Making Killer Money From The Shop in Repairs & Custom Design · Making Killer Money From The Shop in Repairs & Custom Design Getting the staff to buy into it Scheduling Jobs How to

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

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

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.

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

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?”

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.

What you charge?

• 14kt yellow gold 2mm wide engagement ring with wg head, 1 carat diamond. How much to make it smaller?

50

What you charge?

• How much to replace the 6 prong solitaire white gold head in her shank and reset her 1 carat diamond?

274

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)

Your job?

Your job Is NOT to have this on your tombstone:

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.

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.

Fretting

Let’s look at Repair sales:

• Average Sale = $65-$100

• Inventory Level = $3000-$5000 + one weeksjewelers wages


Fretting

Let’s look at Custom Design sales:


• Most items ordered for a custom job are order “JIT”.


• But what is the average dollar sale?

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

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

Pricing parts are easy, Labor….

• Labor is tougher for one reason:


• Jewelers are BIG


• Jewelers are BIGFAT


• Jewelers are BIGFAT

LIARS!!!


• 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.

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.

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.

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

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.

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!!!!

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.

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?

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”

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

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……

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!

Increasing your average sale & getting money for check & tighten-How Much?

How many repairs in a year?(we did 8800 envelopesDo you get car A or B?)

Free New Car For what you’ve been doing anyway• Who here has the most jobs done in a year? (calculator)

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!

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.

Selling Repairs

• Geller Blue Book Training:Password: geller

• Each chapter on video

• www.jewelerprofit.com/trainingvideos.html

http://www.jewelerprofit.com/trainingvideos.html

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”

How much is a watch battery?

Have anything to do withthe US Mint?

A battery could have been $9.00

• If only they had minted one

Give 2 choices on batteries1 year guarantee5 year guarantee

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?


• 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


• Custom Design



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.

Gemstone & Custom private Parties

• Chris & Lois Wacholtz of Christopher’s Fine Jewelry has gemstone parties (JCK magazine & Instore MagazineFebruary 2013)

Give away gems to get more Custom Sales

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.

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.

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)

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

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)

“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!

As you enter Green Lake

A mill running constantly at front door

More Green lake

Shop Area, seen by customers

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.

Advertising & Marketing The Shop

• Show before and after pictures on your counter, direct mail, website, facebook/twitter/pinterest

• Suggestion on “Being Social”

Show before & after pictures everywhere

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.

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.

Text Updates

• “Hi James, started your new ring today. Will have something to show in a few days”

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/

Text Updates

• “Hi James, Melvin is just now poured the gold into your wax mold, here’s the unfinished piece”

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.”

Text Updates

• “Hi James, we polished the ring this morning and ready when you are to pick up Sallie’s beautiful ring.”

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!”

Want to see a great “how we do it?” video on a website?These pictures were taken from

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

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!)

==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

• 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

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”


• 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.


• 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”


• Ran reports of things at trade shops that we expect back1. watch maker2. Waxer3. Stone Cutter


• 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.

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!

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!

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)

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.

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.

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.”

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.

Day of Week Stickers

• Search Amazon

• $25.00

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

http://www.isiprint.com/

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”.

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

Shop Profits/QuickBooks

• SALES FOR SHOPJewelry Repair SalesWatch Repair & Battery SalesCustom Design Sales


• COST OF GOODS FOR THE SHO:

Jewelers PayJewelers taxes & benefitsFindings/Mtgs/Stones/GoldOutside Trade ShopsWatchmaker CostsLaser Lease


• 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)

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!

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”

http://www.jewelerprofit.com/Products/GellerBook5_0.html

All slides can be downloaded atwww.jewelerprofit.com/midwest-jewelers.html

https://www.jewelerprofit.com/midwest-jewelers.html

Thank You!

• Thank you!

• If I can help you with your shop profits or QuickBooks contact me:David Geller || (404) 255-9565

[email protected]:

[email protected]

mailto:[email protected]

mailto:[email protected]

Documents

Making Killer Money From The Shop in Repairs & Custom Design · Making Killer Money From The Shop in Repairs & Custom Design Getting the staff to buy into it Scheduling Jobs How to