[Jewelry making - Article 00405] - Re: [Orchid] The cost of holding out

[MillsGem]

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    All, Having read all of today's posts regarding Geller's pricing
    policies, I would like to make some observations and comments that
    expand on some of the comments that I have made. 

    One of my contentions is that today's customers are better informed,
    more price sensitive and are leary of getting ripped in the
    marketplace. They are also aware of the competition that has come
    into the market from abroad. They are nowhere near as prone to pay
    high marhp prices as they once were. They are also aware that the
    foreign competition is constantly improving its workmanship. I am
    old enough to recall how the output of goods emanating from Japan
    was held in great disdain since it was very inferior in quality and
    workmanship. Nowadays the Japanese are the standard bearers of
    quality ! In a more recent context, I remeber how the Indians were
    held in disdain because of ther low quality of their workmanhip and
    materials. Today they show constant upgrading of their product. I
    also recall how just a couple of decades ago Sri Lankan cutting was
    to be avoided at all costs because of the terrible cutting. 

    Brazilian cutting has also greatly improved, although they still
    slip in some badly bellied stones ! 

    My point is that we have a convergence of forces heading on a
    collision course. On the one hand foreign competition is
    increasingly eroding market while, on the other hand, we are
    deliberately becoming LESS competitive. It is just a matter of time
    before most of our repair work will be shunted off to maquilla
    operations along the border of the United States. These operations
    are usually operated by Americans who introduce modern shipping
    methods, tightly controlled stock and high quality workmanship. 

    Heretofore, we have maintained a competitive stance because we
    availed ourselves of the latest in technology. We no longer have
    that advantage. Our technology is shipped all over the world.
    Furthermore, because high tech is capital intensive, you will find
    that foreign governments step into the picture and finance the
    import of said technology. As a sidenote, you may have noticed how
    the Brazilian government subsidizes it's exporters by giving them
    free transportation to the major shows in the 'States. And, as if
    this were not enough, our own government subsidizes the export
    efforts of our foreign competitors. 

    David's effort to encourage higher prices is certainly appropriate
    for the bigger operators. The overhead of the larger jewelry
    entities are astronomical. Anybody who has to hire employees is also
    hiring non productive overhead  ( because of all the perqs. that go
    with modern employment. ) 

    On another plane, let's not overlook the economic realities of our
    times.We have growing unemployment and wages are essentially
    stagnant.The stock market is on it's ass and the various state
    governments are flirting with bankruptcy. Real estate costs are, on
    the other hand, still going through the ceiling. In our area only 21
    % of the families can afford to buy a home........the median price
    of a home is $390,000 !   

    In light of the foregoing, are you going to tell me that people are
    not going to care about what they have to pay to repair their
    jewelry or buy their baubles. Nonsense !   

    I wholeheartedly agree with the need for realistically setting
    prices. Cost/profit ratios are essential to the survival of any
    business. But, I also observe that many businesses don't make any
    real effort to reduce overhead. I am a firm believer in KISS....keep
    it simple stupid ! The greatest opportunity today in the jewelry
    business is for the small operator who does not have to hire
    employees, is located in a small town, who mixes within the
    community and who stays abreast of skills and technology. I charge
    less because I keep my overhead low, low, low ! Today, less is more 
    because more have less.......!     Ron at Mills Gem, Los Osos, CA.




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