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What’s The Risk of Adding ‘Gift-Priced’ Items and More of Your Questions for May

Lowering threshold resistance without hurting your image is tricky. Here are some ideas.

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I’m thinking of introducing more lower price-point items to get more people in the door. But as a fine jeweler, I worry about how we will be perceived.

Threshold resistance is a real problem for many jewelers, but it’s a tough balancing act. It also requires close attention to return on effort, inventory turn and a host of other factors. John Carom, owner of Abby’s Gold & Gems in Uniontown, PA, says he faced a similar dilemma several years ago and was criticized by some of his peers for going “down market.” Ultimately, though, he’s sure it was the right move. “Carrying jewelry gifts under $200 and even under $50 retail brought us literally thousands of new customers each year for several years,” he says. Carom acknowledges most of these people were never converted to larger purchasers. “But,” he points out, “most of our best and most frequent customers were introduced to us by these market-friendly gifts, with some spending tens of thousands of dollars each every year because they came through the door for a hot low-end item.” Even if you decide not to go with an enhanced selection of gift goods, you need to make sure through your marketing, displays and price tagging that everyone in your market believes they can come into your store and find something for their budget. High end or lower end, you’re at no end if no one comes in the door. As Carom notes: “Traffic building is profit building.”

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Video: 3 Millennial Couples Reveal Their True Thoughts On Lab-Grown Diamonds

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I know I should be focused on my business, but I get an almost warped glee out of competing fiercely with the unethical schmuck up the road. There’s nothing wrong with having such an enemy, is there?

Indeed, there’s plenty of psychological research that testifies to the fact that humans partly enjoy having enemies; they clarify the world for us and bolster our sense of righteousness. So sure, why not channel this sometimes less-than-admirable truth to good ends? And it’s certainly easier to keep an eye on what your rivals are up to in the Internet era. The only thing we’d say is that you don’t lose sight of who your REAL enemy is. Is it the guy so bad at business he’s cutting legal corners, or is it Amazon, or something else — like your own complacency, inertia, or fear of change that poses an existential threat to your business? Enjoy your day-to-day skirmishes with the schmuck around the corner, use it to motivate yourself, but channel your energies into evolving and growing your business.
I am interested in selling gem carvings at my jewelry store. Any advice on what to buy and how to sell them?
e Start small, says AGTA Cutting Edge award-winner Sherris Cottier Shank. Set aside a display case — two feet wide is plenty. Include a half-dozen or so carvings on miniature pedestals and give them lots of visual space. If the case doesn’t look full enough to you, maybe include some information on the carver. Shank guarantees such a display will serve as a conversation starter in your store, and adds that it’s a great way to increase your customers’ appreciation of the beauty and rarity of colored gemstones.

What are an appraiser’s best options to assess the value of a rare, one-of-a-kind or unusual piece of jewelry that can’t be researched?

If information on your piece cannot be found in any of the industry price guides and catalogs or at online forums, Stuart Robertson, research director at Gemworld International, suggests you canvas museum curators, auction houses and estate dealers. “Remember, if an item has value, it likely has a market. Consulting auctioneers and dealers can provide clues to finding and evaluating that market. The sale of comparable items is usually a good indicator of value,” says Robertson.

How can I get my salespeople to sell the older merchandise in the store?

Start by appealing to their belief in the possible, something all good salespeople should possess. Remind them too, in the nicest way, that there’s no accounting for taste. “Remember that somebody at the manufacturer was inspired enough by the idea of the product to create it. And remember that somebody else in your company liked it enough to buy it,” says sales trainer Harry Friedman. That makes at least two professionals out there — whose opinions they should respect — who believe in this particular product, he says. It also means that even though this piece may make them shake their heads in wonderment, there’s a reasonable chance there’s a customer out there who will like it too, so show it proudly. If that doesn’t do the trick, opt for an aggressive commission, says David Geller. “The commission many stores pay usually isn’t enough to get people excited,” he says, recommending you try doubling or tripling it. “If you normally pay a salary plus 3 percent, pay 9 percent on old items. It won’t cost that much, relatively speaking. A $500 item with 3 percent commission costs you $15 … at 9 percent, $45. Thirty bucks to unload a $500 item? Cheaper than a deeper discount, Charlie!”

Over the years, INSTORE has won 76 international journalism awards for its publication and website. Contact INSTORE's editors at editor@instoremag.com.

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In this episode of Jimmy DeGroot’s "Gene the Jeweler", Gene talks about how to fire people when necessary. He admits that confrontation is not his strong suit. His suggestion: Maybe being passive-aggressive for years on end will work?

