[Jewelry making - Article 00843] - Re: [Orchid] Setting customer stones

[David Keeling]

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>     It seems like this is the way things are going to be very often
>     from now on, so how do we deal with it? 

    Interesting question, Stephen. I have run across this many times, in
    a number of different scenarios. A potential customer will bring a
    stone which they have just had delivered to them, and want to know
    if they have picked out a good stone/good deal. I will examine it,
    ask what they are paying, investigate what I might be able to sell a
    comparable stone for, and then give them the bad news...that for
    what they may have saved on the stone, they will pay to have it set,
    or there will be no further discussion. They are dumbfounded, as they
    actually approach us believing that my company will jump at the
    opportunity to set their precious stone for the mere price of a
    custom mount, barely 10% of the total finished value including
    stone. 

    Can't, won't, not gonna happen. 

    If we work with them, design a mounting for a one carat stone, go
    through the paces to make it, set their stone, and charge a price
    which covers all expenses and allows us a meaningful profit, there
    is maybe $500-$1000.00 left over when the work is complete. Damage a
    stone we haven't sold, and we need to use a similar profit from 5 or
    more sales in order to come back from the loss. 

    By comparison, if we are allowed to sell the customer the stone and
    add that margin to what we net on the mounting, our hourly profit on
    the entire transaction increases by about 300% or more. This is the
    "self-insurance" that allows us to justify the risk in handling and
    setting a stone. Without that margin, there is no incentive. They
    won't get 5 minutes from me in the friendly form of explanation. 

    Internet vendors who sell loose stones counsel their customers to
    take advantage of the services of local jewellers because they are
    well aware of the minimal profit available in the manufacturing of
    mounts, and actually prefer to sell the stone loose. They seem to
    think that the local jeweller should be content with the "crumbs" of
    profit available beyond the sale of a diamond, and if we agree to
    set a stone we didn't sell, we have enabled the internet vendors to
    continue to successfully sell stones to more people with little or
    no responsibility to their customers where setting/handling risks
    are involved. 

    We had a fellow approach us about creating a mounting for a rather
    nice sapphire he had sent to him on approval from an out-of-country
    vendor, and I congratulated him on his wisdom, complimented him on
    his choice of stone, and with feigned, excited curiosity, inquired
    about the financial particulars of the transaction...the details of
    the importation, approval, taxes, etc. 

    As I suspected, he proudly told me that stone had been shipped to
    him via FedEx labeled for customs purposes as "mineral samples" and,
    if he decided to keep it, his credit card would be charged the price
    of the stone, and there would be no taxes or duties billed.
    Brilliant! This vendor isn't engaged in smuggling, they are simply
    saving their customers money!! 

    I then informed him, straight-faced, that I would happy to design
    and assemble a mounting for him as soon as he brought me copies of
    import documents proving that he had paid the appropriate fees,
    which are always a part of mine and other jeweller's costs. He turned
    red, and was understandably taken aback, and when he left I felt
    victorious. There was no way I'd ever see him again, and that was a
    good feeling. 

    I discovered that I could have sold him an equivalent stone, my
    profit included and all taxes paid, for roughly the same price he
    paid to the internet vendor. It would have been a "working uphill"
    sale, though, as the internet purchasers have it in their head that,
    no matter what, they have already made the most clever and
    economical choice by web-shopping, and that the local jeweller
    cannot possibly compete in price or selection, but will happily
    serve them and hold their hand while they dither on mount design and
    express anxiety about leaving the jeweller their stone. 

    As most internet vendors have a 30 day return policy, I take full
    advantage of that window to swipe every sale that I can from them by
    suggesting to the potential client that they will be better served
    if they buy the entire package from me, which more often than not
    makes perfect sense to them. Turning around that sale gives every
    brick and mortar jeweller an opportunity to create a great deal of
    goodwill with a first-time client, which can translate to referrals
    and exponential growth in business. Yes, you can fight back, and
    win. 

David Keeling
www.davidkeelingjewellery.com
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