[Jewelry making - Article 00466] - Re: [Orchid] The cost of holding out

[Daniel R. Spirer]

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    Well actually the time line for the formula may be a year, but IMHO
    that is an extremely short sighted view of the world.  I have never
    looked at my business as a do or die in a year kind of thing, and I
    think for most of the Orchid posters that is true as well.  Most of
    the people on list do what they do because they love it and want to
    do it for the rest of their lives. 

    My example of boosting your price point was not based on the idea of
    doing it in a year (which is exactly why the formulas won't work for
    it).  It was based on having a long term vision of what you want to
    achieve.  It took us about 12 years to make the move up the ladder
    (in terms of raising our average price points), and we continue to
    follow this path today. 

    Three years ago we made a conscious decision to boost the clarity
    grade of the diamonds we were selling (which, as branded diamonds
    were more expensive than most to begin with), simply by reinvesting
    some of our profits into higher clarity stones that we knew wouldn't
    sell immediately.  When all we had and showed were SI grade stones,
    that was the clarity that we predominantly sold. Now we show only VS
    stones and that is what we predominantly sell.  We are on a new 5
    year plan to boost it up to the VVS range as well.  You'll note that
    none of these actions took a year, nor did we have the shortsighted
    view that any of them had to happen in a year. Could we have earned
    slightly more money in the last 3 years by not boosting the clarity
    grade of the stones?  Of course.  I probably could have pulled an
    extra $5-10,000 out of the business.  But the reality is that by
    doing what we did, and this is despite the rather severe current
    economic downturn, we are now making more money on every diamond we
    sell and for the next TWENTY years we will continue to do so.  We
    have also continued to boost our images in most of our customer's
    minds as being a quality store to buy from. 

    I agree with you that most jewelers undervalue their work.  In my
    posting you will note that I said this, and noted that it was
    particularly true about repairs.  However once a jeweler gets past
    the point of undervaluing his work it becomes critical that they look
    at the long term view of what they want to achieve as jewelers.  Not
    everyone will want to follow our path as it can require a great deal
    of sacrifice.  But if they stick to the tried and true they won't
    ever have a chance at succeeding at something else. 

    You should also note that it seems that most of the Orchid list is
    composed of producing jewelers as opposed to buy/sell jewelers.  They
    face a whole different set of issues than the buy/sell jewelers do,
    who I am sure are a group that absolutely will benefit from your
    inventory advice. Daniel R. Spirer, GG Spirer Somes Jewelers 1794
    Massachusetts Ave Cambridge, MA 02140 617-491-6000
    spirersomes AT earthlink.net www.spirersomes.com 



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