making killer money from the shop in repairs & custom design · making killer money from the...
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Making Killer Money From The Shop in Repairs & Custom
Design
Getting the staff to buy into itScheduling Jobs
How to REALLY see if the shop is profitable
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All slides are onmy website www.JewelerProfit.com
On left click on
“Midwest Jewelers”
PDF files are below, just
click, open and print if you
like
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Three Profit centers in a store
• 1. Sale of inventory (this one area is the biggest reason for debt in a store. There is a difference between MAKING money and HAVING money)
• 2. Buying/selling scrap gold. Easy money.
• 3. SHOP SALES. Repairs || Custom Design
Stores in America heavy in shop & custom are thriving.That’s our topic today.
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The Shop
1. How to figure your prices
2. How to get the staff to charge & buy into the prices
3. Customers concerns on price, how to address them
4. How to tell if the shop is profitable
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How to figure your prices
• Repairs: Repairs are not price sensitive they are TRUSTsensitive.
• Closing ratio tells the story:Product: 10 people walk in, how many out of 10 actually
buy?
Repairs: 10 people walk in, how many out of 10 say “OK, go ahead and fix it?”
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Quick fretting!
• Repairs have a 3-4 time greater closing ratio than product and you never fret over a “be-back” on product.
• Typical store in USA has a 90%+ closing ratio on repairs. No matter what you charge.
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What you charge?
• 14kt yellow gold 2mm wide engagement ring with wg head, 1 carat diamond. How much to make it smaller?
50
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What you charge?
• How much to replace the 6 prong solitaire white gold head in her shank and reset her 1 carat diamond?
274
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Charge?
• For the most part whatever number falls out of your mouth when the customer says “how much to fix this?” 90% of them will say OK.
($1 a day)
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Your job?
Your job Is NOT to have this on your tombstone:
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Your job?
• To do quality workmanship
• Deliver as promised
• Guarantee your work
• Pay your people well and fairly
• Run an efficient organization
• Double your total shop costs as shop income.
• Best way to see shop profits is in QuickBooks, not your POS program.
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OK, so where should I fret?
Let’s look at inventory sales:
• Average Sale = $400
• Inventory Level = $250,000 to several millions.
• Closing Ratio = 33-40%
• 3 people buy, 7 people leave and leave you with $$$’s of unsold & aged inventory.
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Fretting
Let’s look at Repair sales:
• Average Sale = $65-$100
• Inventory Level = $3000-$5000 + one weeksjewelers wages
• Closing Ratio = 90-95%
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Fretting
Let’s look at Custom Design sales:
• Inventory Level = $3000-$5000 + one weeksjewelers wages
• Most items ordered for a custom job are order “JIT”.
• Closing Ratio = 70-85%
• But what is the average dollar sale?
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Average Custom Design Sale
• WHAT IS YOUR AVERAGE CUSTOM DESIGN SALE?
• $100 - $750 8.50%
• $751 - $1000 22.50%
• $1000 - $2000 39.40%
• $2001 - $3000 20.20%
• $3001 - $4000 5.60%
• Over $4001 3.80%
Look!82% of the time theAverage sale is easily$751 to $3000!With a 70-85%Closing ratio
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Now that I have given you confidence…………
• How to price the shop
• Same way I have done in my price book
• 3 time markup on findings/parts/gold/small stones.
• 4 time markup on jewelers wages. Ends up giving you a 3 timemarkup. Mine=$40 to mid $50’s a year
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Pricing parts are easy, Labor….
• Labor is tougher for one reason:
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Pricing parts are easy, Labor….
• Jewelers are BIG
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Pricing parts are easy, Labor….
• Jewelers are BIGFAT
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Pricing parts are easy, Labor….
• Jewelers are BIGFAT
LIARS!!!
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Pricing parts are easy, Labor….
• Why?
In an 8 hour day they only work 5.5 hours.
*Answering questions*Assisting customers*Bathroom breaks*Breaks*Talking/texting/internet/looking out the window.
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1985 was not a good year
• All jewelers were paid an hourly wage
• We called around to see what others were charging
• Didn’t train the sales staff well and paid hourly plus a WHOPPING 1% commission.
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Accountant/Watchmaker
• Paid jewelers percentage of labor - % of sales - (you don’t have too).
• Time study with time clocks from Office Depot. What I found out was
• Jewelers are big, fat, liars on time.
• Must add 25% to their time
• Must add 25% or more to their gross pay for taxes & benefits.
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Example: Labor Work
• Paying $15 an hour. Takes 1 hour so with a 3 time markup:$15 x 3 = $45 retail charge
• But reality is…………..
• Must add Fica/Medicare/Unemployment/health insurance we pay/vacation pay/sick pay to gross pay. Another 25%=$18.75 an hour
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Example: Labor Work
• So now our labor cost is really $18.75 an hour.
