The Huge Mark-Up on Jewelry!

You sound like a bitch.

We are a new independant and are struggling.Our only competiton for
5 counties around is Wally world and a pawn shop. We have tried all
kinds of advert. and though we only markup 3 key at most, people
still baulk at the price. Education is what we are counting on.
Still barely making it. Thank God for repair and dead batteries!Any
advice?

Funny, Shanu thought our price book was overpriced and didn't buy
it, but was offended when a neighbor commented that jewelry is over
priced. Price is perception, isn't it? David Geller
------------------------------------- I ended up telling her about
the new store and of course the conversation led to a bunch of
questions about diamonds—the one conversation I can go on and
on about like many other jewelers. Anyways, while laughing, joking,
and talking about the jewelry industry the one thing that came out
of her mouth without any hesitation was, “Jewelry and
diamonds are so over-priced.” - I like my new neighbor a lot,
but I happened to be very offended by her statement and the fact
that we are becoming friends, fortunately, made it easier for me to
ask why she felt that way. - Why do consumers think jewelry stores
have such huge profit margins? My neighbor said, “First off
Shanu, watch the TV, listen to the radio ads, pay attention to
billboards, at least one jewelry store, (including independents) at
all times is offering some sort of sale. That’s because,
I’m assuming the prices are already marked-up so high that
you all can offer these discounts all the time…which you all
do.”

jacklyn, right now it seems everybody is selling their jewelery to
raise cash. That depresses prices for things bought over the
counter, its simply supply and demand. I can't speak for how well
you bought the stone or how fair those offers were but market
timing has a big influence. Sell your diamond when the public is
again buying diamonds in a big way, not when you have to compete
with the public selling off. Those jewelers likely as not would
have to sit on the stone for quite a while, tieing up their working
capital at a time when cashflow becomes more important.

December 2007 I purchased a .75 carat pendant with appraised value
of $4,900. Yesterday, three jewelers offered to buy it back: price:
$700 - $1,000 And you believe there is no mark-up? Only way to get
the price is insurance fraud which I would never do. This is an
obscene mark-up.

This portion was deleted from my submission above. For 75 years our
store allowed for a 20%-25% discount. The customers loved it and
KNEW they left with a bargain. Our new owner reduced the retail
prices and reduced the mark. Our old customers do not leave with
the same feeling of accomplishment and joy at 10% off. The
experiance has been deflated along with the price. They Liked
Feeling they got a GREAT DEAL!

GREAT DEAL". The feeling that they got something for less, they
"won". Both the men and women loved the entire experiance. And
isn't that what we sell. Oh yeah, and tiny rocks. NOTE: On vacation
I walked into a store and asked the price of a 1ct.H,SI2 dia. The
salesman said "$15,000.00 but we are having a sale today everything
in the store is 50%-65% off." I laughed and left. Somewhere, I
guess is a happy medium. ;

The way around discounting competitors is to not play their game.
Build truly personal relationships with clients who value your
professionalism and service, believe me there are plenty out there.
You can grant them a price accommodation now and then but do it
because they are loyal not because you're afraid of your
competitor. Price wars are losers for small independents. If too
many of your clientele are 'price only' shoppers you need to find
and develop a different clientele. Keep your operating costs such
that you do not feel self-pressured to make every sale on
disadvantageous terms. You'll sleep better too.

I've read your comments but my question still is unanswered "

If you want to save on jewelry then check our
www.directbuylosangeles.com. DirectBuy has a huge assortment but
they do not cary every brand. The selection they do have is great
and you can save quite a bit of money.

I really love how arrogant people are when it comes to jewelery
thinking everything is so marked up. Maybe select stores may be so
and will/have ruined it for the rest of us. People have offended me
at my store plenty of times saying "Im not going to pay that much!
thats marked up way too high" etc and even after I explaine the
rarity of a diamond and rarity of E VS quality and up they still
dont understand. You need to ask yourself this, when you go to the
grocery store and buy milk and a loaf of bread, you think their
pricing that at what they bought it for? NO that wouldnt be cost
effective. This is how bussiness's stay afloat that sell any goods
to consumers. Mark up, key mark up. You never buy anything at cost
unless your buying straight from the producer which only sell to
merchants/retailers. People need to understand mark up is a
necessary evil in today's world and has been thriving since before
they even knew it. My apologies if this comes out harsh, but some
people need to learn an opinion before they make one.

We are jewelers based in Alaska who cater to cruise ship clientele.
It is almost impossible to sell anything out here unless it is
"discounted" because that has become the industry norm. A few good
points made above reagrding brands like Louis Vuitton holding on to
their top dollar price and not discounting do make sense. But they
are a branded item, and so people are paying for the "prestige
factor". The higher price fixing is intentionally done by these
brand name companies to limit the number of people who can actually
buy the product. If everyone could afford one and carried a genuine
LV bag, there would be no prestige in owning one. At the end of the
day a jeweler's reputation will carry them forward. These chain
stores are just mass retailers. They couldn't care if they were
selling underwear or jewelry. It's a commodity to them. We are a
family business and pride is taken in every transaction. After
sales service is as important as the sale itself. That will take a
company to a higher level, both in business and with customer
relations, which will ultimately lead to word of mouth
recommendations.

