[Jewelry making - Article 00686] - Re: [Orchid] The Blue Book for repair prices?

[David Geller]

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>     I would hope, however, that your overhead is correspondingly low to
>     allow you to make a profit at a lower selling price, or you are
>     able to do a higher volume of sales. If not, you will struggle to
>     survive, and will eventually be forced out. I have the opposite
>     problem with the Blue Book: many of the prices quoted are too low
>     for my store. I use the Express pricing for most of the basic
>     repairs, since they were written when gold was at $300.00 per
>     ounce. Our overhead is higher than many stores, but the location is
>     comfortable for our customers.

    This is the 5th version of the Price Book and I usually quit
    carrying the older version when a new one is published. But this year
    I decided to keep both versions. 

    Version 4.0 is based upon $400 Gold & $840 Platinum. The labor
    prices are 15-25% HIGHER then the previous 3.2 version. 

    The previous version (3.2) is approaching 4 years old this summer.
    Even though this one is 4 years old it's still good for many shops
    who hadn't tuned into pricing yet. 

    As an example a half shank weights 1-1.5 pennyweights. 

    In the 3.2 version it's priced at $110. the 4.0 version is priced at
    $140. 

    I figure TODAY gold cost $18 per dwt so a 1-1.5 dwt shank COSTS $18
    to $27. What would you markup an item at that cost? As a finding in
    any finding book it's 3 times, therefore if a customer said "hey, I
    want to buy the gold, my husband will put it on" you would SELL her
    the gold piece for $54 to $81 just for the gold. 

    The 3.2 book has sizing smaller $22 ($28 in the 4.0). I figured to
    install a shank is the same labor as 2.5 sizings. Think about it.
    Putting on a shank at 9 o'clock is like sizing a ring smaller (pull
    together and a solder) and the same goes for attaching a shank at 3
    o'clock.  So at $22 each smaller that's $44 in labor. I then figured
    SHAPING the shank as half the labor as sizing a ring smaller. 

    Therefore a half shank would be the labor: 

    2.5 times $22 = $55 for installation 

    Plus 

    The gold 

    (I figured 1.5 dwts for pre filed weight) 

    1.5 dwts  AT  $18 per dwt = $27 times a 3 time markup = $81.00 for the
    gold 


    Add it together ($55 + $81) and you get $136.00, it's $140 in
    version 4.0. In 3.2 when gold was cheaper it was $110. 

    I STILL meet people charging $65 to $85 for a half shank. For those
    who say "no one will pay" the correct answer is "I haven't any GUTS
    to ASK". 

    My prices are based upon the labor costs of a $40,000 to $50,000 a
    year hourly wage jeweler and a 3 time markup on the materials. 

    If your jeweler is making in the $30,000 range and your overhead is
    low and maybe even a small town, the 3.2 version will work and make
    you a lot of money and is proven over 4.5 years. 

    But if your jeweler COSTS you over $40,000 and you think you'll need
    to charge less then you can as long as a few things occur: 

    A. Your $40,000 a year jeweler is much faster than the 4 I had. 

    B. Your material costs are less than what I found at the Stuller
    site (where I got the costs) 

    C. Your markup you want is less than mine. I wanted a 4 time markup
    on the jeweler, so after paying matching taxes I got close to a 3
    time markup. So if you'll accept a smaller markup than an overall 3
    time, then you can charge less and be happy. 

    I met one fellow who did this. He told his sales staff 

    "Increase all of my repair prices a dollar a day. A $10 solder today
    is $11 tomorrow and $12 the next day." 

    He figured one day business would drop off but he'd do MORE money
    with LESS work. 

    When I spoke to him a $10 repair was now $25 and he was taking in
    the SAME NUMBER of job envelopes. 

    For all of you skeptics, you should increase your repair prices a
    dollar a WEEK and track what happens. 

    You will be amazed. 


David Geller
www.JewelerProfit.com

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