• But a 1 hour job takes 1.25 hours:
• $18.75 x 1.25 hours = TRUE COST of $23.43 (not $15).
• 3 time markup on $23.43 = retail of $70.00.
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Example: Labor Work
• We were charging $45. Should have charged $70.
• That’s a 35% difference in price & profits.
• We fixed it with our price book.
• Kick in the pants: after raising prices substantially and coming out of debtSAME CLOSING RATIO!!!!
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Net result of charging
• 4 time markup on jewelers pay. Add 25% more to the time guestimate.
• Parts=3 time markup.
• Or round up to 5 times jewelers pay times what they tell you in time.
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Net result of charging
• Never ask a jeweler how much to charge. Ask them how long it will take.
• Markup a jeweler just like they were merchandise.
• Actually same markup as product but with an additional 5 points. Why?
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Getting the staff to embrace & sell repairs
• Training
• Role playing
• Pay’m! Spiff for good jobs ($100)
• Pay’m as though it was product they sold
• Pay’m as if the store depends on it! (Hey, it does!)
• Play “Pass the Buck”
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How to get the staff to charge & buy into the pricesTRAINING
• Ongoing, consistent training.
• Divide an hour long meeting into 4 quadrants:15 minutes on the shop, follow my book as a syllabus.15 minutes on product knowledge15 minutes on selling15 minutes on store news
0 minutes on complaining
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Selling Repairs
• Explain how the work is done (Schlitz Beer-Claude Hopkins)
• Never say “Well that’s our price lady!”
• Show them their repairs needed with either a loupe or better yet on a monitor……
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Increase your average sale
• Point to the price and be quiet.
• Charge for check & tighten
• Rhodium plating is not free!
• Quote line by line if possible, never one big number.
• How to pay for a new car from one line item!
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Increasing your average sale & getting money for check & tighten-How Much?
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How many repairs in a year?(we did 8800 envelopesDo you get car A or B?)
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Free New Car For what you’ve been doing anyway• Who here has the most jobs done in a year? (calculator)
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Selling Repairs
• Role play just like our soldiers do
• Reward great achievement
• Pay Commissions
• Play games
• “Pass The Buck”
• Repairs are just as important as product sales. We don’t CLERK REPAIRS. At a 3 time markup it deserves better!
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Selling Repairs
• Ask your jeweler these 3 questions1. How long have you been a jeweler?2. How long have you worked here?3. What’s the most expensive piece of
jewelry you’ve ever worked on before?
• Use this new ammunition in your sales presentation.
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Selling Repairs
• Geller Blue Book Training:Password: geller
• Each chapter on video
• www.jewelerprofit.com/trainingvideos.html
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Selling Repairs
• Quit thinking people will not pay higher prices, they will. Its all over the NEWS!
• Test for a week, you’ll see.
• Give spiffs to sales staff for making bigger repair sales.
• Offer “Express Service” at 50% higher.
• Next week play “Pass The Buck”
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How much is a watch battery?
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Have anything to do withthe US Mint?
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A battery could have been $9.00
• If only they had minted one
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Give 2 choices on batteries1 year guarantee5 year guarantee
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Making a ton of money from Custom
• Not all gold has been melted. ☺
• As baby boomers age their children will inherit a ton of stuff.
• There will be a boom in remaking mom’s old stuff.
• It takes training on the sales floor and in the shop.
• Is it worth it?
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Making a ton of money from Custom
• WHAT IS YOUR AVERAGE CUSTOM DESIGN SALE?
• $100 - $750 8.50%
• $751 - $1000 22.50%
• $1000 - $2000 39.40%
• $2001 - $3000 20.20%
• $3001 - $4000 5.60%
• Over $4001 3.80%
Look!82% of the time theAverage sale is easily$751 to $3000!With a 70-85%Closing ratio
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Making a ton of money from Custom
• Custom Design
• Inventory Level = $3000-$5000 + one weeksjewelers wages
• Closing Ratio = 70-85%
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Custom Design makes Serious Money
• Takes more expertise from the staff.
• Some stores delegate 1 person to designing.
• Sell the uniqueness of the piece and it will be made one ring at a time just for you.
• Never allow the conversation to wander “why is it more than the ring in the showcase”. Custom costs more and is worth it.
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Gemstone & Custom private Parties
• Chris & Lois Wacholtz of Christopher’s Fine Jewelry has gemstone parties (JCK magazine & Instore MagazineFebruary 2013)
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Give away gems to get more Custom Sales
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Custom Take In
• Non refundable design fee but goes toward purchase within 6 months.
• Picture is on file.
• Don’t have an attitude. “Custom” is whatever the customer wants. From Cad/cam; a wax; order a semi-mount or order a shank and 8 heads. It’s what the customer wants.
