Connect with us

David Geller: Pingpong Pricing

mm

Published

on

David Geller: Pingpong Pricing

David Geller: Pingpong Pricing

Know your costs before pricing repairs

BY DAVID GELLER

David Geller: Pingpong Pricing

Published in the October 2013 issue.

If your jeweler gives you his suggested repair price list, toss it out!

Wouldn’t you like to know your cost of doing a repair before installing a price list from someone who doesn’t know your costs?

Advertisement

First off, you shouldn’t have a price list for anything without knowing your costs. Would you buy any inventory items if you didn’t know your costs? There are several costs in repairs and custom, and your jeweler is not privy to most of them — nor is he aware of your profit goals.

I recently spoke to a store that charged between $50 and $75 to make a gold ring smaller. Great! But they charged less than $150 for a half shank as the jeweler thought “over $200 is too much money.”

Go back to the bench jeweler telling you “No one will pay those prices,” and tell him, “Poppycock!” Repairs are not price-sensitive, they are trust-sensitive.

I have spoken with thousands of jewelers about their successes and failures in charging for repairs and custom design.

Failures? Few. No matter what you charge, you’ll have about a 90 percent closing ratio. A few jewelers have mentioned that repair traffic has fallen off somewhat. It’s not what you’re charging, it’s that most of America has melted the old broken items that were lying around for years!

Successes? Lots. Over 90 percent of jewelers I talk to say that raising their repair prices increased profits and cash with virtually no drop off in customers saying, “Yes, please fix it.”

Advertisement

In most cases, whatever number you say, customers will pay. Don’t believe me? Try this: Take some pingpong balls and write a number from $10 to $100 in $10 increments. Pull out one each day and charge that amount to size a ring smaller. Up to $70, you’ll easily still have a 90 percent closing ratio.

Now, about that shank installation price your jeweler was complaining about: If you size a ring smaller for $39, isn’t installing a shank 2.5 times the work of sizing a ring? So labor to install a shank would be $98.

If you had a piece of jewelry in your case that cost you $50, what would you charge? Triple key!

A half shank easily costs $50 and should thus also sell for $150. Add $98 to install it, and a complete half shank job should be priced at $248. If you charged $150 per your bench jeweler, you would be selling the gold profitably but installing it for free.

If you have a busy jeweler who is paid $45,000-$55,000 a year and you’re buying about $1,000 a month from suppliers and expecting a three-time markup from the shop, then your shop sales should be between $185,000 and $250,000 a year!

If you’re not producing in that range give back your jeweler the price list and charge what you need to charge to make these numbers.

Advertisement

You won’t run customers off. You’ll just need to train your staff how to charge for a repair and explain the costs to the few customers who ask.

Advertisement

SPONSORED VIDEO

Retiring? Let Wilkerson Do the Heavy Lifting

Retirement can be a great part of life. As Nanji Singadia puts it, “I want to retire and enjoy my life. I’m 78 now and I just want to take a break.” That said, Nanji decided that the best way to move ahead was to contact the experts at Wilkerson. He chose them because he knew that closing a store is a heavy lift. To maximize sales and move on to the next, best chapter of his life, he called Wilkerson—but not before asking his industry friends for their opinion. He found that Wilkerson was the company most recommended and says their professionalism, experience and the homework they did before the launch all helped to make his going out of business sale a success. “Wilkerson were working on the sale a month it took place,” he says. “They did a great job.”

Promoted Headlines

Most Popular

David Geller

David Geller: Pingpong Pricing

mm

Published

on

David Geller: Pingpong Pricing

David Geller: Pingpong Pricing

Know your costs before pricing repairs

BY DAVID GELLER

David Geller: Pingpong Pricing

Published in the October 2013 issue.

If your jeweler gives you his suggested repair price list, toss it out!

Wouldn’t you like to know your cost of doing a repair before installing a price list from someone who doesn’t know your costs?

Advertisement

First off, you shouldn’t have a price list for anything without knowing your costs. Would you buy any inventory items if you didn’t know your costs? There are several costs in repairs and custom, and your jeweler is not privy to most of them — nor is he aware of your profit goals.

I recently spoke to a store that charged between $50 and $75 to make a gold ring smaller. Great! But they charged less than $150 for a half shank as the jeweler thought “over $200 is too much money.”

Go back to the bench jeweler telling you “No one will pay those prices,” and tell him, “Poppycock!” Repairs are not price-sensitive, they are trust-sensitive.

I have spoken with thousands of jewelers about their successes and failures in charging for repairs and custom design.

Failures? Few. No matter what you charge, you’ll have about a 90 percent closing ratio. A few jewelers have mentioned that repair traffic has fallen off somewhat. It’s not what you’re charging, it’s that most of America has melted the old broken items that were lying around for years!

Successes? Lots. Over 90 percent of jewelers I talk to say that raising their repair prices increased profits and cash with virtually no drop off in customers saying, “Yes, please fix it.”

Advertisement

In most cases, whatever number you say, customers will pay. Don’t believe me? Try this: Take some pingpong balls and write a number from $10 to $100 in $10 increments. Pull out one each day and charge that amount to size a ring smaller. Up to $70, you’ll easily still have a 90 percent closing ratio.

Now, about that shank installation price your jeweler was complaining about: If you size a ring smaller for $39, isn’t installing a shank 2.5 times the work of sizing a ring? So labor to install a shank would be $98.

If you had a piece of jewelry in your case that cost you $50, what would you charge? Triple key!

A half shank easily costs $50 and should thus also sell for $150. Add $98 to install it, and a complete half shank job should be priced at $248. If you charged $150 per your bench jeweler, you would be selling the gold profitably but installing it for free.

If you have a busy jeweler who is paid $45,000-$55,000 a year and you’re buying about $1,000 a month from suppliers and expecting a three-time markup from the shop, then your shop sales should be between $185,000 and $250,000 a year!

If you’re not producing in that range give back your jeweler the price list and charge what you need to charge to make these numbers.

Advertisement

You won’t run customers off. You’ll just need to train your staff how to charge for a repair and explain the costs to the few customers who ask.

Advertisement

SPONSORED VIDEO

Retiring? Let Wilkerson Do the Heavy Lifting

Retirement can be a great part of life. As Nanji Singadia puts it, “I want to retire and enjoy my life. I’m 78 now and I just want to take a break.” That said, Nanji decided that the best way to move ahead was to contact the experts at Wilkerson. He chose them because he knew that closing a store is a heavy lift. To maximize sales and move on to the next, best chapter of his life, he called Wilkerson—but not before asking his industry friends for their opinion. He found that Wilkerson was the company most recommended and says their professionalism, experience and the homework they did before the launch all helped to make his going out of business sale a success. “Wilkerson were working on the sale a month it took place,” he says. “They did a great job.”

Promoted Headlines

Advertisement

Advertisement

Subscribe


BULLETINS

INSTORE helps you become a better jeweler
with the biggest daily news headlines and useful tips.
(Mailed 5x per week.)

Latest Comments

Most Popular