Radiant Cut Diamond Ring, Retail vs "Value Added"???
Q.Just had to share an experience I had today with a customer... We do the work for a great number of retail stores and I have this customer who owns a three store chain who personally brings in the work, so we can go over it carefully and talk about what would be for the best... He told me a story that I think summs up nicely what "retail" is all about.. Here goes... So, he goes to the Tuscon gem show and buys products for his stores each year, always looking for a knock out stone to make a "window dressing" piece when he returns from the show. He was cruizin' the tables and he noticed that there was an opal dealer with some really stunning material (cut stones) which he thought would very nicely do the job for his stunning creation... The stone was priced at $500 but he decided to try and screw the guy down so he made his pitch...
A."I have a growing jewelry chain" he chimed, treat me right and I'll buy thousands of dollars worth of product from you in the coming months" he says, "but I ain't gonna start relations with you buying that stone for $500 'cause it's really only worth $300... The dealer blustered about and sayed that the price was more than fair at $500, and the price stood... After two days of beating this wholesaler up he finally got that stone for $400.00 (with no intention of really ever buying anything else)... "I need to see what I'm getting" the store owner said, "but I do what I need to do, or say what I need to say, to get the best price". So, this chap gets back to the store and two days later a customer walks in ad says "I'd like to find a nice opal"... (The guy's eyes lit up as he got to this part of the story) "so I says, I have a wonderful opal I just got in Tuscon, that I hand picked from thousands of stones, but it ain't cheap"... "I need $1,200 for the stone, but I'm not sure I want to sell it it's so fine". Well, she says that she'd like to see the stone and he shows it too her, murmuring of the ultra fine colors and shimmering qualities of precious opal... She finally said "I'll take it" and so now we''re designing a ring... My question to any retailer would be this, what value is actually added for the dramatic mark-ups anyway? Is it guaranteeing the work? The shops actually do that function, with the stores really assuming no responsibility at all for nearly anything... Is it the nice two inch carpet or halogen lights that command the "value added"??? If so, shouldn't the customer be given a case of bulbs because they are paying such a premium? Where's the sanity in this business anyway... Now stores try to "creatively" find the cheapest way to do anything, with little regard for quality due to markup pressures. I've seen corporate letters (from Dallas) setting 380% as the new standard for a certian corporation who's name shall remain namelezz. OOps :) Too many "Z's" I guess... Go figure... In the good old days the stores worked on a 200% markup for goods and products. I've published a "Keystone" pricelist since 1975 for our customers, but now then they wanted a 250% a few years back so I did that too. Some chains now are at 300% and so far I've refused to republish a three time version, stating that I just don't have one on the computer... As a shop owner who cares about products, and my customer's reputations more than they do appearantly, I just wonder what sort of service or value added that retail store owners feel they provide for their customers... The store owner I spoke of is not unique, he's one of the hundreds of thousands of traditional retailer in this industry. I can't imagine what he thought I'd think when he told me his "killer story" about that opal... We'll do a half-shank for him for $45 (and spend $35 doing it) only for him to charge $120.00 for wrapping it in a nice little box and deliver it... How cool can that box really be?!?! Why not go out and open a retail store yourself? You ought to be able to blow the competition away with your low prices. Seriously, Ray. You could underprice them all. Would that be enough, though? Another thought. What would happen if you got yourself a place in the local mall and set up a direct repair shop? Call it Rays Wholesale Jewelry Repair. Hey, bypass the retailer. Go direct. Let the customer watch the diamond being set with their own eyes. You could make a killing, couldnt you? Seriously, Ray, could that be the answer to your question about value added. Your work is the real value in the transaction. So why not cash in on it.
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