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Custom Design – Earning your money the old fashion way You’re either a full pledged jeweler (or “benchie” as we call you in the trade) or you’re a store owner who sells the service and hands it over to a “benchie”. Either way you’re destined to either make really good money or just eak out a living. There is a boat load of money to be made in custom design, but not in the way you were thinking. Let me explain. I’ve seen it over and over again-a bench jeweler “makes a living” doing repairs and a few designs but needs more money and wants to decrease the time on the bench. How to do that? Simple. BUY INVENTORY! Customers buy inventory, right? Gosh, just think, if I sell $6,000 of showcase merchandise this week, I’ll make keystone or three grand. That beats ring sizing any day. Forget the fact that to have the $3000 to sell this week that you had to sell your soul at the Vegas show for $40,000 to fill up the case! Don’t get me wrong there’s nothing wrong with inventory. Tiffany’s is doing just fine, thank you, with a store full of it. But they know marketing, display, etc. So lets’ go back to the reason why you lost your focus on being a benchie in the first place. You don’t produce enough at the end of the day doing bench work. You therefore see no real reason to push custom design, It’s just more of a headache. The reason you’re not happy with the money is simple: You don’t charge enough! It really is quite simple. You price by “guilt” rather than cost (you really don’t know your cost). Your mantra is “Shucks, I can’t charge that lady $100. It didn’t take me an hour!” You forget that after doing the job for one hour you’ll go to the bathroom, answer the phone, and roll emery paper and after all is said and done before you sit your rear end back into that bench chair it’s actually 1.5 hours. You have to charge for the 1.5 hours. But let’s move on. I mentioned making money the old fashion way. Just like Smith-Barney commercials. Doctors don’t sell any products, neither do attorneys nor accountants. They all make money and they make it the old fashion way. They show up for work at 9:00am, leave at 6:00 and charge $200 to $500 per hour. They have to because they share that hourly rate with their employees, the landlord, Office Depot, etc. (Overhead). Sitting at the bench (or hiring people who sit there) works the same way. You’re charging a fee to accomplish a task. Luckily for you, we can sell product in addition to our “hourly fee”. By this I mean selling casting grain to make the ring, melee diamonds, etc. But you price by guilt while these three professions price by “need”. They need $150,000 and up per year in income to live as they want. They really don’t care what you pay them for their services or that it just “took 20 minutes” to do a will. They have their needs and wants. They are concerned with their livelihood, not yours. So why aren’t there more cut rate lawyers and doctors out there? You know, lawyers charging $35 an hour because their competition charges $80 per hour or more? Because they are single minded in their desire for income. You should be that way as well. Don’t worry that your customers for custom design will go elsewhere. They already can but don’t. I can prove it to you. Look in the yellow pages. Every city has 30 to 300 jewelers! There’s enough business for everyone. Why do people go to your store and not another one across town? At the moment I don’t care, all I know is there’s more than enough demand in custom design. You price your repairs too low so you have to work longer hours to make up for it. This feeds the other side of your brain to charge the same low prices to custom design jewelry as you do for repairs. Jewelry repairs are in the same league as an attorney charging you for a simple will. Both of you will make a living, but nothing to brag about. Wills are not million dollar income makers. But lawsuits are. Custom design is in the same league as an attorney getting paid for a workers comp claim or a lawsuit in an auto accident claim. Both of you can’t retire after one “sale” but man, add them up! Making money the old fashion way by making really good money, day by day. It adds up. Repairs are not price sensitive, they are trust sensitive. Custom design is not nearly as price sensitive as you would think. The biggest obstacle to jewelers making good money from custom is: Comparing hand crafting an item and comparing its value against an already manufactured piece in the case or a catalogue. I’ve had lots of arguments with jewelers when I show them in my price book that its $325.00 just to carve and cast a shadow wedding band. Gold is extra. The arguers will say “How can I charge the lady $325 or more for a 2mm wedding band when I can buy one and resell it from a catalogue for $75.00!” If you were to handmade a plain, old fashioned STRAIGHT edged 2mm wedding band I would agree. But you’re making a ring to fit along the curves, nooks and crannies of her ring. It won’t resemble the catalogue ring at all. And what you’re missing is this: Your catalogue ring at 2mm will look stupid against her engagement ring for 50 years! If you custom make one she’ll be HAPPY for 50 years. What about when a customer sees in your case a diamond wedding band with some diamonds set into the top and it retails for $999.00 and she wants it made differently. It’s nothing you can order; you must wax it, cast it and set the stones so the ring is more suited to her hand. It could have a price tag of $1350.00 now. “Why more to make me a ring that’s a little less wide?” It’s worth it to get what the customer wants. In this case its just $351 more to get it just the way she wants. But knowing you as I do, you’d say “Gee, this ring weighs a little less, the diamonds are a little less; there’s no way I can charge her more!” Let’s assume the new ring is 5 dwts and has 10-6 point diamonds. Wrong again. You’re pricing by guilt, you should be pricing based upon cost and the cost to make this one is more than buying it from New York. If you analyze just how the New York manufacture charged you for the ring and what YOU will have to pay to get the ring made either in your shop or from a trade shop, you’d see why you have to charge more:
In this example (and your numbers can greatly vary) come from my experience. I’ve seen tennis bracelet companies sell a diamond tennis bracelet for $495.00 per carat wholesale! That’s the diamonds, gold and labor to set. They just drop it all on the scale. Shucks, you might pay $495.00 for your diamonds and then add in the mounting then the labor and your cost to make it would be twice to three times. So under this ring example it could easily cost you $198.00 more on your own to make it. Part of it is you have to hand carve a ring; the factory has their own already in a rubber mold. They have low cost setting because of either their own speed or many of the companies end the setting overseas. Their cost could be a buck a stone or less. If they doubled their cost you’d be charged $2.00 per stone and you can’t comes close to that, even in house. In fact I’m told over 40% of all jewelry sold in the U.S.A. has the diamonds cast in place, not set by any human! So now that it cost you $198.00 more to make it than buy it, keystone the $198.00 and the keystoned price is $396.00. Add the $396.00 to the “factory ring retail price of $999.00” and you have a price of $1395.00. That’s close enough to the $1350 you were charging. That’s why the custom jobs are worth it to you because you want to make money on all of your cost. Now why is it worth it to your customer? Because after all is said and done, for only $351.00 more she can get a ring that was custom made to fit next to her beautiful $5000.00 engagement ring. Is $351 too much to pay to make a $5000.00 ring look good? I don’t think so! Shucks, the sales tax on the engagement ring (at 7% sales tax) is exactly the same as the extra charge to get the ring made just the way you want it. So stop comparing your workmanship to showcase merchandise. The time spent servicing the customer and making the item just the way the customer wants it warrants the extra charge. And they will pay to get it just the way they want it. Make money the old fashion way. Make a LOT more each and every day doing something people are willing to pay for that they really want…..jewelry custom designed just for them. David S. Geller
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