortable with it and see how well it works, it shows up in their explanation to the customers and their closing ratio goes back up.

You make more money with less work and that bothers you. But no, you’d rather work until midnight sizing rings and installing shanks, working out a meager existence so you can take one-third of your hard-earned shop profits and put it into the showcase inventory to sit there for two to three years before that stuff sells and all along 70 percent of the people won’t buy it! Man, I wish you were there when I started in 1974. Sure could have used this valuable piece of information from such a business genius guru such as yourself.

Your job is not to go through life, die, be buried and have this on your tombstone:

Here lies Joe the Jeweler?.
He sized every single ring that was?
Brought into his store?
Praise the lord that we had Joe
MAYBE it just might be better to come home and say
“Hi honey, paid off all of our vendors today. Let’s eat out tonight!”

So for you folks who think I don’t know your customer nor your town, you’re dead wrong.
a. Been there, done that?
b. I talk to and visit to more jewelers than you have friends from high school?
c. Matt Stuller has the gall to charge every retailer the same for his 10x4mm 14kt lobster claw across? the U.S. no matter if you’re in Manhattan, Atlanta, Boise, ID, Wichita, KS, St George, UT or? Tyler, TX. He also suggests a triple key markup
d. The only real difference in repair prices then has to be either you want a low markup or its your? labor cost is lower.

So if your labor cost is lower than mine, fine. I figure labor at $40,000 to $50,000 a year. One jeweler who balked about me being a nut case is the bench jeweler and the store owner who takes home more than $50,000 a year. So his labor cost to size a ring is even more than my book. But even if you pay a jeweler $30,000, don’t you think it’s time to give them a raise? Who wants to work for you as a trained craftsmen for that little wage?

So here’s the challenge to you. Yes you! The one who thinks folks won’t pay. This winter was a real bear. Even here in the sunny south we had snow and ice. It was reported that 49 out of the 50 states had snow in February. So if you were in an area with tons of snow and people stayed home and even worse you had to close the store for a few days, did your store go out of business? Go bankrupt with such little traffic? No! If you can survive when there’s little traffic because of the weather, then take a chance. Try the Geller book for one week. If 10 out of 10 people say “No way,” would you close up? No!

So just do what so many other people have done.

Just use the book for one silly week. Start on Monday. Open the book, point to the price and say “and that’s all it’ll be.” Don’t gulp, don’t apologize. Just point.
If the customer asks why it’s that much, don’t say that dumb stuff you’ve been saying, like:

“Hey lady, that’s our price,” or “The other guy must know the value of his work. “Fine, then take it there. “OK, fine, I’ll give it to you for less.

Instead try to explain, without apology how the work is performed. Tell them about your expertise and years of experience. Because after all is said and done, my whining jeweler friend, your wedding band or ring they might buy can be shopped down the street or on the Internet but don’t think for a moment that this lady can buy the same “ring sizing” down the street as they can from you. That store doesn’t have one thing your store has:

You!

This next paragraph is true and this is what I’d tell my customers when they asked about the price. This is true, you may have not known this about me:

“Mrs. Jones. I know you think this repair is a simple one but it takes a lot more expertise than what you might think to do it correctly. We’ll size the ring so you can’t tell that its been worked on, we’ll check and tighten the stones and guarantee them for a year and completely refinish the ring so it looks just like the day that your husband gave it to you.

In addition, we can’t hire 75 percent of the jewelers who apply for a job here. They just can’t cut it. In fact, as the main jeweler here, I’ve been doing this since I was 10 years old. I’m a 14th-generation jeweler and have set diamonds and emeralds valued at $100,000 each. In owning this store for 25 years, this is the kind of expertise that will be working on your ring. You do want this kind of expertise, don’t you?”

After explaining this to a customer, can they turn you down? Can they possibly buy they same expertise down the street? No way.

So to arm yourself with this ammo, ask your jeweler or yourself these questions so you can answer them easily, quickly and without hesitation:

1. How long have you been doing jewelry work?
2. How long have you worked for this company?
3. What’s the most expensive thing you’ve ever worked on in your whole career?

After you’ve answered these questions and express them to the customer you’ll be able to answer in a professional manner and still keep an 80-95 percent closing ratio.

I know how much a repair really costs. Based on the fact that most everyone needs a three-time markup on a measly $65 sale (average repair sale) my repair price book is about the prices you should charge.

You should be more worried about the seven people who walk out of your store, not buying the stuff in the cases, leaving you with a quarter to a million dollars of unsold inventory than worrying about the one of two people out of 10 who won’t pay for a repair. Because I can tell you that if the repair was 30 percent less these people wouldn’t pay that price either.

You really get my dandruff up.

What do you want written on your tombstone?

Sincerely?

David Geller
(aka The Repair Profit Guru)
P.S. I’d suggest you print this out and lay it in the bench pan of the culprit I’m talking to. Let’s see how much guts they’ve got!
P.P.S. After most of my e-mails, I don’t know why usually 1 or 2 people unsubscribe. Amazingly within the next week 6 more come on board. I expect from this email 6 of you will drop off. Wimps