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How to Get Chatty Cathy to Close the Dang Sale, and More of Your Questions Answered

Also, evading overtime and tips on displaying men’s jewelry. (Hint: Not too close to the ladies’ goods.)

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I’ve got a woman on staff who simply adores jewelry, and she never fails to engage a customer in a lively discussion, but for the life of me, I can’t teach her how to close the sale! Help!

Failure to close is most often a combination of lack of basic skill and fear of being too forward or pushy, says Kate Peterson of retail consultancy Performance Concepts. Be aware, she says, that you can’t effectively teach “closing” as a separate and disassociated thing. If your associate is good at engaging the customer in conversation, focus on teaching her how to make emotional connections between what the customer wants and what the merchandise provides, and to listen for signals that indicate it’s time to close. When it comes to more expensive fashion wear, remind her that most customers are often looking for permission to buy. “Providing good service means giving it to them by asking for the sale,” says Peterson. There are also situations when your salespeople will be grateful to be “let off the hook” with a particularly chatty customer via a personal intervention from the boss, meaning you. Finally, consider your commission structures. A motivated staff will use their time in the store as efficiently as they can … because it’s in their interest to make as many sales as possible.

I’ll admit I’m a helicopter manager, but if I didn’t keep a close eye on everything and constantly intervene, nothing would get done properly. How can I get my staff to show more initiative and responsibility?

It sounds as if you’ve micromanaged your staff into drones. Basically, you’ve got two options: go big picture, where you give them ownership of their responsibilities on a day-to-day basis, or go small, where every procedure and system is mapped out in detail. The first requires employees with the right personality and experience who will know what to do when you say, “OK, our goal is to wow every person who comes into the store. Go to it!” The second requires a lot of work from you in putting systems in place and providing the necessary training. In such cases, David Geller recommends imagining that you’re planning to open another business 3,000 miles away and putting in writing everything you’d want the remote employees to know about managing the store, from how to run the point-of-sale system to how to make deposits to who to call if there’s a building problem. With such a reference, you’d be able to step aside, and in theory, be confident your staff would be equipped to tackle most situations. Keep in mind, though, that these situations often reflect as much about the manager as the staff. Taking action is how micromanagers deal with anxiety — just as surrendering control is how under-functioning staff deal with challenges. Breaking the pattern is tough, because the manager needs to step back and do less, which means potentially letting bad things happen and tolerating the resulting anxiety. Can you handle that?

Juggling employee schedules to avoid paying overtime is increasingly becoming an issue in our growing store. Should we just move several employees to salaried positions? No more messy rosters. No more overtime. Right?

Likely very wrong. This is a strategy that “has been used so often to avoid paying rightful overtime, that it is written into the law through the Fair Labor Standards Act,” says Scott Clark, a lawyer and founder of the HTC Group. Yes, there are salaried positions for which there are exemptions from overtime rules, but they tend to be “true” management roles and jobs that require a college degree or technical training. They must also pay more than a minimum of $455 per week, and the salary must be the same every week (so if your employee wants time off to see the doctor, you still have to pay his full weekly salary — no more docking wages for hours not worked). If it seems that the government is uncharacteristically protective of lower-income workers in this instance, never fear, it really isn’t. On the contrary, the government IS very particular about all the taxes and Social Security that get paid on overtime. We’d say a better approach is to view your employees as an asset who make you money, not as an expense. Invest in your employees to make them more efficient, and they’ll make you even more money. Or hire the staff you actually need.

What happens if I let a customer into my workshop? Am I liable if they get hurt?

Yes, you are, say the legal minds at the Jewelers Vigilance Committee. However, no more so than if a customer was injured on your sales floor — or your sidewalk (although the potential risk to a customer may be greater in your workshop, depending on the level of manufacturing that goes on). It’s always a good idea to regularly review your insurance coverage to check the limitations on how you are covered and under what circumstances.

What are some tips for displaying men’s jewelry?

According to Larry Johnson’s book The Complete Guide to Effective Jewelry Display, men’s jewelry should be displayed in cases that are less than 6 feet in length with no less than 3 feet of space allocated for displaying merchandise.

Given the infrequent nature of jewelry self-purchases by men, men’s jewelry should be out of the store’s normal traffic area.

