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What To Do When a Large Chain Competitor Opens Nearby, and More of Your Questions Answered

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We’ve had a large corporate jeweler open up in our area that does a huge amount of advertising, offers five years to pay and lifetime guarantees on diamonds. How do we respond?

Don’t panic. The future might require you to make some difficult adjustments, but there should still be enough air to breathe for a smart small independent. First, grab a pen and paper. Visit the store and make two lists: where your products and services overlap, and where you do things differently. From that, a picture should begin to emerge of areas you can emphasize and areas you can improve to keep your customers loyal. Merchandising expert Tom Crossman also recommends you review the look of your store. All chain stores look alike, he says, and even though you may sell some of the same brands, your products will be more appealing with better, different fixtures that reflect your independent spirit. “Light wood fixtures, for example, create a warmer environment while still being neutral. And stay away from vendor displays so you can reinforce your own brand,” he says. Finally, try not to view the big store as an unalloyed enemy. Instead, try to get to know the staff and managers. More than a few stores have told us they get a steady flow of referrals from the local Walmart for repair work. There’s a good chance they might be able to send work your way, too.

How can we add some Halloween spirit without dressing up?

Yes, traipsing around the store in red underpants and a cape can get inconvenient fast. Accents in the form of nail art, hair clips and maybe some extra makeup (liquid liner is a great way to add a cobweb effect) can send the right message at the right volume for a jeweler. Also, this is the right time to get staff to model your onyx and red agate bracelets and gothic charms.

I’ve created a funky new ring design I’m hoping will sell well this holiday season. Should I seek copyright protection? 

Although a copyright is automatically secured when “an original work of artistic expression is created and fixed in a tangible medium,” it’s better to go ahead and register, advises Sarah Yood, senior counsel for the Jewelers Vigilance Committee, as filing for registration with the copyright office will help you prove you had the design at a certain date. Done electronically, it’s a straightforward process and fairly inexpensive, with registration costing just $35. To help you better understand copyright law and the implications of filing, the JVC has published a guide titled, “JVC’s Guide to Intellectual Property Law.” See jvclegal.org for more information.

I’ve been summoned to meet an IRS auditor. Any last-minute tips?

Accept that the fresh-faced inquisitor across the desk is the boss and show him the due respect. Don’t argue if you disagree with something. If the auditor wants to disallow a deduction, state once why you don’t agree. If he’s not swayed, hold your tongue. Antagonizing an auditor will only encourage him or her to search for other areas of potential tax liability. Remember that you can plead your case with several layers of people above your auditor, and ultimately all the way to tax court if you feel you’ve been wronged. Surprisingly, most IRS auditors aren’t tax experts. Most are fairly recent graduates whose major was in an unrelated field, so don’t feel intimidated, and don’t underestimate your own tax knowledge.

Over the years, INSTORE has won 80 international journalism awards for its publication and website. Contact INSTORE's editors at editor@instoremag.com.

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How To Decide Between Equal Job Candidates, Splitting Staff Chores and More of Your Questions Answered

Plus how to market your engraving capabilities.

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I have two good candidates for the position of sales associate, but I can’t decide between them. Can you suggest a tie-breaker?

Toss a coin and let fate be your arbiter. If they’re both equally appealing candidates and you can’t reduce the uncertainty by doing further research or interviews or trial runs, then your decision doesn’t much matter. That likely sounds like rash advice, but this paralysis you’re experiencing has a name: Fredkin’s Paradox. The computer scientist Edward Fredkin summed it up as, “The more equally attractive two alternatives seem, the harder it can be to choose between them — no matter that, to the same degree, the choice can only matter less.” To be sure, it will probably turn out to have mattered in hindsight, but by then it’ll be too late. Given that you’re unable to know how things will turn out, overthinking this one — or any similar tough choice — is futile.

How do you share the chores among sales staff fairly and in a way that is easy to enforce?

