The marketing of jewelry at the retail level has long been viewed by the public as having excessive markups, and many retailers plan their advertising programs in an effort to convince the public that their pricing is lower than their competitors. Hopefully most of you realize that both statements in the first sentence are “hogwash”, but I will try and explain as best as I can in this limited space.
First, retailing anything today is an expensive process. You must either buy or rent space in an area zoned (and priced) for commercial activity, invest tens or hundreds of thousands of dollars in inventory, equipment, displays, make the location attractive to the public, supply parking, lighting, security, insurance coverage, pay employees to be there, maybe educate them about what they are selling,, and after all of that the first person in the door asks for a donation for some worthwhile cause you know nothing about and could care less. Hopefully you begin to get the general idea. You have invested every dime you had, every dollar you could beg or borrow, and the only method you have to get any return on that risk is to sell your goods and make a profit. Profit is not what you stick in your pocket when a customer leaves, but the money left after you purchase another item that you sold, and use it to pay your employees, the Consumers bill, the telephone bill, make the payment to the bank, etc., etc. You will be lucky to have any left to pay yourself for the pleasure of working 80 hours this week, let alone to hope for any return on your investment.
Getting back to the markup needed to sell your jewelry, pay the bills and keep the doors open the rest of the year? Only as much as absolutely necessary! You must remember that your competition will see to it you don’t charge too much markup. Set your prices too high and your customers will go elsewhere. Set them too low and you won’t be here long enough to worry about it. All jewelry stores must average about the same markup to stay in business, which goes back to the very first sentence being hogwash. I have always told my customers that there are no bargains when it comes to buying jewelry. I also tell them they probably paid a fair price when they ask me “did I get a good deal?”, and I do mean that sincerely.
What truly does concern me is that the Mall and big-box stores are continuously downgrading their merchandise in an effort to convince the customer that they can sell jewelry for less. The reality is that you are simply buying less; less material, less labor, less quality, and less durability. Many new rings are so thin they cannot be sized. Many stones are set so poorly they fall out during normal wear, and will likely continue to fall out due to poor design and workmanship. You may remember the old saying “You can’t make a silk purse from a sow’s ear”, and that is so true with jewelry. A good design must start at the beginning, not be added in at the repair bench. All we can do during repair is to stick a band aid on the problem and warn you that it will likely happen again, and again.
If you have stuck with me this long, you probably realize I finally arrived back full-circle to the title of this column, “Pay Me Now or Pay Me Later”. Most of you know we repair a lot of jewelry, and that is a very good part of this business. We size rings, repair chains, rebuild prongs, almost anything the customer needs. I guess you might think that I am happy when people buy poorly-made jewelry, but that is not really the case. You see, I would prefer to sell you a ring that we make, and then stand behind that sale with a Lifetime Maintenance Warranty. I promise that you will pay a fair price….once….and never have to pay me later.
My next column will be about jewelry insurance, and I will try and cover a few of the pitfalls you might encounter, as well as some questions you may want to ask your agent. Do you have any questions? Send me an email and let me know what you would like to hear about. Mike@JonMichaelsJewelers.com
