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

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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!

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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]

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Retirement Made Easy with Wilkerson

The store was a landmark in Topeka, Kansas, but after 80 years in business, it was time for Briman’s Leading Jewelers to close up shop. Third generation jeweler and owner Rob Briman says the decision wasn’t easy, but the sale that followed was — all thanks to Wilkerson. Briman had decided a year prior to the summer 2020 sale that he wanted to retire. With a pandemic in full force, he had plenty of questions and concerns. “We had no real way to know if we were going to be successful or have a failure on our hands,” says Briman. “We didn’t know what to expect.” But with Wilkerson in charge, the experience was “fantastic” and now there’s plenty of time for relaxing and enjoying a more secure retirement. “I would recommend Wilkerson to any retailer considering a going-out-of-business sale,” says Briman. “They’ll help you reach your financial goal. Our experience was a tremendous success.”

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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.

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[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!

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].

Advertisement

[span class=note]This story is from the August 2008 edition of INSTORE[/span]

Continue Reading
Advertisement

SPONSORED VIDEO

Wilkerson Testimonials

Retirement Made Easy with Wilkerson

The store was a landmark in Topeka, Kansas, but after 80 years in business, it was time for Briman’s Leading Jewelers to close up shop. Third generation jeweler and owner Rob Briman says the decision wasn’t easy, but the sale that followed was — all thanks to Wilkerson. Briman had decided a year prior to the summer 2020 sale that he wanted to retire. With a pandemic in full force, he had plenty of questions and concerns. “We had no real way to know if we were going to be successful or have a failure on our hands,” says Briman. “We didn’t know what to expect.” But with Wilkerson in charge, the experience was “fantastic” and now there’s plenty of time for relaxing and enjoying a more secure retirement. “I would recommend Wilkerson to any retailer considering a going-out-of-business sale,” says Briman. “They’ll help you reach your financial goal. Our experience was a tremendous success.”

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