I‘M ON MANY Facebook jewelers’ groups, such as Jewelers Helping Jewelers, Bench Jewelers Helping Bench Jewelers, and Bench Jewelers. All are great resources for our industry. But the same question keeps coming up over and over: “How do you pay a jeweler by piece work?”
There are two possibilities:
- The jeweler who will do the work will tell the store how much he/she will charge to do a procedure.
- The store has decided it is best financially for the store to not pay an hourly wage and go to straight piece work.
In No. 1 above, the jeweler typically knows what to charge wholesale, and the store uses that amount just like receiving a special order and marks it up keystone or better. Both sides win.
But No. 2 is trickier.
When I developed my price book, I put my jewelers on piece work because that was the only way I could find labor cost. I timed each jeweler, giving them a time clock to clock in and out on the envelope for six months. In the late 1980s, when I converted from hourly to piece work, their pay increased by 50% within six months.
But this was an added bonus because of increased productivity. Before, it took us six weeks to get a ring sized and eight weeks to make a ring. After going to piece work, getting a ring sized dropped to three weeks and six weeks to make one. Later on, with better management on my part, repairs were promised in 10 days.
To do piece work in your store, to be fair to the bench jeweler, you must have three things in play:
a. You must have more work for the jeweler than they can accomplish in a day. It’s not fair to pay by the job and then have no more work after 3 p.m.
b. They must be uninterrupted by the staff at least 80% of their day. A jeweler can’t keep answering questions from salespeople or waiting on customers if they want to make a living. This entails training for your staff.
c. The jeweler must get the same amount even if the job is discounted, free or the sales staff makes a mistake.
However you come up with your price, it must FIRST be a fair wage for the jeweler. Then just mark it up and quit worrying that the customer won’t pay. THEY WILL because repairs are not price-sensitive; they are trust-sensitive.
My piece work system is pretty simple. We paid 26% of the retail labor, not including the finding. If soldering a jump ring is $20, we paid them 26%, which equals $5.20. Why 26%? Because when adding in matching taxes and benefits, that $5.20 cost $6.50.
I wanted a three-time markup: 3 x $6.50 = $19.50, rounded up to $20.
Win/win!