[Jewelry making - Article 01073] - Re: [Orchid] Jewelry in the 80s

[Jon Michael Fuja]

========[ Invite a Friend - http://www.ganoksin.com/invite.htm  ]========

Oh Susannah (couldn't resist),

    I opened our store in 1979, and began a wild ride on the metals
    surge for the next couple of years. Like most situations, there were
    both positive and negative impacts, and as a business owner you need
    to maximize the first and avoid the second. 

    On the positive side, we made a huge amount of money in buying
    metals from the public and re-selling them as fast as possible. I
    have never believed in trying to play the investment game, trying to
    guess the the flow and direction of the market. I would pay cash at
    50% of the return, have a set amount of cash to work with, then
    liquidate as needed. Refiners would be paying about 90% of market,
    and we would drive the metals to them up to twice a week. Like any
    retail business, turnover is the key to profitability, and the margin
    would pretty much remove any possibility of loss. 

    We bought mainly silver coin and gold rings, and paid $1.00 a point
    for the little diamonds that were in most of the stuff. The profit
    was better than anything I have ever seen before or since, and
    allowed us to purchase another jewelry store in another community. We
    hired a full-time employee to handle the metals purchasing, became
    licensed by the State of Michigan, and played a rold in recovering
    stolen jewelry on several occasions, as that also was a negative
    by-product of that period. 

    As to selling our regular products, we made some changes in selling
    that helped. We sold chain by the gram, and adjusted the price daily
    to avoid any loss. We would go through the entire inventory and add
    some as the price went up, but you will find that the overall gross
    retail price doesn't fluctuate greatly as the metal price is the
    smallest portion when compared to labor and stone values. On new ring
    orders, we tied the quote to a gold price, and customers were
    understanding that the end price they paid might go up somewhat if
    metal did so. Surprisingly sales were very strong during that period
    as there was so much talk about the Hunt brothers and gold price s
    that people seemed to think they should buy now and not wait to see
    where the prices would go. 

    On the negative side, there were two main difficulties we faced. One
    was that interest rates were also going through the roof, and I
    remember paying over 22% on our bank loans during that period. Being
    new in business, we were heavily financed, and it became very
    difficult to just pay the interest let alone anything on the
    principle. The other major problem was one that many people don't
    remember as well, and that was the "investment diamond" craze that
    paralleled metals. These phony company representatives worked the
    automotive plants, selling diamonds at above-retail prices to the
    factory workers, promising inflated returns on their investments,
    and leaving town with their hard-earned money. A 1.00 carat
    D/flawless went from $13,000 to $56,000 in a couple of months, then
    crashed back to reality after the companies started to be exposed and
    the guarantees proved worthless. It took a long time to recover from
    this situation, but as with most problems of this nature the business
    finally settled down to what is considered normal. 

    This is a long-winded response to your question, but if you want me
    to be more specific on certain areas write me off-list. 

Jon Michael Fuja


____________________________________________________________________
T h e   O r c h i d   L i s t
Open Electronic Forum for Jewelry Manufacturing Methods and Procedures
____________________________________________________________________
Orchid FAQ:
~ http://www.ganoksin.com/orchid/faq.htm
Orchid Archives:
~ http://www.ganoksin.com/orchid/archive
Orchid Galleries:
~ http://www.ganoksin.com/orchid/gallery.htm
Invite a Friend:
~ http://www.ganoksin.com/invite.htm
____________________________________________________________________
Tips From The Jeweler's Bench - Article Archive
~ http://www.ganoksin.com/borisat/tip_sear.htm
The Jeweler's Selected Bibliography List
~ http://www.ganoksin.com/jewelry-books
Buy Orchid Jewelry:
~ http://www.ganoksin.com/shop
____________________________________________________________________
-Unsubscribe:
-Email: orchid-request AT ganoksin.com Body=unsubscribe subject=blank
____________________________________________________________________