I SPEAK to so many jewelers who tell me, “I don’t think my customers will pay higher repair prices.”
In today’s world there’s virtually nothing that doesn’t cost more now than a year ago. Who would have thought anyone a year ago would be willing to pay $4 a gallon for gas?
And jewelry? An engagement ring semi-mount a year ago was $400 and sold for $799. Now that ring costs $500 and at keystone sells for $999. That’s $200 more! You’re now facing a slower turn on an item that requires a bigger investment.
Remember, product is price sensitive. But repairs are trust sensitive. If you’re charging $22 to downsize a ring and don’t think the customer will pay $28, my view is that you’re a poor psychic. You don’t know what the customer will pay.
Look, you’re charging $200 more for the same semi-mount you sold a year ago but don’t think someone will spend a measly $6 more to have her cherished —and now more valuable ring — given to her by her mother, sized smaller.
Why shouldn’t customers pay more? Your raw materials for sizing and repair have gone from $500 an ounce to nearly $1,000 an ounce in two short years. Jewelers get raises, costs go up. Customers understand this but most don’t know what it costs to size a ring smaller.
Don’t believe me? Try higher prices for one week and see.
To sell that $999 semi-mount requires you to invest half a million dollars or more in inventory. To sell the $28 sizing job requires that the shop keep about $5,000 in stock inventory on hand, plus add in one week of the jeweler’s wages.
The return on investment in the shop is higher than the showroom and closes over twice as many customers as product sales.
Besides, almost 70 percent of most store traffic comes from service, whether you charge for it or not. So you may as well charge correctly for it because 90 percent of customers will say yes to whatever price you ask. Ask for $10 and you’ll get it, 9 out of 10 times ($90).
Ask $28 and 9 out of 10 times you’ll get it ($252). Even if it dropped to 8 out 10, you’d still get $224 versus the $90. It’s a numbers game.
Now, go charge higher prices for repairs for one week only and see how many people still say yes and how much more money you take in at the end of the week.
Then report back.