[Jewelry making - Article 00360] - Re: [Orchid] The cost of holding out

[Dreamgate9]

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    Ron, While I do agree with the argument that we independent
    goldsmith/jewelers have to be competitive, I also agree with David's
    assertion that we are undervaluing our work. What you say about the
    big giant stores may be true: their overhead is monstrous compared
    to mine, and they can purchase at volume discounts, with better
    terms, receive co-op advertising from their suppliers, and go after
    a lion's share of the market. So, why were my profits up 47% last
    year? 

    I raised my prices. I looked at what my competition had to offer,
    and offered my customers an alternative. I create fairly labor
    intensive pieces, mostly fabricated in 18k and platinum.  I have
    knowledgeable salespeople, who actually listen to what the customer
    wants. I take extra time working with each customer as an individual
    who is making a very important purchase. Our store looks like an art
    gallery, but we dress and act very casual and relaxed. I will treat
    a customer to lunch at a fine restaurant if they have to wait. They
    are my friends, after all. I use only the finest ring boxes I can
    find, and wrap their purchases not in paper, but in silk. All this
    is expensive, but not as high as the expenses that my big
    competitors have. 

    Let my competition build "mega-stores" with row after row of the
    same old things. My stock turns 4-5 times a year, so it is always
    fresh and exciting. I can adjust with the seasons, and with the
    economy, within a few weeks. They can't. Most importantly, I can
    give my customers what they want. An experience. And respect as an
    individual, not as a sales unit. 

    Being competitive, I have learned, is RARELY about price. It is the
    total value of the experience that you receive. I bought David
    Geller's repair book, and learned that I was truly undercharging for
    a lot of the smaller jobs that we do. I raised my prices, and not
    one person objected (I also learned that my competitors are also
    using David's book now). My markup is now (in general) 5X cost, if
    cost is materials and labor. I may not have high rent, but I do
    throw in a lot of "extras" and I have to charge for that. The
    amazing thing is that, unlike the cost of advertising and rent,
    customers can SEE that they are receiving more for their money. 

    I agree with you: milking every last cent out of the customer does
    not insure profitability, and your assessment that modern customers
    are increasingly sensitive to getting a "fair deal" is right on the
    mark. Just remember that your knowledge and skill are what really
    make you competitive. "An apple is an apple, but a sweeter apple is
    worth 10 cents more (and a sweet organic apple is worth the most)!" 

Doug Zaruba



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