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David Geller

David Geller: Prices Fixed

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Don’t let rising gold costs affect repairs, says David Geller.

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[h3]Prices Fixed[/h3]

[dropcap cap=B]esides being bombarded with competition from almost everywhere, now the things you sell to make a living have increased in price from 20 percent to 100 percent because of rising gold prices.[/dropcap]

To combat your average retail prices going up, you either have to sell like crazy or buy lighter weight merchandise.

[inset side=right]In fact, rising gold prices are an opportunity to boost your repair margins.[/inset]So how does this affect your store’s repair department? I’m still seeing the same closing ratios in most repair departments because a small increase in a higher priced lobster claw isn’t really that much money for their customers. In fact, rising gold prices are an opportunity to boost your repair margins.

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Consider that a 16-inch, 4mm rope chain has increased from $630 to $866 retail in recent years. The price to replace a lobster claw on that chain has gone up anywhere from $16 to $24 in that same period. A tank of gas has easily gone up $24! But how often does anyone buy a lobster claw?

Customers don’t flinch at repairing what’s now an expensive item (their chain) because the cost has gone up $16 or $24. But jewelers look at the bill from vendors, see a 35 percent increase and say, “Ohmygod — the customer will never pay!”

Yes they will, and they do! Why? Because repairs are not price-sensitive, they are trust-sensitive.

Track your closing numbers for a month. You’ll see that:

• For every 10 people who look in the case, only three buy.
• For every 10 people who ask about having something custom designed, six to eight buy.  
• For every 10 people who ask about having a piece repaired, nine out of 10 buy.

During a sales meeting, spend 25 percent of your time training the selling of repairs. Make the staff knowledgeable in how things are done, what to watch out for on take-in, and what to say when a customer acts surprised at a price.

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Don’t quote prices. Point to them and say, “That’s all it will be.” That’s the beauty of a price book. Speak a price and the customer squirms; point at it and they say OK.

Adopt a new attitude. Demand that your repair department spit out dollars each month right into the checkbook.

Ask your jeweler(s) these questions:

• How many years have you worked here at our store?
• How many years have you been doing jewelry repair?
• What is the most expensive piece of jewelry you ever worked on?

With this knowledge you can now teach the staff how to present your store versus the competition’s to the customer.  

A jeweler’s ability is hard to replace along with your personal guarantee. But easy to sell. Here’s the response to a customer when she says “Yikes! That much?”

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[inset side=left]… repairs are not price-sensitive, they are trust-sensitive. [/inset]“Mrs. Jones, your piece of jewelry is just beautiful. How long have you owned it? … Twelve years. Wow, that’s a long time. I want you to know that the care we take in restoring your prongs that are worn and resetting the three diamonds will be done by our very best jeweler.  

“Marvin has been with us for over seven years, and he’s been doing jewelry repair and design since he was knee-high to a grasshopper — over 22 years at last count.  

“On any given day he could be working on trinkets to treasures, and each item gets the same care and attention to detail as if it were owned by the Queen of England. Marvin has worked on pieces of jewelry worth almost $200,000 for the governor.

“Here at Smith’s Jewelers we can’t hire 80 percent of jewelers applying for a job. They just can’t cut it. With the expertise we have in our store to repair your treasures, Marvin’s your man. You do want that level of expertise, don’t you?”

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 January 2008 edition of INSTORE[/span]

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