WE ASKED HUNDREDS of jewelers who responded to INSTORE’s 2022 Big Survey, “What change did you make in the last five years that had the most impact on your profitability?” Jewelers say they are adding lab-grown diamonds to their inventory, concentrating more on custom design and/or bridal, charging more for repairs, dumping aged inventory, hiring staff, and embracing online sales. They’re also buying equipment, especially laser welders, upgraded microscopes and 3D printers.
Here are 7 general categories of changes they say are working:
1. Inventory control.
- Stopped buying filler stock for the cases. It takes manpower to set up, break down, clean and polish, and inventory. It doesn’t matter what we have, “Do you have it in another color?” became too frustrating. So, we ditched it, focus on finding what the customer wants, and get that. Everyone is happier.
- I know silver is considered a high-margin category, but aside from a couple designer collections, we stopped selling it. Our average ticket jumped substantially and that in turn helped with profitability.
- We have worked at keeping fast sellers in stock and making sure we have current inventory – dealing with our aged inventory and getting it out. We also have a jeweler on site making his own line leaving room to be unique, developing a following, and added margin.
- Other ideas: Buying only fast sellers, managing inventory to get a 3X turn, getting rid of watches and clocks and restocking multiple times per year.
2. Adding energy to custom design and bridal.
- Invested over $30,000 in state-of-the-art equipment and our custom design bridal has boomed now that we can do it in half the time that the mall stores can. Most mall stores are taking two weeks for repairs. We have hired another jeweler and have tripled our custom and repair business. Also, we are buying gold and bigger diamonds from walk-in customers, which has increased our margin by 15 percent.
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3. Adjusting prices.
- I stopped apologizing for the cost of repairs. Cars, homes, clothing … everything needs to be kept up. I don’t understand why people get so upset about having to pay for jewelry repairs, especially when most of the pieces have been worn daily for years!
- Strategically monitored our margin. Our competitors were selling at a higher price. We became more in line with the industry standard of pricing and saw that customers genuinely wanted to shop with us, purchase from us, and establishing that relationship over that of an online competitor.
- I started charging for small jobs I used to do for free: cleaning, replacing small stones, sizing. It all adds up.
- Increase our markup. No one notices.
- Raised repair prices using Geller book. Charges more for custom designs and alternations to existing designs. Raised prices based on $2,000-plus gold.
4. Working by appointment.
- My overhead is so much lower, and my quality of sales transactions has increased.
5. Staff focus.
- Adding more bench jewelers.
- Hiring a salesperson who really enjoys the work.
- We have kept our focus on keeping our employees happy, healthy, and motivated to sell our product with consistent customer service.
- Trying to strategize employee placement and responsibilities.
- Quarterly employee bonus based on profit.
- New gross profit commission program with higher base pay levels.
6. New location.
- We moved out of the mall and built a free-standing store.
- We restored an historic building across the street from our workshop and former showroom. The much nicer showroom did a lot for our sales and credibility.
7. Using new tools.
- Texting services like Podium or Clientbook
- 3D CAD
- Water testing machine for watches.
- We use a platform now to text customers. It saves time and payroll hours, and customers find it more convenient. We can easily follow up on past purchases and even send links to suggest items they may enjoy, and they can pay right through the app. Best addition we ever made.
- In the past year, we purchased a laser welder.
- Invested in new equipment to identify lab-created diamonds and gemstones.
- CounterSketch, Matrix Gold, Orion Arc welder.
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