Store consultant David Geller suggests breaking your staff into groups and rotating the responsibilities. “Put some easy chores with some bad ones like vacuuming and cleaning the bathroom,” he recommends. The people whose names are under the different groups of chores (see table) do them for only one week, and then they move onto the next group of tasks. This shares around the bad and light chores and also makes it easy for the store owner to raise the issue when a job needs doing. “After doing this, I no longer complained to a person; I complained to a group,” Geller says. “If I go out and see the glass in a showcase is dirty, I don’t expect everyone to clean it, just Group 2.’”

I recently purchased an engraving machine. Any ideas on how I can market it?

One of the biggest mistakes jewelers make is keeping their engraving machine in the back room, says Annette Peloquin, marketing manager of Signature Engraving. Putting the engraving machine in the front of your store, even if it’s just for special events like Mother’s Day and Christmas sales, has a “curiosity” factor that will attract new clients into your store. Also, regular direct-mail pieces with coupons or discounts on engraving services are another way to promote your services. “Be sure to aggressively promote the wide range of engraving possibilities,” such as logos and photos engraved on charms, she says. Hand out flyers to bridal shops and bridal planners that may wish to engrave picture frames or champagne glass or guest book foiling. Also, says Peloquin, engraving corporate gift items for small-to-medium-sized businesses can be another lucrative sideline.

I found a honey of a deal at an estate sale, but I’m worried about paying so little for a piece worth far more. Are there any state or federal laws regarding the purchase of jewelry that is marked at a grossly understated value?

While laws vary widely between different states and municipalities, Elly Rosen of the AINetWork’s Gems & Jewelry Trade Reference says, “We may seek guidance from the general principles involved.” For Rosen, the simplest answer is that “we can buy as low as we wish and make as much profit as we can … so long as we do nothing to deceive or take advantage of the seller.” Estate sale buying is the easiest to answer as it’s a free and open public sale with the seller in control. In such a situation, Rosen says, “We can offer as low as we wish and it’s their option to accept. If it’s an auction and our low bid gets the hammer — it’s ours to resell at whatever profit we can fairly obtain. If we’re on the street and someone offers to sell an item far below its value, we can accept their offer. We don’t know each other, so there’s nothing leading them to believe we have special knowledge they might otherwise rely on.” However, when buying over the counter in your store, things change. “[Customers] may believe they can rely on our knowledge, so greater care is needed not to say or do anything implying low value. They ask for $50 for a $1,000 item, we can accept their offer.”

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Your Holiday Questions Answered, Including Security, Aged Inventory and Sales Presentation

Plus a tip for making shoppers feel comfortable in your ‘decompression zone.’

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What should I do to reinforce security measures at this time of year?

Here’s some advice from Jewelers UnBLOCKed:

  • Create obstacles. Use display cases and holiday décor to block thieves from running straight in and/or out of your store. All areas that contain valuable merchandise should be visible to both customers and staff. Avoid any blind spots.
  • Stay under the radar. If you’re planning a vacation, don’t advertise your absence; refrain from posting vacation pictures until after you return. Posting while traveling makes your store, employees and even your home susceptible to invasions, crimes and thefts.
  • Double and triple check seasonal employees. Even if they’re temporary, you need to ensure that all employees are trustworthy. Don’t forget to perform background and reference checks.
  • Limit the number of pieces that can be presented to a customer to between one and three pieces of jewelry or watches at a time, and post signage of this policy. If a customer complains, sales associates can point to the sign and mention its store policy. Deter potential thieves from trying to take off with a stockpile of jewels.
  • Keep store windows clear. A cluttered window blocks criminal activity from being seen outside.

We’re expecting to see a lot of old faces over the next few weeks. What should we do about aging inventory our customers may have seen before?

Stop fretting. Start polishing. “The majority of your customers don’t remember your stock,” says Dick Abbott, owner of the Edge POS software. “They may recognize a specific piece they have looked at previously, but the majority of it will look new to them, as long as it looks new.” Make sure each item is clean and sparkling and has a fresh ticket on it to adjust the retail to reflect today’s prices. Add a different chain to a pendant. Rearranging your cases makes everything “new” in the eyes of your customers. Identify the items you wish to clear and give your sales team a sense of ownership by brainstorming ways to clear old stock and then review your results and strategies every day.

What last-minute things can I do to sharpen my sales presentations?

