[Jewelry making - Article 00348] - Re: [Orchid] The Blue Book for repair prices?

[David Geller]

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    Thanks Jerome for mentioning my Blue Book. 

    I made the price book for repairs and custom design for my store, it
    just so happened to start being requested by fellow jewelers when I
    showed it around. 

    I sold my store in Jan 2000. In 1999 we did over 8800 jobs. We did
    over 1.8 million in sales and 75% of that came completely from the
    shop-a lot of custom design. 5 Jewelers, a waxer, a polisher, shop
    foreman, 4 sales people and office staff. All retail. 

    I did a time study in the late 80's, bought every jeweler a time
    clock and times everything. Found out they take 25% longer than they
    say to do a job and we added in 25% more to their pay for matching
    Fica, medcare, vacation, insurance, etc. 

    We figured in the late 80's that a jeweler should be paid $30,000,
    so we used $15 per hour as the cost factor, times the time study plus
    25% for benefits PLUS 25% for down time. So a one hour jobs ($15
    cost), with added benefits and down time, ended up costing $23.75
    rather than $15. 

    Then we marked up the jeweler as if he/she were nothing more than
    inventory. 

    THREE TIMES. 

    Marked up the parts three times too, 

    Put it all in a book for the sales staff. 

    We were worried as you folks are that people would walk. 

    They didn't. In fact every time we raised the prices we found the
    same thing - 90% bought because of one thing and one thing only: 

    REPAIRS ARE NOT PRICE SENSITIVE, THEY ARE TRUSTS SENSITIVE. 

    By the way, I'm a 14th generation jeweler, doing this since I'm 10
    at my fathers factory. I understand all of this. 

    Because of the book and time study we paid our jewelers on
    commission, which financially turned our company around. In 1987 we
    were about to go under because we paid fair hourly wages to the
    jewelers but called our competition to get pricing. How dumb. So dumb
    we almost went bankrupt (really). 

    So in '87 we did the time study and placed the jewelers on
    commission. 3 out of 5 quit, the 2 who stayed increased their
    personal income by 50% in 3 short months. I ran the company on
    commission until selling the company. The jewelers made: 

    $30,000
    $42,000
    $49,000
    $61,000

    As did the sales staff, they were on commission. 

    This one act turned the company around and made it profitable. 

    You don't have to use commission to use my book but that's how I
    know what it cost to size a ring or install a shank. I know my prices
    are correct as it paid $45-$55,000 as an average wage. 

    Then we just marked up the jewelers wages 4 times and 90% of
    customers said "OK". 

    There are 2 versions on the web site, 3.2 and 4.0. 

    3.2 is about 4 years old and good for stores who have an AVERAGE
    PRODUCT SALE of under $300 ($250-$300 and under). 

    4.0 is good for stores with an average product sale above $300. I
    have found that repairs are not price sensitive, they are trusts
    sensitive. But I've also found that Wal-Mart customer won't go to a
    Buick dealership to have their Hyundai fixed. If you SELL lower end
    jewelry you'll get lower end type customers and their jewelry to be
    fixed so the lower priced book will work. (This all is in the hope
    that you don't pay high wages to your jeweler to fix low end
    jewelry). 

    So 3.2 is good for lower priced stores and 4.0 works great with
    stores with an average sale of $300 and up. 

    The closing ratio for folks using my book is about 90% for repairs
    and 70-80% for custom design. Most stores tell me the price book
    increased their shop sales 50-100%. 

    Every year or so on Orchid someone asks and I post about the book
    and then 10 people post how they can't won't or had a bad experience
    using commission. Commission system is built into the book but you
    don't have to use it. But it you PAID your jeweler $xx.xx every time
    you sized a ring, installed a head, sold a half shank, you'd look at
    your pricing structure completely different. 

    When I sold my store these were our average sales: 

    Average product sale $400
    Average repair sale  $65
    Average Custom design (labor only-we'd use the customers gold) no
    material at all - $750. If we sold material, average custom sales was
    about $1500 +. 

    It comes with a 30 day money back guarantee. If any wants me to fax
    some pages to them of either, email me your fax number and I'll be
    glad to. 

    So I sold my store to my top sales person and all I do now is help
    jewelers make money in the same ay I did. 

David Geller
Director of Profit
www.JewelerProfit.com
JewelerProfit, Inc.
510 Sutters Point
Atlanta, GA. 30328
(404) 255-9565  Voice
(404) 252-9835   Fax

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