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How to sell price
• Custom can have sticker shock but it usually comes from the staff (gulp) not always the customer.
• Sell as if you do this everyday for every customer.
• Design as the customer wants and is happy but always make a suggestion of something to enhance it.
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Upselling Custom
• Going from 14kt yellow to 18kt (prettier yellow). You can upgrade their gold.
• 14kt white gold to 18kt white gold or platinum.
• Platinum areas for setting.
• Adding additional stones or a major stone.
• Fancy engraving on the shank or sides.
• Make a signature of it (diamond or sq shank)
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Price Resistance
• Use a legal pad, draw and 2 columns.
• Write out the major charges in two columns:
• Labor & Material
• Don’t over complicate labor.
• No customer has ever bought a wax.
• NO!! Design/carve/cast/finish/assemble
• YES! Make ring/set stones/5 dwts gold
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Showing the price to the customer
LABOR MATERIALMake ring from design $750 6 dwts 18kt@$197=$1182
Bead set 24 dias @ $25=$600 3 extra dias needed, $225
Bezel set center sapphire $200
TOTAL LABOR: $1550 TOTAL MATERIAL: $1407
$2957(3 ways to say the price)
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“As You Know”
TOTAL LABOR: $1550 TOTAL MATERIAL: $1407
$2957 Total
20% of $2957 = $591 given away
But 20% of the material = $281
You get $309 more
Like actually a 9% discount.
Material for making custom has a turn of 12 to 24!
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As you enter Green Lake
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A mill running constantly at front door
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More Green lake
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Shop Area, seen by customers
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Green Lake Jewelry-Seattle
• One of the biggest jewelry designers in US.
• Has over 15 copies of Gemvision
• Trains his own designers.
• Many jewelers at many benches, all in view of the customers.
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Advertising & Marketing The Shop
• Show before and after pictures on your counter, direct mail, website, facebook/twitter/pinterest
• Suggestion on “Being Social”
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Show before & after pictures everywhere
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Being Social=Get more Custom Business
• Millennials as well as baby boomers have smart phones and they text.
• Sending out emails? You’re considered awesome if only 30% are opened.
• Send a text? Almost 100% of them are opened.
• Here’s David’s suggestions to increase custom sales & customer satisfaction at no cost.
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Being Social=Get more Custom Business
• Get customer’s cell number to send updates
• Send TEXT updates with pictures, even movies as you proceed thru the process.
• You can have on file MANY stock pictures and videos to text to everyone.
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Text Updates
• “Hi James, started your new ring today. Will have something to show in a few days”
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Text Updates
• “Hi James, we have made the wax of your ring to make it into white gold”
All pictures from: http://christopherduquet.com/custom-jewelry/custom-design-process/
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Text Updates
• “Hi James, Melvin is just now poured the gold into your wax mold, here’s the unfinished piece”
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Text Updates
• “Hi James, Carl, our #1 master jeweler is finishing up the ring and setting the diamonds, should be ready in a few more days.”
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Text Updates
• “Hi James, we polished the ring this morning and ready when you are to pick up Sallie’s beautiful ring.”
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Text Updates
• Don’t you think James will make the process and your store name go viral? You bet your Facebook it will!
• “Look what Acme Jewelers has done for me so far!”
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Want to see a great “how we do it?” video on a website?These pictures were taken from
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Want to do custom and get more young customers?• Stargems.com
• Links your social media sites with customers on their phones.
• Connect and sell them via text messaging.
• His factory does great work and will sell the designs for you
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Want to do custom and get more young customers?• Stargems.com 770-394-6727
• Instore Design Studio
• Great work and great
pricing
Made a beautiful ring
for Renie. (I know!)
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==Promise Dates For Shop Work==
• Computer Program, run report for departments. Edge & Jewelry Shopkeeper do great in this area.
• Signage
• Calendar deskpad-5.5 hours a day
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• All repairs will be ready on
• All watch repair estimates will be ready on
• All wax views will be ready on
• All approved models/waxes will be completed on
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Daily running reports for Jewelers
• Asked every day“what jobs does each jeweler have due in the next 3 days?”
• Gave me list back in 30 minutes. If not going to be ready, gave toanother jeweler or staff to call and put customer off. THAT ENVELOPEgot a red sticker “no more lateness”
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Daily running reports for Jewelers
• Ran reports bi-weekly of items in ORDER BOX of jobs waiting for parts. Office staff kept the report up and called vendors “where is my stuff?
• Kept customer apprised, changed promise dates.
• On envelope in program kept NOTES of all of this; anyone could look it up.
