Are Jewelers Ruining Their Own Image?

This really caught my eye. I was in the car business for 15 years
and recently retired(quite young, I am grateful to say). I must
point out that all the same issues you have identified are
experienced one hundred-fold when you sell cars rather than
jewelry. In fact, "haggling" is far more the rule in the case of
automotive sales than it is in perhaps any field. Part of the
reason is societal: there are certain wares which are to purchased
without questioning their purveyor, and jewelry is one of them.
Another is furniture. Ask yourself whether you haggle when buying a
car. Think back and determine whether you bought at the
lowest-priced dealership rather than from the informative
salesperson who spent hours with you explaining the features of the
vehicle in which you were interested. Lord knows I was abandoned by
customers who would sell me out over 50 dollars on a 25,000 dollar
car. I would like to know the percentage of markup in jewelry, as
it is typically under 10 percent on a vehicle, a profit margin many
find borderline criminal. My question is, do you extend the same
courtesy and ease of doing business when buying a car that you
would appreciate when you are selling jewelry, or do you beat them
up over a fair profit?

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I rarely tell my customers that I'm a Jeweler. I tell them that I
am a Goldsmith. That changes how they listen to me. I rarely if
ever have to deal with a "haggler". At one time a Jeweler actually
jewelled something. Today jewelry retailers call themselves
jewelers. Sometimes they'll have a bench jeweler in the back and
sometimes not. We deal with public perception of who we are and
what we do. I accurately describe who I am and that gives my
customer a confidence based in reality of what they're getting from
me. They are paying for my years of knowledge and my expertise in
craftsmanship and design. Jewelry retailers do not have that
background paradigm from which to project themselves from. They are
relying upon the price value to make their sale. Without some
linguistic determination factor such as 3rd world factory shiney
crap, machine-made metal items, sweat-shop bling, or some other
distinguishing appellation, the big retailers get to call their
items jewelry and sell it on any premise they like and drive the
value into the ground until there are no independent jewelers left.
I remember back in the 70's there being a conversation about what
we could call our jewelry whether it was hand-crafted or
hand-wrought. I don't use either term today because of the beaded
junk craze uses hand-crafted and hand-wrought makes the consumer
tilt their head like a dog listening to humans speak eliciting
images of hammers blasting away, smashing that poor metal into
shape. If I were strictly a retailer, I would seek some way to get
truth in advertising implemented. I don't worry about Wally's
World, my niche doesn't buy there.

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There is a general attitude among the vast populace that retail
jewellers make huge margins on everything they sell, so many
prospective purchasers will "grind" the retailer in order to gain a
sense of victory over this type of heinous greed. Most people have
so little real knowledge of the inside workings of the trade, and
many retailers couldn't convincingly explain why a particular
product costs so much. It just does, get over it. Malls are full of
jewellery stores.Visit five jewellery stores and you'll see the
same stuff. It's all a commodity, sold by the gram, minimal labour
and post-industrial diamonds, and this is what people see...the
very same people who may set foot in your store. Maybe they won't
set foot in your store, as you don't quite appear to be giving it
away yet, no big fluorescent discount signage. They will wait until
your receivers hold a sale on your behalf. The public is cynical,
and who can blame them? What have we done collectively to help them
appreciate jewellery as an artform?

I think this is an unfortunate side effect of the high cost of low
prices promoted by companies like BlueNile and Wal-Mart. Today's
consumers are inundated with merchandise promoted by price point,
not value. For commodity items like pickles and T-shirts which are
consumable or limited life expectancy, the consumer gets what they
pay for. For durable goods like cars and handcrafted jewelry, the
seller has to question the consumer's expectations. "Are you
looking for low price or for good quality?" The idea of consumer
bargaining may be new to the retailer, but it is accepted behavior
in many societies and certainly practiced by the retailer making
purchases from their suppliers.

I couldn't agree more...especially with the last comment that
"Unfortunately this ignorance will eventually kill off the real
quality manufacturers and all that will be left is mass-produced
rubbish." I am a jewelry designer and all of my jewelry is
hand-made with very high quality in mind. Now is one of the most
difficut times in this market, and its very hard to make ends meet.
My work comes with a higher price tag than mass-produced pieces. I
have retailers tell me again and again, "I can't get that kind of
price for this...I know its better quality but my customer
doesn't." I understand that the consumer is not as educated as the
retailer about quality and production, but since the retailer is
the one with face-to-face contact with the consumer, I feel its
part of their responsibility to do this educating. I do it whenever
I can at trunk shows and the like. The consumer will never know if
we don't tell them. And think of all those people buying cheap
mass-produced rubbish that won't last and then bring it in to be
fixed (and it can't be...will bubble or crack or is more expensive
to fix than the whole thing cost to buy). Its like supply and
demand. I see wholesalers dumping merchandise at various trade
shows with cash and carry, and they're dumping it for less than
cost. Retailers are buying it up. This ultimately affects everyone
else. I was selling a well-made sterling silver ring with a nice
quality citrine for around $45 wholesale and some lady came up to
me and asked why it was so expensive at 45 cents a gram. I said it
was $45 and she dropped it on my case and walked away in disgust
explaining she just bought a pair of white gold and diamond
earrings for $14. Seriously...how can any of us make livings if our
peers are dumping product into the market like that? There is a way
to overcome all this...educating the consumer...just as Mercedes
and others have done...but we have to do it TOGETHER.

Shanu, you have started a very interesting debate here. I run a
specialist bespoke jewellery company in London and its no different
here. We pride ourselves on the quality of our products and the
personalised aspect of our service and yet clients still think they
can get all of this at an off-the-peg price. We struggle to make
clients appreciate the difference between readymade and bespoke
(custom made), or hand fabricated as opposed to cast. Most
jewellers will sell at any price as long as they make some profit
however small. I've seen it myself in Hatton Garden, we've had
clients come to us for a consultation where we have prepared
sketches and sourced exceptionally high quality cut stones, for the
client to turn around a few days later and say he 'was offered the
same stone (sic) for a far cheaper price, including the ring'... of
course I try to explain that the diamond is inferior and the ring
mass-produced to no avail usually... its like comparing a mini with
a mercedes, they both have 4 wheels and 2 doors but one oozes
quality and was built to last... People appear less discerning
these days, as long as they are told its 'quality' and the price is
right, they are happy to part with their cash. Unfortunately this
ignorance will eventually kill off the real quality manufacturers
and all that will be left is mass-produced rubbish.

Shanu, I think you hit the nail on the head! Between TV shopping
shows that tout "Regular retail" and "Our Price," department
stores' frequent "50% off" sales (50% off what?), and jewelry
stores that blatantly advertise "any piece you buy is GUARANTEED to
appraise for twice what you paid for it," no wonder consumers think
they're getting ripped off every time they buy a piece of jewelry!!
The reason nobody tries to bargain on a Mercedes-Benz or a pair of
Jimmy Choo shoes is because they know (or assume) in advance that
the answer is going to be "no." I think it's probably easier to
combat the "One Carat Tennis Bracelet--only $99" ads than the
screaming discounts, because people can relate to the concept of a
Hyundai vs. a Benz. Both are cars, and both will get you from point
A to point B, but the experience is vastly different. I think
people can translate that to a cheap tennis bracelet vs. an
expensive one when the jeweler explains it properly. (It helps to
buy a few to have on hand to use as illustration, too...consider it
part of the operations budget!) So yes, I think jewelers have shot
themselves in the foot. I blogged about this in my "backhanded
Compliment" on JCK Voices.