Connect with us

David Geller

David Geller: Find Hidden Profits in Gold’s Barrier-Busting Run

mm

Published

on

David Geller says profit can be found in gold’s prices-gone-crazy.

{loadposition davidgellerheader}

[h3]Find Hidden Profits in Gold’s Barrier-Busting Run[/h3]

[dropcap cap=G]old’s runup in price has opened a door for you to make more money from your repair department. Just don’t get scared when you look at the numbers.[/dropcap]

Prices have gone crazy, right? Just look at an Omega chain. A few years ago that necklace was $695. Now it’s easily $1,200-$1,495 retail. In the front of the store, you have to sell like crazy or buy lighter weight, often lower quality, merchandise so as not to price your customers out of the market.

[inset side=right]But jewelers look at the bill from vendors, see a 35-percent increase and say, “Oh my God! the customer will never pay!”[/inset]But what about your repair department? Well, things should be pretty calm there. The reason is that the increase in price for say a lobster claw isn’t really that much money, even if the percentage increase is large. A 16-inch, 4.0mm solid rope chain today retails for about $866. A few years ago that chain would have sold for $630. It’s 28 percent higher in price and the dollar difference is a whopping $236!

Advertisement

But let’s look at the lobster claw on that necklace. In my Geller’s Repair Price Book, the cost of repairing the clasp has gone up anywhere from $16 to $24. That’s a lot less than $236. (By the way, our price book has a three-time markup on parts but on lobster claws we use a four- to five-time markup and then we add in labor to solder. Why? Because I’ve seen others jewelers use a four- to 10-time markup, so I raised our prices to match them.)

Customers don’t flinch at repairing what’s now an expensive item (their chain) if it’s going to cost them $24 more. Hey, a tank of gas has gone up $24! How often do you buy a lobster claw?

But jewelers look at the bill from vendors, see a 35-percent increase and say, “Oh my God! the customer will never pay!”

Yes they will, and do! Why? Because repairs are not price sensitive, they are trust sensitive. If the customer trusts you, which is why she is in your store, she will pay that.

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 August 2008 edition of INSTORE[/span]

Advertisement

Continue Reading
Advertisement

SPONSORED VIDEO

Wilkerson Testimonials

A Liquidation Sale during a Pandemic? Wilkerson Showed Them the Way

For 25 years, Stafford Jewelers of Cincinnati, Ohio, was THE place to go for special gifts, engagement diamonds, high-end Swiss watch brands — in other words, the crème de la crème of fine jewelry. But this summer, the Stafford family was ready to retire. So, they chose Wilkerson to help them close up shop. “One of the biggest concerns was having the sale in the middle of COVID,” says Director of Stores Michelle Randle. Wilkerson gave the Stafford team plenty of ideas as well as safety guidelines, which they closely followed. “All of the employees felt safe, the customers coming in the door felt safe and we did a lot of business,” says Randle. How much business? “The inventory flew,” she says. Translation: They sold millions and millions of dollars-worth of merchandise. Randle calls it, “an incredible experience.” Would she recommend Wilkerson to other retailers who are thinking of thinning their inventories or retiring? “Everyone got more than what they expected out of the sale. You have to hire Wilkerson. They’re amazing.”

Promoted Headlines

Most Popular