Jewelers retail businesses are experiencing a significant shift. This shift can be attributed to the millennial generation, which is more internet-savvy and often favors the cheapest price over loyalty to a local store. According to Peter Gasca, author of Millennials Are Changing Retailing – What Jewelers Need to Know
A jeweler’s ideal customer is a couple who can afford to spend a significant amount of money on the jewelry. The customer pays a set price for the jewelry, including the price of gemstones and metal. The cost of labor to make the piece, including any markup, is factored into the price, so that the consumer pays only the amount that they are willing to pay. Small jewelers typically accept credit or cash. For more expensive pieces, the jeweler often arranges special financing in-house.
Price transparency is also important. By displaying prices on items, retailers can reduce the number of browsers who are merely browsing. Price transparency builds trust with the customer. To ensure that customers can afford the jewelry, Johnson suggests putting prices on half of the pieces. It is also a good idea to choose items that have a high bling factor and a high “look” for the price. Consumers can also look for payment plans with monthly installments, if necessary.
The US jewelry retail industry includes over 21,300 establishments, with a combined revenue of $30 billion. The profitability of the industry is largely dependent on marketing and merchandising, though large companies have advantages of scale in purchasing. Smaller jewelers can compete with large chains by establishing a good reputation. The 50 largest jewelers in the US are responsible for almost half of the industry’s sales. By 2025, the industry is expected to reach $292 billion in revenue.
Custom design requires skill and creativity. Because custom designs can be so unique, jewelers often sketch out a design and then get the customer’s approval before starting the work. Software programs help jewelers create pictures of their designs so that customers can easily visualize what they will receive. The most creative jewelers will also offer repair services. They also offer custom designs and remodel services through their jewelry designers, branded as Designlab. This allows customers to pick the perfect jewelry for their loved ones.
Price fluctuation affects precious metal prices. Jewellers should react to these changes but not overreact to them. They should only change prices when the price of gold or silver has changed significantly over a medium period. Moreover, jewellers have other responsibilities that should be kept in mind. However, price fluctuations can have a profound impact on their business. A good retailer must consider all of these factors when making a pricing decision.
Another important consideration is the style of jewelry. It is important to remember that the price of a precious metal piece is usually around two to three times its wholesale price. The retail price is often higher if it is a luxury brand. However, diamonds have no manufacturer’s suggested retail price, so a buyer must know how much precious metal is in a particular piece of jewelry. It is also important to consider the wholesaler’s markup. Most jewelry stores will mark up their precious metal pieces by two to three times the wholesale price.