[Jewelry making - Article 00212] - Re: [Orchid] Costs, margins, and goldsmiths

[David L. Huffman]

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>         I am constantly in awe of the wisdom which is present in
>     retail. David Keeling 

Hi David;

    Great story!  I have had a problem with retail mentalities too for
    some time now.  I am a wholesale repair and custom jeweler with a
    small shop and 2 employees.  Now wholesale repair is a lean business.
     I engineered my price list very carefully to keep it competitive for
    the area.  I've subsequently drawn a lot of business from my
    competition.  None of us are getting rich though.  I've been trying
    to move my own designss locally through a couple of retailers.  My
    first attempt, I put a dozen or so pieces in a store, gave the owner
    my wholesale prices and let him slap his chosen margin on it.  The
    stuff sat for 9 months, not a single sale at 2.5 X markup.  I pulled
    it and went to another retailer.  This time I told him I would set
    the retail price.  My cut would be the cost of materials plus half
    the margin over those costs.  Two pieces flew out the door within a
    couple weeks.  He's okay with that and so am I, but I have a friend,
    another subcontractor, who tried that with his biggest account and
    they wouldn't go for it, instead, they wanted to beat him down on his
    cut, so he walked on it.  I think the retailers are going to have to
    realize, if they want the competitive edge of unique designs with
    high caliber craftsmanship, if they can't afford to carry those
    expensive lines, they are going to have to share the profits with the
    skilled labor it takes to produce it.  And since custom work is not
    going to be cheap for the customer, how is it that it should be
    cheap for the retailer unless it's coming out of our hides?  You
    can't just call up Yurman or Scott Kay and say, "I've got a customer
    here who needs blah blah blah, but Oh, that's too high . . . "  I
    think if we stand our ground, they'll wise up or they can go fish. 
    Craft Report listed an entirely new category in their annual review
    of who's selling what-where.  It was the "Craftsman Owned Gallery". 
    I didn't exist in last years report, but this year it was the second
    biggest category, right behind retail shows.  This is a pattern. 
    Jewelers are going to have to open their own retail venues, unless
    the retailers can help them stay in business at the wholesale level. 

David L. Huffman

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