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David Geller

What is a Strong Bench Jeweler Worth? David Geller Tells You

Make sure you pay your workhorses right.

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Should you “overpay” for a bench jeweler? You might ask, “Why would I ever want to overpay to hire anyone?” The answer: because you want to keep them, and keep them happy.

There are two types of people in the world: racehorses and workhorses. Racehorses are people who love to sell; they bring home the bacon. Workhorses, on the other hand, get things done. They include bench jewelers. There’s no “crossing the finish line,” unless you count emptying their to-do box.

So what’s the pay value for each of these jobs? 

Salespeople: These are racehorses. They want to win. An excellent salesperson has people skills and is courageous. They are unafraid to ask for the sale, even if they’ve already heard two “nos.” They also try to upsell and are not afraid to show higher-priced pieces. What value can you put on this person?

An easy start is paying them a percentage of what they sell. The sky’s the limit. They are the reason for store sales to be what they are. Don’t be afraid to pay for a star.

Jewelers: These are workhorses, yet they are workhorses with a special skill set — a skill set that is slowly dying out. The starting pay is so low that it’s hard to get young people to enter our field. 

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Today, an auto mechanic is reading a computer screen and replacing parts manufactured to fit. Hard worker? Yes. Special skill? Not in my mind. On the other hand, a jeweler might just replace a manufactured part, but now he must solder in a head and set an emerald in a way that it won’t come out, catch on clothing or crack the stone in the process. This is a skill that takes time and training.

So what’s a jeweler worth?

1. Percentage of shop sales (determined by the staff and traffic). A jeweler’s bench should produce $185,000 to $250,000 in sales a year. If you spend $1,000 month on findings, supplies and tools, then before salaries you’re left with $173,000 to $238,000 in gross profit. That’s almost a 70 percent gross profit — more than enough room to add $50,000 or more for a jeweler’s salary. Add another $10,000 for taxes and vacation, and your shop costs would be $72,000. With sales at $185,000, that’s a 60 percent profit margin.

2. If you own a store that doesn’t have enough work to keep a jeweler busy full-time, some of this “extra pay” is just what you have to pay to have someone available to set the diamonds you sold. Just another cost of business.

David Geller is a 14th-generation bench jeweler who produces The Geller Blue Book To Jewelry Repair Pricing. David is the “go-to guy” for setting up QuickBooks for a jewelry store. Reach him at david@jewelerprofit.com.

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David Geller

Close More Sales, Courtesy of David Geller’s Uncle Irv

These four “tricks” from an old sales pro will help you make more money in your store.

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MY UNCLE IRV WAS the No. 1 car salesperson for every single dealership he ever worked for. When he retired in 1987, he was the No. 1 Jaguar salesman in the United States. Here are some tips I learned from Uncle Irv that will help you make more sales today.

TRICK 1

My Uncle Irv had a Rolodex, and while the salesmen on the floor waited for a “hot one,” Uncle Irv was calling his previous customers to see if:

  • They had friends looking for a car.
  • Their lease was up and it was time to buy.
  • They were getting tired of the older model he sold them years ago.

He made appointments while the rest sat around and waited.

Tip from Uncle Irv: Call your customers twice a year to just say “hi.” Contact them or their spouse about milestone dates for gift ideas.

TRICK 2

Uncle Irv fought in the Philippines, and at age 26, he was considered an “old soldier.” He told me they were preparing to go to battle and a 19 year-old started to cry. The sergeant came to the private and asked, “What’s wrong?”

“I’m scared, Sarge. I don’t want to go.”

The sergeant replied, “You don’t have to go, son. You just can’t stay here!”

In the 80s, I almost went bankrupt. Uncle Irv told me this story and said, “David, you just can’t stay here where you are now.” So, I got up enough gumption, fired half of my 16 employees, started over, developed the price book, and a year later, started to make it back.

Tip from Uncle Irv: You can’t keep doing things the way you have been. Times are changing and you must change, too.

TRICK 3

When Uncle Irv was the sales manager of a big Chevy dealership here, he had to motivate and train the sales staff, but also give them confidence when times were tough. You’ve had the same feeling: it’s getting close to having to make payroll, funds are low and you’ll take any price to get money into the bank account. Uncle Irv didn’t want to have the salesmen look at a walk-in customer as their last meal ticket and give away the farm.

Out of his own pocket, he gave each salesman three $100 bills to carry around at all times. He wanted them to feel like they didn’t need the sale, so that they wouldn’t discount so much.

Tip from Uncle Irv: In one way or another, throw money and jewels at your sales staff. Make them feel and look richer, and they will sell better. I used to let my staff buy or custom-make any piece of jewelry at 10 percent above our cost and take it out of their paycheck over six payroll periods.

TRICK 4

Uncle Irv told me that many salespeople are afraid of silence. He said, “Tell the customer the price and then shut the hell up!”

Scenario: You tell the customer $1,495 for the ring, and then there’s silence. Twenty seconds go by and you’re thinking “OMG, they aren’t saying anything. They are going to bolt or go online. Maybe I should give them a discount; I need this sale.”

