RECENTLY, A NEW jewelry store owner said they had bought a relative’s store a year ago that had been in business for over 25 years. They asked the members of a jewelry group on Facebook what others charge so they could update their repair prices. They were looking to see what others charged because they didn’t want to give customers a heart attack (their words).
One jeweler’s answer was a bit odd: “Either every 90 days or 6 months, slowly adjust by 25% (ish) until a year or 3 from now you are up to speed.”
MY ANSWER:
If you use that strategy, you’ll never get caught up. You’ll be behind again, especially as labor always goes up, but who knows what gold, silver and platinum might do. What would happen when you finally get your gold price for findings up to $1,800 and gold has jumped to $2,200? Futile.
Consider this scenario: You take over the relative’s store and they have two rope chains from five years ago in stock, when gold was $1,260 (today’s gold price is $1,769). You sell them to two sisters on Monday this week, boom, you are out of rope chains. You call Quality Gold to replace them.
They Cost You Today 40% More Than When the Previous Owner Put Those Two Chains in the Case
So those chains cost the store $200 in 2017, and now the newly ordered replacement chains cost YOU $280.
The two older chains cost $200 and had a retail price of $400 and sold for $400. The new chains cost you $280, which gives you these two choices:
a. keystone the new chains to $560
b. slowly adjust them “just a little bit higher until a year or three starting at $400, then $440, then next year $460, then ….????”
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I’m betting you’d say the heck with this and keystone them to $560 right off the bat. Remember, that’s 40% higher than the last chains.
You are worried about giving customers a “heart attack”. Look at the world now: Gas is higher, eggs, meat, lumber housing. Why don’t these industries slowly raise their prices over a year or three years to adjust their prices?
Because They Understand Cost of Goods and Overhead
So, would you treat the replacement of gold chain or the replacement of a strand of pearls or a replacement of a white gold diamond bridal engagement ring by slowly raising the price over a year? I doubt it; you’d apply a markup today.
I’m here to tell you that there is no difference in asking more for your inventory and asking more for repairs to help you make a profit or pay overhead or pay payroll. All of these departments are required to help you make your monthly numbers.
Don’t get caught up in this idea that repairs will drive customers away if you raise prices. They won’t.
- Gas prices are up, people still buy gas
- Housing prices are up, people still buy houses
- Gold and diamonds are up, and people are still buying jewelry
Why is saying raise your repair prices slowly nonsense? Because your other expenses don’t raise their prices to you slowly. Retailers are screaming about their insurance premiums going up, rent at end of their leases go up, employees want raises and jewelers across the country are being paid more (which is a cost of sizing a ring).
So here are numbers you should look at in your store:
In a typical store, if 10 people come in and look in the showcase, 3 or 4 out of 10 buy a piece of jewelry.
In a typical store, if 10 people with a repair come in, 9 out of 10 will say, “OK, fix it.”
In a typical store, if 10 people come in for a custom job, 7 or 8 out of 10 will say, “Make it.”
If your old store charged $35 to size a ring smaller, but your jeweler died and you send it out to a trade shop and they charge you $25, keystone is $50, will you charge $50 or “go a little at a time”?
Every sale in a store, whether it’s jewelry, batteries or repairs, all have their duty to pay for their percentage share of expenses, overhead, payroll and reduce debt in a store.
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Repairs are not price sensitive; they are trust sensitive.
Why would you think going up $5, $10 or $15 to size a ring smaller will cause anyone to have a heart attack? The cost of a young couple getting an engagement ring should cause a heart attack. The cost of just the loose diamond has gone up 20% or more just this year. But they still buy diamonds, don’t they?
Stores doing repair and custom design are jam-packed with jobs in their boxes. Customers are paying whatever you ask, whether it’s $50 or $90.
Want to know prices? How about 7000 prices? Go to my website where I have videos for training the staff and you’ll see over 7000 prices. The password is geller.
Every page, every chapter of my book is there. My voice teaching you and your staff how to charge, why we charge, what to say to customers when they ask why you charge what you charge. The last video is how to sell repairs and custom in the store.