[Jewelry making - Article 00401] - Re: [Orchid] The cost of holding out

[David L. Huffman]

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    Hello David, Ron, and others; I have to disagree with the theory
    that repairs are exclusively trust based. I service 5 local
    retailers, and I regularly get calls for estimates coming from
    different retaiilers that are discribing the same job.  This tells me
    the customer is shopping.  I charge them all the same rates, so it's
    thier chosen margins that are at issue.  There is also one local
    retailer who also works at the bench.  He has gotten a reputation for
    gouging customers as well as doing slip-shod work (we should be
    finishing him off shortly).  The other trade jeweler in these parts,
    also known for slow turnarounds and difficult business dealings is
    getting ready to sell out.  Competition is a reality, especially if
    your competitor is capable and hungry.  Of course, it's foolish to
    blindly follow the local prices.  You've got to put price in the
    context of the entire value of the transaction.  Service must be
    prompt, of reliable quality, and attractively priced.  Not cheap:
    attractive.  Maybe a little more, but only do the degree that you can
    demonstrate the other qualities in the transaction.  Of course, you
    can embarass someone into paying too much, but they won't be back.  I
    have had auto mechanics put the wheels back on and take the car down
    from the lift when I didn't like their estimate, but I'm maybe not so
    typical. And I NEVER go back if I find out I paid too much. 

    Now, once you're established as the "quality" jeweler, should you
    raise your prices?  Of course you can, but now it's a moral question.
     Is your overhead more now?  Is the other guy losing money with his
    prices?  Will your customers tolerate it?  so now the question is
    "how much?".  I came from a very small town.  When one of the two
    local groceries burned down, the other guy raised his prices.  People
    are still talking bitterly about that 20 years after it happened. 
    Now both the groceries are gone, and everyone drives to the nearby
    "big city" to shop at the big box chain store grocery. Now briefly
    about the issue of wages.  Of course, free trade has not lowered the
    intrinsic value of skilled labor, it has only increased the
    availability of skilled labor, thereby competitively driving down
    wages.  It was supposed to raise all boats eventually, but it's also
    part of a "trickle down" economic theory, and we know how well those
    work.  So if my accounts can get cheaper labor elsewhere, why do they
    prefer me?  Back to that whole package thing again.  I'm close, I'm
    accessible, my work is consistant in quality, and when you add the
    savings on shipping and insurance, my prices become "attractive". 
    Some of my "qualities" are attractive enough that several out of
    state retailers spend on shipping and insurance to get what I have
    to offer.  Will I raise my prices?  I'd rather hire more people and
    make up it in volume.  If I can provide more "qualities" like faster
    turn around, more types of services, etc., then the package will
    remain "attractive" even if I raise my prices.  But you can be sure I
    will be judicious about it.  That other trade jeweler who is rumored
    to be ready to sell?  He has another problem that's hurting him.  He
    doesn't want to pay good wages, so he doesn't have enough skilled
    help.  I wish I had the capital to buy him out before somebody smart
    does. 

David L. Huffman
David L. Huffman Studios, Inc.



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