Margins on diamonds have shrunk. So what else is new?
Margins on custom design work have always generated better returns. Another great thing about selling a custom bridal engagement ring is that unlike selling one from the case, you don’t need hundreds of thousands of dollars worth of inventory to make a $2,000 sale. Pictures, CAD programs, even a pad and pencil will do.
I did a survey a few years ago, and most jewelers said that two-thirds of their custom sales were between $750 to $3,000 with a 70 to 80 percent closing ratio. So, how to enhance and increase this business and do it for free?
Use your own phone, camera or video camera to send texts or emails to your clients as their ring is being built.
At the start of the custom order process, be sure to get a cell phone number and email address. After the client leaves the store and while you are carving the wax or building the CAD file, have someone take a picture or short video of what you’re doing. In addition to allowing you to send email, most phones today feature a microphone icon that enables you to dictate a message.
“Hi Michelle, I’m working on the wax model now as you can see. Will contact you when it’s ready to view.”
Send this to the client; she will be ecstatic.
Then when the wax is ready to view, send a photo of the model. “OK, here it is, comment on it to give your OK. Feel free to share.”
People love to forward emails, texts, chats and Pinterest photos. Believe me, this will go viral! One client will share with others. Don’t be the one to post it on Facebook. Let them do that.
Time to cast the ring into metal? Take a video of the torch, melted gold and casting machine in action. Send this to the client (in fact, you can send anyone this video). Do the same with the file-up and setting stages. Once finished, show the ring up close in a video or photo and send it again.
This will make it special for the client. If it’s for a surprise proposal, they can share the videos and pictures after she has received the ring.
And don’t stop there; do this smartphone marketing for all your custom jobs. Keep customers in the loop.
If the couple picks up the ring, get pictures and forward the images to them with their smiling faces. They will share.
At the bottom of the emails, add a button to share via Facebook/Twitter/Pinterest, etc. Also, add a certain dollar amount coupon for any of their friends to come in and have something custom made. Let the couple know that anyone coming in with a copy of their email or coupon will get a discount, while they’ll get some sort of future credit for sharing.
Keep that phone charged up!
The Staff: Weekly training for all staff to improve their skills and knowledge. Sales staff would have sales goals and at least 50 percent of their total income would come from commission and bonuses
The Shop: Everything would be state-of-the-art and visible to customers through glass
One laser welder for every four jewelers on staff. Each bench would be well lit along with bench scopes for closer work along with a GraverMeister to assist in setting.
Sales: Majority of income would come from the custom design side along with sales of loose diamonds for the pieces we make. (We’d have a good-sized wallet of loose diamonds and color.)
Many cases would have “brass and glass” models, making it easier to sell our own designs or special orders from outside vendors.
First 15 months, we’d want sales to be $1 million. Then growth at 25-35 percent per year for the next three years.
Store Hours: Open seven days a week. 11 a.m. to 7 p.m., Monday to Friday. Saturday until 6 p.m., Sunday 12-5 p.m. Open one long day for the convenience of clients: 8 a.m. to 8 p.m.
Margins & Inventory levels: Profit margin on repairs: 65 percent; on custom jobs: 60-68 percent
Shop inventory: Between $25,000 to $50,000 in inventory. Mostly casting grain, sizing stock, findings and small stones.
Now I’ll go see a “shrink” and think this over again.
David Geller is a consultant to jewelers on store management. Email him at dgellerbellsouth.net.
This article originally appeared in the September 2016 edition of INSTORE.