Making Sense of the Gold Market, Long-Lasting LEDs and More Jeweler Questions Answered

GOLD PRICES

What’s the best way to deal with the current volatility in the price of gold?

On the basis that many of our readers have become savvy gold market traders in the last five years, we turned the question over to our 1,000-jeweler-strong Brain Squad. Here are three responses that helped sum up the advice.

Don’t reprice, says Mark Neumann of Ross Designs in Highland Park, IL. “If the price is up, give your customers a great deal. If it plummets, give them a great deal at whatever margin you can handle. And buy at the new low prices, the pieces you’ll sell again and again. It’s all about volume and turning.”

Watch the markets. “We never speculate with gold,” says Dennis Petimezas, owner of Watchmakers Diamonds & Jewelry, in Johnstown, PA. “Every two weeks we sell: No getting caught with your pants down if you do this. Remember you are jewelers, not gold speculators.”

Use prototypes, recommends Dennie Miller, of Miller’s Fine Jewelry, O’Fallon, MO. “Right now we are working with a number of brass and glass lines. We refer to it as a ‘live catalog line.’ Customers have no problem waiting five days to get a finished product, and they like the fact it is marketed at current gold and no one else has ever tried their ring on. As gold drops our inventory will change but in the meantime it’s working very well or us and it greatly reduces our exposure to loss.”

LIGHTING

I saw an LED being advertised online that claimed it would last for 20 years. Is that true?

It is possible for an LED to last for 20 years but not in the demanding environment of a jewelry store. The 20-year claims are based on testing done by LED diode manufacturers in a controlled environment, says Howard Gurock, president of Econo-Lite. “In the real world, if an LED is used in a jewelry store it is highly unlikely it will still be shining 20 years after purchase,” Gurock says, challenging any store owners to see if they can actually find any LEDs with 20-year warranties. “The search will come up empty,” he says.

DIAMONDS

A customer brought in a diamond with a small chip on the side. What’s the best way to deal with this?

The good news is that a diamond cutter can more or less restore the stone to its previous glory — which is what the customer wants to hear. The bad news is that it will involve a few points of weight loss, which the customer probably won’t mind, given that he or she was most likely thinking there was no way to save the stone. “Knowing how to react to this situation places the customer at relative ease for what could be a slightly traumatic event for them,” says diamond cutter Bill Bray, who provided the accompanying photos. “Nevertheless, it can be fixed and often times, this is exactly what the customer wants to hear,” he says, adding that it’s a good opportunity for the jeweler to earn some profit and to show the customer some of his expertise.

CUSTOM

Custom is booming for us but it is also “out of control.” How can we keep track of who has seen a design, milling the wax, quotes, deposits, ordering the diamonds to go in the design, etc?

Sales trainer David Geller says that at its peak his store was processing 450 custom and repair jobs at any one time and that before he moved to a computerized system, it was chaos. “The only way to track this much work was with a jewelry pointof- sale program,” he says, adding that he recommends Jewelry Shopkeeper or The Edge. “Both programs will keep and sell inventory, track customer history, print tags for jewelry and a multitude of other things. Both export in 20 seconds each morning the overall totals for the day and they deposit money into QuickBooks,” so you can keep an eye on your profitability. The use of bar codes on job envelopes and a scanner means you can keep on top of everything. Geller says he would runa a report every morning to determine what jobs needed to be given priority and which jewelers needed to be assigned the work.