[Jewelry making - Article 00162] - Re: [Orchid] Geller's pricing system

[David L. Huffman]

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>         hi I was working for a jeweler in a small town near a larger
>     metro area. Last week he tells me that I have lost all my benefits
>     and will be a  subcontractor or I can leave.for  those areas. 

    Hi John; Grrrr....I'm ready to help you with this one. 

    You'd better get control of this situation or you are going to end
    up holding a very short end of the stick.  First, if you are to be
    truly a subcontractor (and legally so), then you will be using all
    and only your own tools (unless you rent or lease from him, and it
    needs to be on the books). You come and go on your own schedule, he
    can't tell you how to do the job or when, just when he'd like to have
    it finished, and you can agree to that if it's possible.  You keep
    the hours you choose, and you pay all your own bills or pay him for a
    part of utilities, phone, etc.  Better get a cell phone.  If you are
    working with his customers, answering his phone, taking inventory in
    and out of the safe and cases, you charge him, or he can get a
    salesperson to do that.  You should give him your own wholesale
    price list. Anything not on your price list, you estimate the
    charges.  Make sure that it's understood that an estimate is not
    binding, if it costs more, you get more, if it costs less, be honest
    and let the customer have it.  You supply all materials in the way of
    gold, solder, gas, oxygen, polishing compounds, everything.  And
    those bench sweeps are yours to send to the refiner and you keep the
    gold or the money.  He can provide findings and stones, etc., as he
    chooses.  If you supply them, mark them up on sliding scale.  More
    markup for lesser costs, less on higher dollar items.  This is
    because, if you buy materials, he is marking them up for the
    customer, and you are supplying him inventory and making nothing on
    that investment if you don't charge.  Would you put finished jewelry
    in his cases, let him sell it, then pay you what your cost was?  You
    give him a bill, according to your terms.  He pays it, according to
    his and your agreement. Get a charge card for your business, charge
    everything, make the payments, or use a debit card.  You need a paper
    trail of your expenses.  And hook up with a good accountant (that
    goes into your cost of business too). 

    Price custom wholesale by time and materials (plus that markup). 
    Your hourly rate must include you wages, the withholding, the
    employer's share of withholding, Social Security (employers and
    yours), workers comp insurance (unless you opt out) and all your
    other costs like rent, phone, materials, tool replacement,
    everything.  Now add to your cost of operation a reasonable profit,
    at least 10% in my opinion.  Oh, and add in the cost of you benefits,
    medical (join the local Chamber of Commerce to get a good rate on
    medical insurance, or join MJSA and look into their benefits).  If
    you'd like, I'll send you my wholesale price list and a profile of my
    monthly expenses, but for now, make sure you charge at least $40 per
    hour.  And by the way, if you are an independent, he really should
    have nothing to say about you doing work for anyone else or your own
    customers, as long as you don't "bird-dog" him in his showroom or the
    parking lot.  Tell him, if he doesn't like it, he can go fish.  If
    you've been a jeweler as long as you have, you can get a full time
    job for $50-60 thousand a year and benefits, and if you're missing a
    few techniques, like wax carving, whatever, we here at Orchid can
    hook you up to fix that.  It's a shame when these retailers want out
    of their commitments to keep their own piece of the pie intact. Fact
    is, you can figure out what a jewelers is costing you, slap your
    markup on that, and he pays for him/herself and more.  Tell us, do
    you ever have time to sit around on your thumbs?  If not, then you
    have not let him down, he's failing in other areas.  I know people
    are going to say it's the economy, but a bench jeweler, if the boss
    is running his business right, will always have enough work to pay
    for himself and make money for his employer (unless he's a slacker or
    a hack).  And I can tell you from experience, if he lets you go, he's
    going to either end up paying more or getting less.  I've seen it,
    some of these guys aren't too bright.  If he doesn't like the deal
    I'm suggesting, then you find an inexpensive office to rent as close
    to him a possible, hang out a shingle, and offer quality, fast
    turnaround repairs at very competitive prices.  Don't think the
    customers don't know who actually does the work.  And whatever you
    do, maintain integrity, it's the key to success. 

David L. Huffman


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