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Why You Shouldn't Hate Custom Design

After reading many of the responses I’ve seen a common theme here. The people who dislike custom have 3 main reasons why they don’t like doing custom work. They may have a single reason why they hate it and some (they may not know it) have more than one.

  1. You don’t have the skills to do custom.
  2. You don’t have the patience or selling skills to take in custom work.
  3. You under price it and there fore once you know in your mind “OMG! From this minute on I’m now losing money or working for free or working for a really small per hour wage” you then, I hate this”.
SKILLS:
The only things you can do to alleviate this is:

  1. a. Take classes and learn the areas of custom you need complete your skill set.
  2. b. Hire others who have skills you don’t (I did this as I’m not a good wax carver).
  3. c. Job out the work to others who can do the things you can’t do. There is absolutely no reason to want to say “Oh, we don’t send anything out, it’s all done in house.” That’s silly. The customer has said “I want what I want”. So your job is “Get’r done”.
PATIENCE or SELLING SKILLS

This is something typically in your dna. Bench people “typically” are not good sales people. Have friends, family, co-workers critique you honestly. What is honestly? I’ve read many threads here about how you sell, what you say or why you tell a custom customer what you need to do the job. Mostly what I’ve read was “me, me, me”. You mention price as if it’s the main reason customers shop and its not number.

Showcase closing ratios are about 30-40% while custom closing ratios are easily double that. Why? Because people buying custom are as passionate about BUYING it as you are about selling it.

Have your friends, family and others tell you after listening to you sell if THEY WOULD BUY FROM YOU. Does what you say sound stand offish? Does what you say entice them to buy?

I taught my staff to sell after learning proper technique from Harry Friedman. Go to his website and buy “No Thanks, I’m just looking.” I adapted it easily for custom and repairs:

www.thefriedmangroup.com/no_thanks.htm


In addition I have read “Hey, we charge $75 an hour and it will take ME 4 hours.” First off repairs bring in over $100 an hour so $75 an hour to do more difficult work is insane. Why do you folks charge so little? Because you just can’t come to the point to say these 3 little life changing words:

One Hundred Dollars.

Mentioning price should be a “whisper” to the customers ears, not a shout. That’s a shout.

It could also be you should have someone else sell it and you stay at the bench.


PRICING:

Almost anything is worth doing in our industry if it pays well. Most of you know the ONE THING that would make being a jeweler a truly wonderful event:


IF YOU COULD DOUBLE YOUR SALARY

Our motto was:

“The only two things we can’t fix is a broken heart and the crack of dawn”

If we fixed or MADE something it had these 3 criteria’s:
  1. It HAD to be priced where we’d make a profit and it had to be the same percentage profit margin or hourly rate no matter if it was gold, silver or platinum.
  2. The customer knew what it would look like at pickup.
  3. If it was non guarantee able they would be informed about this up front.
The part about had to be priced at the same hourly rate was simple. We paid all 5 jewelers on a 100% commission basis. They demanded (rightfully so) that a silver job or platinum job pay them their same hourly rate (on the average) no matter what. They didn’t want to get job “A” and get paid $25 for an hour and get job “B” that pays $16 an hour just because I didn’t have the courage to charge correctly.

When I went to our commission system it completely reversed our company’s poor cash position because commission guaranteed the COMPANY a profit. But then I had to start thinking about paying the jewelers correctly. Having them quit was devastating for the company.

So I stared thinking of my jeweler’s welfare FIRST when I priced jobs and also when I made our price book! If they were paid well and fairly then the company ALWAYS made money. Always.

It didn’t run off customers. Having more money come in allowed us to:
  1. Have a nicer place. Customers are impressed with a nicer place. They felt confident.
  2. Hire better people, both in the shop and on the sales floor. Better paid people are smarter. Sorry it’s true. You can have Sally paid $12 an hour and she’s a bump on the log. Give her a substantial raise PLUS add in training and the same bump is a rock star.
  3. Make’s doing grunt custom and repairs easier to swallow because you’re making good/great money.

NOW THE STORY I LEARNED FROM MY 90 YEAR OLD UNCLE THIS WEEKEND:

This past weekend my Uncle turned 90. At the luncheon for 45 people his children gave a “This is your life” story. After marrying my Aunt here in Atlanta 1951 they decided as a couple that they wanted to be together for the rest of their lives and so they were going to open a business together. They’d be their own boss and be able to be with each other every day.

They were going to open a coin operated Laundromat. Big demand at that in the 1950’s, many folks didn’t have the washing machines we take for granted today.

My aunt’s father escaped the Nazi’s and left behind a very lucrative business in Europe that spanned many countries. He knew how to make money and sat my aunt and uncle down and said these important words:

“Do not make a life for yourself and your children counting coins. Get into a business where your average sale is much higher.”

So they decided to sell wholesale costume/fashion jewelry and accessories. They traveled the world buying these things and had many salesmen on the road selling. I had 3 Uncles, now down to one. This aunt and uncle were definitely the most successful in terms of money and family. They always took 2 trips a year and traveled all over the world.

End thought?

Custom design has a MUCH higher average sale as well as a much higher closing ratio.

Custom has these money making points:
  1. Higher average sale. Easily double to quadruple that of showcase sales. Typical sales from the showcase is $150 to $400 while custom is $700 to $3000 60% of the time.
  2. Higher closing ratio than showcase sales by double to triple, although a little less than repairs. Showcase closing ratios typically are 30-40%; custom is 65-80% while repairs are 90%.
  3. All of this means making a lot more money with fewer HOURS and many times less PEOPLE to bring in the same dollars as repairs.
  4. It also takes much less investment in inventory as most custom jobs work like the card companies “Just in time” material shipping. Custom inventory for a store can be $5000 - $25,000. Typical inventory investment for the showcase is hundreds of thousands of dollars, many cases millions of dollars for many stores I visit.
Embrace what will “set you free”.

David Geller
Director of Profit

www.JewelerProfit.com
 
 
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