GOLD’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.
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.
But jewelers look at the bill from vendors, see a 35-percent increase and say, “Oh my God! the customer will never pay!”
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.
This story is from the August 2008 edition of INSTORE.