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Daily running reports for Jewelers
• Weekly ran reports from hold box, gave to sales staff to call“Mrs Smith don’t forget your wax is ready to view”or“The diamonds you wanted to see are here”
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Daily running reports for Jewelers
• Ran reports of things at trade shops that we expect back1. watch maker2. Waxer3. Stone Cutter
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Daily running reports for Jewelers
• Worse thing that can happen is a customer to say“Hi, I drove all the way from the mall to get here. Did you know my job promised for today is not ready?”
• When you have 450 jobs in house on any given day a computer program is only way to keep track.
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How many jobs should a jeweler do in a day?
Wrong question.
• At mid $40 to high $50’s a year a jewelers BENCH should produce $180,000 to $250,000 a year!
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Productivity
• If you have a highly compensated jeweler they should produce in dollars for repairs and most custom work $250,000 a year. That’s equivalent to 50 weeks a year at about $1,000.00 a day.
• Jewelers should be uninterrupted about 80% of the day.
• Should produce about $750 to $1000 in job envelope retail dollars.
• Its not envelopes, its DOLLARS!
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Productivity
• My father taught me 2 things:1. Bead/pave setting2. Efficiency
• He and I always had a separate person to do the jewelers polishing.
• From my first day Aug 1974 first employee was a high school student to polish my work. Same when I had 5 jewelers. They didn’t polish (maybe emeralds)
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Productivity
• A jeweler in my book should produce $100 to $125 an hour. If they polish the ring they sized, being you didn’t charge EXTRA to polish, for ever hour she polishes you lose $100 of income.
• If you hire a high school student part time at $10 an hour, then theNET income from the jeweler is $90 an hour.
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Productivity Planning out the day
• One store I visited used a desk pad calendar.
• Shop foreman figured how many hours it would take, wrote on NEXT available day job envelope # and number of hours.
• When he reached just 5.5 hours per
• jeweler per day, they scratched out
• the day and the next available day
• was the only day that could be promised.
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Productivity Planning out the day
• One shop just figured out how much they should do and gave arubber banded pack of envelopes to each jeweler and said
“Can’t go home until these jobs are finished.”
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Productivity
• Jewelers are human, they look at 27 envelopes and say “well, all I can do is what I can do”
• We in addition put “days of the week stickers” on top left of each envelope. They’d look at “Blue Monday” and >”hey just these 8 jobs-OK!<
• Easy for shop foreman to take a peak in the job box for color.
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Day of Week Stickers
• Search Amazon
• $25.00
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While you wait
• Express Service 50% higher prices
• 40% closing ratio
• www.isiprint.com; While U Wait
Pink Colored Job Envelopes. Easy to see
*Repair*Eye glass repair*Appraisal*Anything else
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Is the shop making money?
• Unless you pay 100% commission to jewelers, they are “big/fat/liars”
• QuickBooks or your accounting program is only way to see shop profits.
• Profits are look at end of month, not per job.
• Shop sales should be double shop costs (keystone). Can’t resell “returns”.
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QuickBooks setup
• 3 Income & COG’s groupings
• INCOME/SALES
Product SalesScrap Gold Checks from RefinerShop Sales
• COST OF GOODSProduct Cost of goods (what sold!)Checks to customers to buy their scrapShop Costs
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Shop Profits/QuickBooks
• SALES FOR SHOPJewelry Repair SalesWatch Repair & Battery SalesCustom Design Sales
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Shop Profits/QuickBooks
• COST OF GOODS FOR THE SHO:
Jewelers PayJewelers taxes & benefitsFindings/Mtgs/Stones/GoldOutside Trade ShopsWatchmaker CostsLaser Lease
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Shop Profits/QuickBooks
• This method allows for mistakes and wasted time to be taken into consideration.
• Shop profits should compete with showroom profits as a percentage PLUS 5 more points (redo’s/mistakes)
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Shop Profits Easily Visible
• SHOP SALESJewelry Repair $5632
Custom Design $5800
Watch Repair & Batteries $742Total Shop Sales……………. $12,174.00
SHOP COST OF GOODSJewelers Wages $3200Jewelers Taxes $229Findings/Mtgs/Gold/Stones $1852
Shop Supplies $256
Watch Repair $198Total Shop Costs…………… $5,506.00
SHOP PROFITS $6668.00 54.7% Margin!
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Georgia Jewelers Special For the Geller Repair Book. New Release 6.20
• 328 Price Book || 4 page Counter Mat For Quick Repairs Video Training on our Website For The Staff
• Regular kit price $399 Special Price Until March 30th
2019 15% off = $339.15• http://www.jewelerprofit.com/Products/GellerBook5_0.html
• Discount Code= “facebook jeweler”
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All slides can be downloaded atwww.jewelerprofit.com/midwest-jewelers.html
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Thank You!
• Thank you!
• If I can help you with your shop profits or QuickBooks contact me:David Geller || (404) 255-9565