Men tend to not like shopping near ladies’ goods. “Position your store’s men’s jewelry case next to the watch counter or the cash register area where they’ll be better attended,” suggests Johnson. For the display itself, use larger elements (ring fingers, bracelet ramps and risers) in more “masculine” fabrics such as gray herringbone or other “suit” fabrics. Regarding the display of the jewelry itself, showcase items that facilitate a man’s infrequent self-purchases. So dispense with price-point displays and group men’s jewelry with like items, such as tie tacks with cufflinks.

Men’s jewelry is pretty much “no fuss no muss,” so use signage that enhances the appeal of the jewelry such as “14K gold” or “hand inlay.” For case trimmings, avoid the sports and sports car clichés. Opt for more timeless elements like antique fly-fishing reels, old toy cars or old sports items.

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What’s a Fair Salary Plus Commission Rate and More of Your Questions for April

Bosses and workers often have different ideas on what’s equitable. Here’s how to make everyone happy.

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I have an employee who makes $16 an hour and 6 percent on retail (although for loose diamonds, commission is based on gross profit). She earns close to $60,000 a year but feels underpaid and that paying gross profit on diamonds is contrary to the industry standard. How can I convince her she has it pretty good?

She does indeed have it pretty good, says industry consultant Andrea Hill, owner of Hill Management Group, noting that her hourly rate is almost 50 percent higher than the average for retail salespeople of $11.50, and even more than the average of $15 paid by very high-end luxury retailers (think Gucci). The commission is also higher than the industry average of 3-4 percent on retail, although, significantly, Hill notes, “wise” businesses are increasingly moving away from such a formula to pay commission on gross margins. “In this way, sales professionals are challenged to balance the need to get the highest price possible with the need to close the sale. When commissions are paid out on total sales only, then it becomes very easy for the salesperson to sacrifice profits for the easy close,” she says. While exposure to such numbers should mollify your associate, what you really want to do is excite her about the potential of earning as much as $100,000 a year — which is what top luxury salespeople make — although that requires building a “strong book” of customers through active networking, clienteling and prospecting work. Keep in mind, however, that even the most generous commission rate won’t help if you’re not on top of your game, meaning advertising intelligently, keeping up with changing retail trends, providing the right technology for how consumers today want to shop, and maintaining an exciting inventory that reflects current tastes, says Hill. “If the retail business owner does not ensure that they are running a strong merchandising and marketing operation, then even the best salesperson in the world will not be able to turn the promise of commission into actual earnings.”

Video: 3 Millennial Couples Reveal Their True Thoughts On Lab-Grown Diamonds
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Video: 3 Millennial Couples Reveal Their True Thoughts On Lab-Grown Diamonds

Video: How to Turn Prospects Into Paying Jewelry Customers
Jim Ackerman

Video: How to Turn Prospects Into Paying Jewelry Customers

Video: Gene the Jeweler Explains How to Fire People
Gene the Jeweler

Video: Gene the Jeweler Explains How to Fire People

I still can’t get my head around color temperatures. Can you help?

It probably helps to think of the original theoretical model that underlies the index — that of a black metal radiator, whose color changes as it is heated, from black to orange to red to blue to white hot. Similar to Celsius and Fahrenheit, the Kelvin scale marks different degrees of thermodynamic temperature, but it is the association with color change that makes it useful as a way to designate light bulbs. Where it gets confusing is how at the lower end of the scale, from 2000K to 3000K, the light produced is called “warm white” and ranges from orange to yellow-white in appearance. Meanwhile, color temperatures further up the scale, between 3100K and 4500K, are referred to as “cool white,” but the bulbs are emitting a brighter, hotter light.

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We’re planning on holding a thank-you dinner for our best customers to celebrate our store’s 50th anniversary. How do we avoid offending people, especially those small ones who have been loyal if infrequent customers for many years?

This is a tough one. We’d suggest you start with the number of people you’re able to host and then divide that figure up among your sales staff. They should know who their most deserving and valuable customers are. Refrain from advertising the event to all your customers so as not to offend those who aren’t invited. You may also want to prepare a back-up list so you can add names in place of those who can’t make it — there will no doubt be many — to cover as many people in your customer base as possible.

What’s a good way to sell our company to prospective employees — particularly top salespeople?

Just about the most valuable skill a businessperson can have is the ability to recruit and retain good people and yes, it all starts with that job posting. “When the right people read your ad, their hearts will whisper, ‘These people are like me, and I am like them,’” says Roy H. Williams, author of the business bestseller The Wizard of Ads. Bullet point what the job entails, what kind of inventory they will be handling, and also the benefits, but the core message should be about who you are as a company, your reputation and your goals. The best salespeople often have don’t have a sales background, so go easy on the requirements. Your message should be more about culture than qualifications.

