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David Geller: Set Aside Some of That Gold For The Shop

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There are good profits and shop savings to be had from buying gold off the street.

{loadposition davidgellerheader}

[h3]Set Aside Some of That Gold for the Shop[/h3]

[dropcap cap=M]any jewelers are surviving the current slowdown by “buying off the street” and they’re having a banner year as a result. My recommendation is that you get on the bandwagon as most jewelers are getting keystone from their customers’ gold when sold to a refiner. That’s great money. But you know you could also use some of it to bankroll the shop.[/dropcap]

Why do this? Cost. Think about it. Gold’s at about $900 an ounce and if you buy sizing stock or findings you’ll easily pay 20-40 percent more than $900 an ounce for the supplies. After all, the gold suppliers have to make a profit too.

But if you buy from your customers at about half price (or $500 an ounce) you’ll be “buying low” as I believe it will be a long time before you’ll see $500 gold again. So don’t cash out all of the gold for cash.

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There are two choices for getting you a lower “buy-in” for findings and saving you lots of cash flow.

Send some of the off-the-street gold to a refiner, get a credit and leave the credit with them and order your findings as you need. Stuller, Roseco and Hoover & Strong are just three names that come to mind. You’ll get the parts you need without spending precious cash. Bill against your in-house credit.

In addition or in conjunction with the credit, buy some stock with your credit and keep it handy. Buy sizing stock, round wire and solder. In addition, stock up on findings you use a lot to keep from placing lots of phone orders. Shipping every day of the week gets expensive in the way of Fedex/UPS charges.

When I had our store, we kept on hand $25,000 of findings and sizing stock at all times. Some example of the findings we kept on hand were:

[dropcap cap=1.]14K yellow and white gold jump rings. A dozen of each size available.[/dropcap]
[dropcap cap=2.]Same thing for lobster claws. When the lobster got to be a large size, we stocked six of each.[/dropcap]
[dropcap cap=3.]A dozen of each size low base heads, and once it hit 1.25 carats in size, six of each size.[/dropcap]
[dropcap cap=4.]Three of each size 14K four-prong Tiffany-style heads, along with six prongs. etc.[/dropcap]

Buying off the street lets you buy $900+ cost findings for $500 an ounce. By using your scrap as credit you save cashflow and you’ll have more everyday items in stock and hopefully reduce your shipping costs, along with your ability to do repairs faster than normal.

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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 November 2008 edition of INSTORE[/span]

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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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David Geller

David Geller: Set Aside Some of That Gold For The Shop

mm

Published

on

There are good profits and shop savings to be had from buying gold off the street.

{loadposition davidgellerheader}

[h3]Set Aside Some of That Gold for the Shop[/h3]

[dropcap cap=M]any jewelers are surviving the current slowdown by “buying off the street” and they’re having a banner year as a result. My recommendation is that you get on the bandwagon as most jewelers are getting keystone from their customers’ gold when sold to a refiner. That’s great money. But you know you could also use some of it to bankroll the shop.[/dropcap]

Why do this? Cost. Think about it. Gold’s at about $900 an ounce and if you buy sizing stock or findings you’ll easily pay 20-40 percent more than $900 an ounce for the supplies. After all, the gold suppliers have to make a profit too.

Advertisement

But if you buy from your customers at about half price (or $500 an ounce) you’ll be “buying low” as I believe it will be a long time before you’ll see $500 gold again. So don’t cash out all of the gold for cash.

There are two choices for getting you a lower “buy-in” for findings and saving you lots of cash flow.

Send some of the off-the-street gold to a refiner, get a credit and leave the credit with them and order your findings as you need. Stuller, Roseco and Hoover & Strong are just three names that come to mind. You’ll get the parts you need without spending precious cash. Bill against your in-house credit.

In addition or in conjunction with the credit, buy some stock with your credit and keep it handy. Buy sizing stock, round wire and solder. In addition, stock up on findings you use a lot to keep from placing lots of phone orders. Shipping every day of the week gets expensive in the way of Fedex/UPS charges.

When I had our store, we kept on hand $25,000 of findings and sizing stock at all times. Some example of the findings we kept on hand were:

[dropcap cap=1.]14K yellow and white gold jump rings. A dozen of each size available.[/dropcap]
[dropcap cap=2.]Same thing for lobster claws. When the lobster got to be a large size, we stocked six of each.[/dropcap]
[dropcap cap=3.]A dozen of each size low base heads, and once it hit 1.25 carats in size, six of each size.[/dropcap]
[dropcap cap=4.]Three of each size 14K four-prong Tiffany-style heads, along with six prongs. etc.[/dropcap]

Advertisement

Buying off the street lets you buy $900+ cost findings for $500 an ounce. By using your scrap as credit you save cashflow and you’ll have more everyday items in stock and hopefully reduce your shipping costs, along with your ability to do repairs faster than normal.

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 November 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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