Sales and display consultant Larry Johnson recommends enriching your vocabulary. There are adjectives that carry more emotion than the usual ones salespeople tend to use, he says, suggesting words like stunning, glowing, bold, brilliant, glistening, radiant, elegant, natural, fabulous, attention-grabbing, sparkle, romance, edgy, and timeless. “Upgrade your sales presentation to include these descriptive words that add impact. Start out today using one or two until you are more comfortable with adding more.”

How can I get shoppers thinking about buying as soon as they cross the threshold?

Pay attention to your store’s decompression zone, according to VEND, the global cloud-based POS and retail management provider. The decompression zone is the first few feet of your shop. Shoppers who are in this part of your store are prone to distractions, which is why most experts agree that retailers should keep the decompression zone simple and uncluttered. In addition, having greeters in your store makes people more aware of their surroundings and helps them focus.

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How to Be Safe at Company Parties, the Best Interview Question for a Prospective Hire, and More of Your Questions Answered

Plus how to avoid becoming a mediocre business.

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How do I lift my store out of the rut of mediocrity?

According to work by the Brigham Young business school on high-performing teams, peers manage the bulk of the heavy lifting when it comes to maintaining standards. But how to get to that almost mythical land of self-enforced high standards?

Joseph Grenny, a social scientist and author of Crucial Accountability, says there are four leadership practices that can help:

1. Start by showing the consequences of mediocrity to connect people with the experiences, feelings and impact of bad performance. Keep the issue alive by telling stories that illustrate work well done and the real human cost of shoddy work, such as lost diamonds, ruined weddings and upset customers.

2. Set clear goals and explain why they are important. “Use concrete measures to make poor performance painfully apparent,” says Grenny.

3. Establish peer accountability so that people feel comfortable challenging one another when they see mediocrity. Regular weekly reviews can provide opportunities for mutual feedback and establish peer-accountability as a norm, Grenny says. It’s key that your store becomes an environment where everyone feels entitled to challenge anyone if it is in the best interest of the business.

4. Be quick to defend the high standards. A chronic poor performer is a clear impediment to the goals you’ve set. How you handle this situation will let your team know whether your highest value is keeping the peace or pursuing performance.

“When you ask a group to step up to high performance, you are inviting them to a place of stress — one where they must stretch, where failure is possible, where interpersonal conflicts must be addressed,” says Grenny. “If you shrink from or delay in addressing this issue, you don’t just lose that person’s contribution — you send a message to everyone else about your values.”

I’m planning my company party, but one concern is that somebody might get drunk and have a car accident. Got any advice on protecting myself?

Concerns about liability for alcohol-related incidents, sexual harassment, and workers’ compensation claims have led many companies to forgo holiday galas entirely. You don’t have to. But if you’re really afraid, lawyer Anil Khosla, writing in Inc. Magazine, suggests the following steps to reduce your liability: “1. To distance the business from the party, make it an entirely social event, don’t invite clients or vendors, and make sure employees know that attendance is voluntary. 2. Plan accordingly. Hold your gathering off-site, if possible. That may shift some of the potential liability to the hotel, restaurant, or caterer. If you must have an on-site party, hire an independent caterer. Don’t permit anyone from the company to serve alcohol, and instruct bartenders to stop serving anyone who seems inebriated. Lawyers advise avoiding an open bar— or, at the very least, limiting it to the first hour. Also, close the bar at least one hour before the party ends. 3. Consider providing transportation to and from the event. Make sure that cabs will be available, and appoint someone to suggest cab rides home for people who have had a few too many.”

How do I tease out a prospective hire’s innate strengths during the interview process?

The indirect method is often best when it comes to getting at a prospect’s true strengths. Marcus Buckingham, a leader of the strengths-based school of business management, suggests asking this question: What was the best day at work you’ve had in the past three months? “Find out what the person was doing and why he or she enjoyed it so much,” he says, adding it’s key to keep in mind that a strength is not merely something someone is good at. “It might be something they aren’t good at yet. It might be just a predilection, something they find so intrinsically satisfying that they look forward to doing it again and again and getting better at it over time.” The theory is that the best businesses are those that fully leverage the strengths of their employees as opposed to trying to fix up their weaknesses.

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