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How to Address Drama In Your Store and More of Your Questions Answered

Don’t miss: How to avoid getting in a price war with a competitor.

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My store seems like a reality TV show: all unnecessary drama. It’s exhausting, but addressing it only seems to add fuel to the fire. Is there a way to bring it under control?

You’re not alone. After profitability concerns, this is the No. 1 headache of business owners, says business coach Lauren Owen. Drama and discord create stress and hurt productivity. There is no quick fix, but there are a number of things you can do, starting with regular meetings. “Scheduled, well-run meetings are essential to clear communication and team building and addressing potential conflicts,” says Owen, adding that such meetings are conspicuously absent at stores with drama issues. Other steps include confronting your drama queens, addressing your underperformers (there is often a hidden cost in the resentment they cause), performing a cost-benefit analysis on your high-maintenance employees (sometimes they just suck all the energy out of a store), and finally, taking a good look at yourself. “Some people actually like drama, despite what they say,” Owen says. “If you were really honest with yourself, you might understand that the drama is satisfying some need of yours. Attention? Power? Control? Do you avoid all conflict, even healthy conflict, at all costs?” And are you giving your staff a clear sense of purpose — that jewelry is about something bigger than profits or self-interest? Employees instilled with a sense of higher purpose tend to grouse a lot less, Owen says.

Video: 3 Millennial Couples Reveal Their True Thoughts On Lab-Grown Diamonds
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Video: 3 Millennial Couples Reveal Their True Thoughts On Lab-Grown Diamonds

Video: How to Turn Prospects Into Paying Jewelry Customers
Jim Ackerman

Video: How to Turn Prospects Into Paying Jewelry Customers

Video: Gene the Jeweler Explains How to Fire People
Gene the Jeweler

Video: Gene the Jeweler Explains How to Fire People

What are the pros and cons of hiring older workers?

The list of advantages is as long as their teeth: seniors are often more responsible than their younger counterparts, call in sick less, work harder, don’t get involved in office politics, and have good life skills. Yet many retailers have mixed feelings about hiring those over the age of 55. To be sure, some older workers do tire more quickly from long hours on the sales floor or may want to work shorter hours either for personal reasons or to protect their Social Security benefits (but that can also mean fewer benefits that you’re obliged to pay). Ultimately, your decision should be guided by this rule of thumb: in retail, people like to do business with people who are like them or share their interests. So, make sure your staff matches your area’s demographics. Although for just about anywhere in the US, that now means a graying market. According to Bureau of Labor Statistics projections, 25 percent of the workforce in 2024 will be over the age of 55.

Where can I get my old displays rewrapped?

We applaud your frugal instincts, but this is a bit like getting your 14-year-old refrigerator reconditioned — you’re often better off buying a new one. “The costs are prohibitive and the old display structure is usually destroyed in the process,” notes Larry Johnson, the author of The Complete Guide to Effective Jewelry Display. Johnson recommends you tell your display vendor what you liked about your old display and get them to help.

Should I delete old names from my email bulletin list?

Your email marketing program will be more effective the cleaner and more up-to-date your subscriber list is, but there are a few things you should do before you start deleting names. First, segment your subscriber list into new, active and inactive customers. “Reach out to the old customers on your list with a different message. Contact them with a special offer, information about something that would be of interest to them, or educational information that would benefit them,” advises Steve Robinson, regional development officer (Illinois) for Constant Contact, which provides email marketing services to more than 300,000 small businesses and organizations in the U.S. “Consider offering a link to an online survey that would allow them to tell you what specifically they are interested in.” If there is no response after two or three more attempts using this approach, Robinson suggests you consider those addresses inactive and either remove them from your list or move these people to a new list to which you email only once or twice a year so as not to lose contact with these old customers completely.

A new competitor seems to be trying to undercut our prices on everything from diamond prices to repairs. How can we avoid getting in a price war?

First, understand that not every price challenge is real. Many of your customers make their purchase decisions because of the quality of your products, services (especially your services), or just the relationship they have with you. Still, if you’re sure price is the issue, and you are losing customers as a result, you may want to a adopt a three-tiered pricing strategy by offering premium and budget options in addition to your regularly-priced goods. The idea is not actually to sell the cheaper or more expensive options, but to underscore the true value you are giving customers with your regular prices through your explanations of what they get with each option. When consumers are faced with such choices, they overwhelmingly choose the middle road.

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