Jewelry Industry Pricing Controversy

This is a written editorial on the controversy surrounding pricing within the jewelry industry.

There are several new groups emerging on the scene in the Jewelry Industry who are trying to regulate the whole jewelry industry, including how you as a business price your products. I believe in the structure and foundation of sound business models, however, I don't believe in forced business practices. Be aware that these groups are stating they are ‘speaking for the whole industry of jewelry businesses’.

The groups voices are demanding that jewelry people immediately terminate discount and sales pricing of jewelry. Their message is that every business, craftsman, artesian, or hobbyist needs to stop lowering their prices as it causes distrust, non-confidence and confusion to the customers, translating into poor quality and inferior products, and that doing so is ‘trashing the gem and jewelry industry, especially at Gem and Jewelry Shows and worst case scenario, these types of concerns cause customers to never recommend you to their friends and family and will only come back to you if no other alternative exists.’

The groups contend, that when someone lowers their prices it is done so without asking the customer to give up something in return. Which in and of itself is very confusing, because if the products have never changed and is of the same quality it was at 600% profit margin, then why would the product be less valuable or demining in quality if it is sold at a discounted/sale price with only say a 50-60% profit margin; which is a little secret the jewelry, especially the precious gemstone jewelers, don’t want known of the very significant profit margin. Marketing and Business Degrees will teach that that is not only a ludicrous statement but is also a factless statement; the only thing that changed is the profit margin and the market pricing structure; which is what keeps the green flowing among any industry and mostly into the deep pockets of people who have enjoyed such large profit margins. Unless the business has changed the materials, quality and structure of the sales/discounted items, then nothing has changed other than the pricing structure.

The strict policy that many are trying to impose is if you want loyal customers and referrals, make sure you never adjust your prices and set pricing levels that supports the customer’s experience and their desires; hinging entirely on customer loyalty of paying inflated prices with exorbitant profit margins. Yet this thinking claims that customers need to feel good about their purchases and feeling confident about their informed choices and decisions. While the businesses marketing/sales messages and prices reflect that of a united jewelry industry standard. More over the groups are encouraging customers to stay away from businesses that have sales/discount pricing and those that supposedly undercut the competition; any business must, to stay within the industry and according to any of the new groups, keep your wholesale pricing at 2-3 times cost and never sell anything retail less than 6 times the cost. Doing so is causing a tremendous black eye upon the gem and jewelry industry and hurts those who maintain their quality and higher pricing.

Bottom line, these types of people have endured many years of huge profits and luxury lifestyles; hinging on every customer blindly continuing to pay sky-high prices for the same product that can be obtained from another quality source at lower prices. Any business is in it for money, but also should be for customer service and satisfaction; if they are so concerned about undercutting pricing, it’s time they got out of the game, because that is what it is all about in business. Business is cut-throat and it’s time that we as small business owners, hobbyist, artesian and the like stand against these types of groups. Should they continue their belligerence it will only lead to the next big down fall of this country; behind Enron, WorldCom, Wall Street, and Real Estate and Mortgage.

If it's good enough for Macys, Dillards, JCPenny's, Barns & Noble, grocery store chains and the like, then should be good enough for anyone...why do you think these companies do such huge sales?

Slow Business or Slow Economy

As of late I’m asked “Is business really slow? How come I can't sell anything? Or The economy is so bad, I’m going to have to sale everything off and get a ‘real’ job." In this slow economy I’m hearing all over that buying is slowing down drastically. I do see a slow down in certain areas of the country, some more than others; but there are areas that are still booming and business is good. So is the question so many people are asking, “Slow Business based on Slow Economy really valid?”

In my business (custom jewelry) I’ve seen a slow down in the big ticket items (single item priced over $100); however, I’ve seen an increase and interest in the lower to mid-market priced items (single item prices $25-45). So, this begs the question, is it really the economy slowing down the purchasing or are people just looking harder at the price of things and then determining if there is enough ‘disposable’ income to make these ‘personal, impulse’ buys? History has shown that when times are good, money is flowing and the value of a dollar is measured in ‘how many toys you have, how big your house is, how stylish a car you drive, what private schools your kids go to, and how much money spouse makes and the type of job’.

Now that times are a little tougher, big businesses are cutting back jobs, and the financial and housing industries have seen their worst years in decades, the trend that many are seeing of people not buying is really, people pulling back, evaluating their situation, and looking to justify their purchases, only after the bills have been paid. It’s a cycle seen many times over the course of history…and if history is correct, this too shall pass…..will we ever seen the ‘good times’ such as the past 10 years, probably not that good, but people will return to the days of impulse buying once the housing - financial - big business dust settles; but the days of the small business owner may not be as successful and may be much tougher than they once were, As a small business owner that wants to last and survive, I’m stepping back to evaluate the situation, listen to my customers and those around, making adjustments as needed in my business. To survive in any situation, one has to evaluate and move forward…learn from history!