YOU’VE PROBABLY READ reports of how retail sales are down. So how do you survive, even thrive in 2008? If you have a shop or send out your work, you’re in luck.
An average custom design sale is double to quadruple a product sale with virtually no inventory in stock. It makes for a huge return on investment.
In 2008 there is a big opportunity to make a lot of money from redesigning customers’ jewelry. I estimate there are about 1 billion pieces of jewelry in America sitting in drawers and safety deposit boxes just waiting for someone to turn them into something new, stylish and beautiful.
Here’s how we did it. We built up a collection of almost 2,000 waxes, which were nicely laid out in our showcases in plastic boxes with foam in the bottom, six wax rings to a box.
[inset side=right]I estimate there are about 1 billion pieces of jewelry in America sitting in drawers and safety deposit boxes just waiting for someone to turn them into something new, stylish and beautiful.[/inset]We took pictures of almost every custom job we did and put them in albums on the counter. Today, you can buy electronic picture frames that will present your digital jewelry pictures as a slide show. These are available on the Internet for as little as $50. (Go to Click here and search for “digital picture frame.”)
In our case, we had a professional photographer take five pictures of us doing the following:
- Hand carving a wax
- Sprueing it up, inserting the wax on a tree in a steel flask and pouring investment around it right before it goes into the oven.
- A torch melting the gold in the crucible right before we swing the gold.
- A jeweler’s hand sawing off the sprue before file up.
- A finished ring, already polished, held in the jeweler’s hand in front of a spinning buff.
The poster-size photos hung on one wall in the showroom and supported a story we could tell.
It would generally go like this:
A customer looks in the case and asks, “What are all of these silly dime-store rings?”
US: “Oh, these are the molds we use to make jewelry. Say, do you have any old gold and jewelry lying around at home?”
CUSTOMER: “I sure do. My mother gave me her old rings, I don’t like them and I have some add-a-beads from the ’80s and other odds and ends. Why?”
US: “Did you know that we can melt down your gold and make any ring in this case for only $195?”
CUSTOMER: “You’re kidding! Any ring for $195?”
US: “Yes. These are the molds we use to make the jewelry. Look over here on the wall. The first picture is the mold someone chose. It’s submerged in something like plaster of Paris. After it hardens we put it in an oven where the wax model melts away leaving a void like your ring. We then take your gold, melt it and put it into the mold. There we cut off the support rod, file it up and polish it, and voila, you have a brand new ring for only $195. If you have any stones to go into the ring, that’s extra. See the finished ring in the picture? If you just bought the ring as is, your cost would be over $500 at today’s gold price. But with your gold, it’s only $195.”
CUSTOMER: “Oh my, this is so cool. What else can you make?”
US: “Here, let me flip open our design archives. See this ring? I made that for a customer who had her own center stone and gold but wanted a ring like one she’d seen on Desperate Housewives. So we custom-made the ring from scratch, using her gold and center stone. She bought the smaller diamonds for the sides.”
CUSTOMER: “What did that cost?”
US: “If we custom-make a ring rather than using a mold it starts at $530. If I remember correctly, she spent around $1,300 to $1,600. The insurance company appraised it at $7,000. When can you bring in your treasures so we can start?”
CUSTOMER: “Are you kidding, I can be back here tomorrow!”
US: “Great. Remember to bring in all of your old jewelry, even things you think won’t work. That’ll help bring down your out-of-pocket costs.”
CUSTOMER: “Oh my word, I’m so excited! See you tomorrow!”
In our price book, to cast with the customer’s gold for a stock wax is $195. Your cost to make that ring (without stone setting) is probably about $35. Now that’s a profitable sale. Our average custom sale using the customer’s material was $750.
If the customer doesn’t have old gold, charge the $195 to cast and finish it plus the price of the gold. At that point, our average custom sale jumped to $1,500 to $2,500. I did a survey of jewelers recently, and the most common custom pricing was $750 to $1,000 and the second-most was $2,000 to $3,000.
Some jewelers won’t cast with customers’ gold. Fine, still charge the $195 and buy their old gold against a credit to sell them fresh gold.
We bought most of our waxes from Lex-Wax (Click here). If you buy 100 or more they are only $1.65 each. If the wax wasn’t to the customer’s liking, we hand-carved one, and that starts at $530. After about 5 years of displaying the waxes we slowly removed them because when I placed my sales staff on 100 percent commission they stopped selling a $195 product and upgraded most customers to the $500 service. In today’s market I’d still stock the waxes.
Two places to get the boxes are: Click here and Click here. All you need is a plastic box that’s about 3-inches tall and as wide and long as you want. Buy some foam to go in the bottom and put slits in the foam for the shanks. We’d display about six rings per box, and lay out loose pendants, bracelets, etc.
Just make sure when you show customers the waxes you don’t let them try them on by themselves – they’ll break them. Instead, carefully cut the bottom of the shank open and push it slowly onto the customer’s fingers, and tell them you’ll take it off.
Advertise this service to your own customer list and to the public. We’d often show a picture of old gold in a heap as “BEFORE” and the newly designed ring as “AFTER.”
Perfect your style, sales ability and story telling with your customer and you can double or triple your custom sales, get a 50 to 65 percent profit margin easily without having to stock much in the way of inventory. Your customers will show and tell the world how wonderful your store is.
And you’ll prosper in 2008.
This story is from the April 2008 edition of INSTORE.