I am in a small town. I have a jewelery store less than 5 miles
from me. They are constantly running 50-75 off sales. When the
owner needs cash he runs a sale. It never ends. Its a vicous cycle
that will and can never stop because the need for cash flow is
always there. Poor planning and expensive personal life has lead to
this. Stores like that ruin it for all of us. But yet we all do
nothing to stop it. We are all ruining our own reputations each
time we cut our prices drastically!!!! We show the public that they
are right about the "mark up" on jewelery. This is a very tough
business to be in these days. I am a firm believer most of us will
recover from it, but we will lose in the meantime is going to be
the real story. Good luck to everyone and hang on.

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Nectie...You put it a little harsh but I do agree that there is a
difference between a jeweller and a jewelry store owner/manager
that is not actually the person carving, casting, setting, etc. The
store owner and actual jeweller if not the same person should have
a better relationship than it seems you have had in the past. I am
sorry, please seek some professional help for your anger. Now back
to the question of huge markup. The problem is not huge sales or
big discounts. The problem in the jewelry business that needs
fixing is a little thing called appraisals. We justify the high
prices with appraisals which allows high enough markup to show
large discounts. Until we fix our appraisal process so its no
longer a joke every customer that pays $1500 for a ring appraised
at $10500 is going to think something is fishy and dishonest.

you ask.."are jewellers ruining their own image"....NO.....people
calling themselves jewellers are ruining the image of
jewellers.......people like you that by no stretch of the
imagination are a jeweller...people like you that are incompetent
in making quotes for custom pieces in your shop that will turn
around to the jeweller and screw down the price on his hard work in
order to cover a loss.....how are jewellers ruining their own
image?...when they are working hard to make ends meet in an
industry where people like you insist on giving away a product for
much less than its worth....stop calling yourself a
jeweller....you're not a jeweller....go back and tell your friend
that these chain stores that she refers to as jewellers are not
jewellers....then introduce her to a real jeweller, the guy that
studied and worked hard for most his life striving to be the best
possible jeweller he could be....Only to be refered to as a crook
by some people because assholes like you are running around calling
themselves jewellers.

I have been in the business since 1973 so it has been a few years I
go to Las Vegas show every year enjoy it very much Take in as many
seminars as I can and I am quite baffled by our industry I have a
small business with 4 goldsmiths and we do alot of custom work. My
question IS ...I have friends who are business owners in the
Draperies & Blinds. At least twice a year they go on a
wonderful Vacation paid for by the Mfg. re Suppliers. Last year my
friend brought me along to the Atlantis in the Bahamas all expense
trip. Very Posh and expensive!! All paid for.. They are leaving for
Venice June 1st for 2 weeks all expense paid for 2 people. My other
very good friend owns an autobody shop, again goes on these
fabulous trips all expenses paid.car parts.. draperies and
blinds... .Regardless of our volume no one in our province in
Canada has ever said to me OH by the way we have an all expense
trip paid for us to Venice or Europe or Bahamas.. When we go we are
on our own..And people say jewellers make great money...Where??

As was said, old story, new day. We wrote about this over 10 years
ago in JCK. Very little was done then. JVC, state attorney's, even
local "consumer advocates" have done little to nothing to help
correct the problem. The consumer will believe what they want to
believe, unless, we are able to educate them in a way that they
will believe. Small, independents will even believe that the majors
and department stores have put the same price on the jewelry as
they have and will sell "50% to 70% off." Sure, Penney's and Kohl's
have been slapped with fines but you still see the phony discounts
continue. The deception will continue until the penalties are
severe and the lies are exposed to the masses. I had one customer
buy a diamond from Service Merchandise as they were going out of
business and tried to tell me the diamond was worth $5000. When I
held her diamond next to my $4500 diamond, she stated, "I guess I
didn't get a $5000 diamond." We separate ourselves with exceptional
service, higher quality jewelry, fair pricing and are able to show
our customers the differences of our jewelry compared with some of
what's out there. Most are appreciative and will buy. Some will
only want the low price and will accept the lower quality, even
though, they won't admit to the fact that the quality is lower. Our
local farm market has a sign that states, "We don't mind if someone
sells their produce for a lower price. The really know what it's
worth." The quality and service driven stores will succeed. We need
to decide what each of us will do.

Your neighbor has a good point and the industry is digging its own
grave. Jewelry these days is being sold/advertised as fruits in a
fruit market. I consider those types of advertising scams: Retail
price $10,000, Our price $1,000, you save $9,000!. Rarely I see any
Internet website that does not have such kind of huge discounts.
This site fameo.co.uk although not having much of to choose from,
offer one price (maybe they will follow the trend of giving
discounts I don't know). Bottom line, in my opinion, jewelry should
be sold with no discounts and at fair prices. I don't think
Cartier, Van Cleef, Chopard et al will give such discounts to their
jewelry. Unfortunately this is happening because there is too much
junk jewelry out there and the competition is so high that
consumers are confused with prices. I once saw a
retailer/wholesaler advertising a bunch of jewelry in a bowl with a
fork and knife and banner saying: it is so cheap, have it with
catchup. You figure out the rest....

