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David Geller

David Geller: Ask Already

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If you’re not getting the prices you want, David Geller says it’s because you’ve never asked.

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[h3]Ask Already[/h3]

[dropcap cap=Y]ou’ll be amazed at what you’ll get if you just ask! Many times it takes a lot of guts to ask … but you’ll be amazed at what you get if you do.[/dropcap]

Over the past few weeks I have spoken at a number of jewelers’ gatherings. And as I went around the shows, I was amazed at the huge differences in prices that jewelers ask for the various services they perform. And also how these prices provide insights into exactly how each jeweler feels about themselves, their customers and their businesses.

I have mentioned in the past that the stores that make the most money charge the most for their products and services. Sounds like a no-brainer, right? But do you know why it works? Because they ask. Here are some examples of the great things that can happen when you start asking for what you want and deserve:

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[h4][b]Example 1[/b][/h4]

There was one bench guy who had a trade shop doing fine fabrication. He was almost starving, working 12- to 15-hour days for peanuts. He started posting some of his work on a large Internet diamond discussion group and began to get orders from young people who had purchased loose diamonds online and needed a fancy/schmancy engagement ring made. He doubled his price (as you’d expect) to these retail clients, and because of word-of-mouth on the website, he’s booked months in advance for engagement rings and three-stone rings. As times goes on, he’s raising his prices more. He now requests a $600 “design fee” to even create a rendering before he ever gets to doing the wax (he uses CAD/CAM). He started at $200, went to $500, and is now at $600. He says he has no problem getting the money from his customer. His typical handmade engagement ring mounting starts at $1,400 for a single stone and $2,400 for a three-stone design. No stones (the diamonds are supplied by his clients), just metal and labor. And he’s getting these top-dollar fees from some notoriously cheap customers — kids buying their diamonds on the Internet.

[h4][b]Example 2[/b][/h4]

In my seminars, I always find someone to pick on who does their repair work so cheaply that the whole class goes “Oh, my gosh” when they hear the price. In the afternoon class here in Atlanta, the price of sizing rings smaller ran from $12 to $35 with pretty wide dispersion along the way. Consistently, those at the lower end of the spectrum tell me: “I can’t get the money you’re suggesting. My customers won’t pay.”

And just as consistently, I answer them: “You’re charging $12. How do you know they won’t pay $20? Have you ever asked anyone in your store to pay $20?” The answer is ALWAYS no … these retailers simply know their customers won’t pay.

And I know they will. And the reason is that over 6,000 stores in America have one version or another of my book, and successfully charge the prices listed inside. And when I ran my store, it did $1.8 million in sales —three-quarters of them coming from the shop, which translates to over 8,800 jobs a year. I’ve asked! They will pay. Other store owners who use my book tell me that when they ask for the money, on average nine out of 10 customers will pay.  

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Nine out of 10. Is that a number that you need to be afraid of? If you’re too afraid to ask, you’ll never know. Think about this. You probably ask dozens of people to buy your diamond or rings. How many buy? Is it three out of 10? Five out of 10? Most don’t, do they? But you ask, anyway. So why not try asking for the right repair prices. I promise you, 90% of those you ask will say yes. Just ask.

[h4][b]Example 3[/b][/h4]

A jeweler told me this weekend that he works out of his house and does repairs and custom design. The fact that he works out of his house is important because it means his overhead is low. And everyone knows that lower overhead means lower prices.

Well, do you know what this low-overhead independent charges to size an engagement ring smaller? Seventy to 80 dollars. I thought I’d heard him wrong, and said “No, I didn’t mean to do the shank. How much to size?” But that was his price to size a ring. His approach: “I tell customers right up front, ‘I’m not cheap and if you want to go someplace else I understand. But I do the best work in the county’. And they all pay.” With such confidence, it’s easy to ask.

[h4][b]Example 4[/b][/h4]

Many times, I come across this scenario:
a true, old-style, Mom and Pop store do okay for a number of years. But after a while, they start coasting. They bring in the son or daughter and the kids hit a brick wall. This one company does wholesale design using CAD/CAM and has a retail store downstairs. Their wholesale charge to make a handmade three-stone stone engagement ring is $450. Ouch! The same ring wholesale in New York is over $750. And retail, it goes for $1,500 to $2,000. Compounding matters, they end up waiting three to six months to get paid. This is a store where the managers get what they ask for: low prices. Even worse, they haven’t increased their prices in years. The son does understand the need to get more, and quotes prices substantially higher than his father. But the father is still living in the 1970’s, and getting paid like it, too. (Maybe he thinks he’s saving up to buy a brand, spanking-new AMC Pacer?)

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[h4][b]EXAMPLE 5[/b][/h4]

A storeowner couple that I’m in contact with had told me that they were ready to throw in the towel. Sales were dropping and they were being hurt by their no-discount, “always-low-prices” policy. They would explain to their customers till they were blue in the face how they didn’t play that discounting game. But their customers would still walk, anyway.

So in January they retagged every single item in the store — changing their retail prices to four times cost. Loose diamonds and other easily compared items like studs were tagged at three times cost.

And now they discount 50% off of the tag. Of course, I was skeptical of the approach and asked how it did. The first full month they tried this approach, their sales tripled over the previous month. And they are planning to do it again soon. They said customers don’t care about the price, only how much discount they can get.  

So now a majority of their sales are at keystone … and for loose diamonds and studs they are getting 50% above cost. They are asking the same price as they did before, but now they are getting it.

But these people are more savvy than others I’ve spoken to. They researched the idea before they tried it. The wife told me her research entailed watching the Home Shopping Network and Jewelry Television. Here’s what she saw: “They have a ring that has a manufacturer tag at $5,500, but today it’s only $3,100. And our price for this hour is $2,495. I looked at the TV screen and saw the ticker show how many hundred and thousands of things they sell. Then I checked the Internet jewelry websites and saw how they marketed. I couldn’t lose, we were already ready to quit anyway. We’re now making money … and when you make money, retailing can be fun!”

See what you get if you just ask?

David Geller is an author and consultant to jewelry-store owners on store management and profitability. E-mail him at [email protected].

[span class=note]This story is from the June 2005 edition of INSTORE[/span]

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