IN ONE WEEK recently, I had a conversation with two jewelers about increasing their repair prices, and both were skittish to do so. Neither jeweler had raised their repair prices in many years!
One was a jewelry store who uses a consultant who told them they’d run customers off if they raised their prices too much too soon. This is crazy.
Then I heard from a jeweler who also does trade work for other stores and he wrote me:
“The issue that we are working with is the steep increase in the prices we would have to charge to be in line with the Geller book. Do you have any suggestions for raising prices without having our customers suffer too much sticker shock? Any help you could give would be greatly appreciated.”
I keep hearing this crazy crap all the time. Why do people think customers will drop dead if you quote $100?? Hey folks, we are not talking about buying a weekly staple like that is price sensitive like food, gasoline, or phone or internet service.
The consultant told the first store, “You’d run customers away if you raised your repair prices all at once.” (This made me so mad I could see stars!) The consultant told the store to raise their prices 10 percent per QUARTER.
Let’s look at the numbers. First off, do you think a customer comes in your store once a quarter to get a ring sized (4 times a year)? I did a survey in my store. We serviced/sold a customer and typically wouldn’t see them for another 18 months.
Our previous book for sizing a ring smaller was $42, and now, two years later, it’s $50. This is sticker shock?
If you take the consultant’s theory and raise prices 10 percent a month, here’s the math, starting in 2021:
- Jan. 1, raise sizing price from $42 to $46
- April 1 raises sizing to $50 (already at my new price in 90 days)
- July 1 raises sizing to $54
- Oct. 1 raise price to $58
See what happened? Why go through this? Make the one-time adjustment.
Across the USA, the price to size a yellow gold engagement ring smaller ranges from $32 to $85. Yes, you read that right, and ALL of these stores have a 90 percent closing ratio.
We add another $55 to the price to rhodium-plate. Some people charge an extra $10 (your cost for rhodium is more than about that), and some stores add on an additional $75 (typical rhodium add-on is $45 to $85). So sizing a white gold ring smaller is easily over $100.
All of these stores (from $32 to $85) sell 90 percent of customers who come in the store. It’s trust sensitive and they will pay.
So, what does cause sticker shock? BUYING Jewelry! Large diamonds and colored gemstones (man, have they gone up in the last few years).
Which would shock you? A center round diamond for $6,100, or sizing a white gold ring smaller, with checking and tightening 20 diamonds in the ring and then applying rhodium plating solution for a mere $105? The rhodium plating solution itself cost the store almost $1,500 for a one-pint bottle.
Come on, this is a crazy thought that raising repair prices would run off customers. Repairs have always had a 90 percent closing ratio. Raising prices does not run off customers, and if it does, you’ll still sell 8 or 9 out of 10 day in and day out.
In the last five years, have gold, silver and platinum gone up in cost or down? So, have your sales increased or decreased in five years? I’m betting they went UP, and I’m betting your customers are buying as everything in their life has gone up.
Don’t make me come back there and get you!