Meanwhile, the customer is thinking, “Hmm, let me see — rent is due Friday, car note next week, summer camp dues in three weeks. No — I’m OK, I can do this.”

The first person who breaks the silence will give up their money to the person on the other side of the showcase.

Uncle Irv also brought his lunch every day. He told me, “I can’t afford a $500 hamburger.” (You’ll get it.)

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David Geller

Here’s How To Calculate How Much Your Jewelry Salespeople Should Earn

But that also requires that you let them make sales.

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A JEWELER EMAILED ME this question: “I have always heard that a jewelry sales associate should sell 10 times what they make as a gross wage. Do you think it is still true today? What about associates with other responsibilities who aren’t always on the sales floor?”

Here’s your answer: 10 times sales as salary (or being paid 10 percent of what you sell) is “sort of correct.”

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The number is actually between 8 to 13 times their pay. If they sell 8 times (or cost you 8 percent of their sales), they are very efficient. If their cost is closer to 13 percent, they are inefficient.

So if a salesperson is paid $35,000 a year, they should sell between $270,000 to $437,000.

But here’s the question: How much do you personally sell out of total sales of the store? That includes product sales, appraisals, repair and custom.

If the store does $700,000 in sales and you only wait on diamond customers and your sales are $500,000, then that leaves a remaining $200,000 available for sales staff to sell. So the salesperson is physically unable to sell even the minimum of $270,000, much less the higher end.

Take your sales away from the total and see what’s left for staff to sell.

Don’t tell me what they could do to bring in more sales. That’s an excuse. Why? Because you have to be the sales trainer.

You’d have to train them to:

  • Increase their average dollar sale.
  • Try to add on to what is sold to each customer. Goal would be add on to 25 percent of their sales.
  • Keep a client book of some type, keeping track of birthdays and anniversaries and contacting customers to remind them to buy something for these events. This starts with sending thank-you cards after every single sale.

If you’re too busy to be a sales manager, then don’t complain that they don’t sell enough.

What about employees who have other duties? That makes it impossible to sell 10 times their pay if they are only on the floor 15 hours a week out of 40. They would be considered “fill in.” Just pay a salary or wage and be done with it.

But if you wanted to pay them some type of bonus or commission plan, you’d figure out what percent of the week they are on the floor. So in this example, if the employee is on the floor 15 hours out of 40, then 38 percent of his workweek is selling. If he makes $35,000 a year, 38 percent of it is equal to $13,000 of his pay to be on the floor selling. Divide $13,000 by 0.08 and 0.13, and his sales should be $100,000 to $162,000.

There are many ways to compensate for excellence in selling. When I was a store owner, I paid straight percent of sales. You can pay a percentage of the gross profit, which ensures that the more they discount, the lower the percent of profit you pay. There are spiffs: sell these things over here and I’ll give you a set amount of money. There is share: if we all reach a goal amount this month, I will give everyone an amount of money. Or you can give things: sell so much or a particular item, and I’ll give you tickets to a show/fancy dinner out/day off/spa day.

All salespeople come to work with their car radio set to WIIFM: “What’s In It For Me.”

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David Geller

Why David Geller Says You Should Sell Lab-Grown Diamonds

You’re a merchant, so sell the customer what they want.

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ONE OF THE JEWELER pages on Facebook has been discussing whether a store should stock and sell lab-grown diamonds. The dad says no, while the millennial son says, “I think we should try it.” The reader vote is split about 50/50.

Can we talk about making a living here for a moment? And selling consumers what they want?

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Customers want to know their options and make their own decisions. Be their personal shopper.

I started in 1974 as a trade shop. I used to do work for a store at our mall, Wellington Jewels. I sized the gold rings they sold and set stones.

What stones? Strontium titanate. It’s a diamond simulant that has colors like an opal. Hardness on Mohs’ scale? About 5.5! But sparkle, oooh weeee!

The store was mostly black walls and showcases, with bright lights to make the stones pop. They made great money, and these are diamond look-alikes with the hardness of an opal. The mountings were 14K gold with real melee diamonds. They didn’t sell much fashion, which I told them was crazy, because a woman can only buy so many engagement rings.

I became friendly with the store manager and she agreed. So I ordered a dozen at a time in fashion mountings from a catalog, furnished the mountings and diamond melee, and she gave me center stones, which I set. They’d sell most of each dozen I gave them within five weeks.

So let’s talk profits on this product. All merchandise was quadruple markup.

They gave a lifetime warranty on these stones. If the stone scratched or chipped or fell out, they’d replace them for 50 percent of the price (so they still made keystone).

This was junk compared to lab-created diamonds. Remember: a lab-created diamond will last as long as the human does.

What about resale value? Well, they can’t get their money out of what they spent on your natural diamond, so try lab-created, make a better margin and keep that young person from buying it someplace else.

When you quote a price to a customer for anything, you may be thinking, “They aren’t talking. Maybe I should come down on the price. OMG I need to make payroll this Friday.”

They may be thinking: “Darn, my student loan note is due at the end of the month. Maybe I should opt for a lab-created diamond. I can’t tell the difference and we need to save for a house.”

Be their personal shopper, make a customer happy and make some money!

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