EDUCATION of customers seems to work best for me. As an independent
jeweler, I have taken the time to make my EDGE one of educating my
customers to make smart choices. They appreciate that and price is
never an issue. They know that I offer a fair price...not the
cheapest price in town, but certainly not what the larger chain
stores are charging, even at sale prices. They also know that
apples must be compared with apples. I do agree that, as an
industry, we have hurt ourselves; but I believe we have done so by
making price the focus of attention rather than telling the
customer the story behind the jewelry they love to wear.

In response to: The Huge Mark-Up on Jewelry! Pat: I am a new
retailer and I find this information very useful. I do agree with
all the comments made, and I must say I do get a little nervous
about the business because of this. How can the "little man"
survive with this type of sales/marketing being advertised so
often. Of couse people are going to think our jewelry has a hugh
mark up, people are not crazy. I hope jewelry industry understands
the damage it has done. Thank you

Old discussion....new day. Independant jewelers have been
complaining for years about the 50% off sales etc. usually promoted
by chain and big box retailers. Our industry has done nothing to
curtail this practice. So as a small independant I have to keep
re-inventing myself to compete on this very uneven playing field.
....and so it goes

people in the jewelry business have been ruining their image for a
very long time. we are poor marketers of our product lines, with a
few exceptions such as yurmam. we have few identifiable brands like
leather goods have. most can spot a louis vutton, prada, coach,
dooney & burke, etc bag and immediately know the brand, the
expense and the quality. because of that immediate recognition and
cache that accompanies it, affluent women have no problem spending
upwards of $1000 on a handbag. do you hear them question the markup
in that category? maybe, but certainly not like they do in jewelry.
those companies have taken a long term approach, and invested
considerable time and money in developing the brand recognition. in
our industry, we are dealing with virtually all private label
product that is unrecognizable by the most of the public, again
with few exceptions. since the aforementioned leather goods
companies have developed their brand, they certainly dont want to
damage it by offering promotional sales. they also understand that
once the customer gets conditioned to frequent sales, it does not
take long until they are not buying unless there is a
sale...General Motors has yet to learn this lesson. we as an
industry should learn from what other consumer product industries
have done to increase their profit margins over the years.
afterall, we are competing for the same discretionary income
dollars. has anyone noticed that $250 jeans have been a mainstream
fashion for several years now? we need to recondition your
customers by differentiating from all the low end promotional sale
retailers, offering quality product at a competitive price, and
offering Great Service. Sounds pretty simple, yet not many actually
do it.

I completely agree with Dana Jewellers and with Shanu. Even in
Scottsdale, AZ - EVERYTHING that Dana Marie Jewellers says is true.
Sadly, it seems our clients here won't buy unless they feel they
are 'driving a bargain' and I believe it is because they keep
seeing the sales at all times of the year. I also understand that
it is a competitive business, and that 'sales' are a necessary part
of it, but somehow the consumer needs to understand that the big
chains buy in bulk and therefore are able to reduce their starting
prices, where as we small independents are stuck - because of this
I tend to specialise in coloured stones and unique jewellery from
around the world, but when my customer sees a beautiful blue ceylon
sapphire, they immediately think of "their friend in the sapphire
business" or a.n.other and feel that my prices are overly inflated.
But what can we do about it? IF I am lucky enough for an 'educated
buyer' to come in, then its an easy sell, as they are familiar with
quality and price, but the average member of the public is just
bombarded with the wrong idea. YES, WE ARE RUINING OUR OWN IMAGES.

I have customers coming in all the time or emailing me from my ebay
store(I had one just this morning) asking me what are you willing
take for this piece. I am sure you can do better than that. What is
the botom line? This drives me crazy. I do not have a lot of sales,
my prices in my store and online are what sale prices would be all
year. During the holidays, I will have a sale, and that is usually
it and I only offer maybe 10-20% off at most. When customers ask me
I tell them, that I don't run sales because my prices are already
where they need to be all year round. They question me all the
time, why do you do that? How can you compete with the Jared's and
Kays and so on, when they have sales literally every month and for
every holiday? I tell them, I am competing with them, but I don't
have to have a sale all the time to do it. I tell them, my prices
and styles are very competitive and the reason I do not have sales
is because I don't want you to think of my store, the same way you
think of all of them and that usually gets them thinking. I sell
very lean as it is and probably 90% of my customers ask me about
sales and try to negotiate on pricing and that drives me crazy. YES
WE ARE RUINING OUR OWN IMAGES! Common sense is how can a store run
a 50-75% off sale? Common sense answer, they mark their prices up
to still get what they want and make it seem like a deal. I like
the way I do business and I usually close on average 98.5% of my
sales, and the ones who leave usually come back after shopping
those "sales" and that makes my selling around 100%. I tell my
customers to go and compare prices and pieces and quality. I even
tell them what the color and clarity and grade of the diamonds and
gemstones are so they know what they are comparing. I have nothing
to hide and I want them to know and know what to ask and I and more
importantly, the customer wins in the end!