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...or why 300% profit margins will not fly on internet...
There are few industries which have experienced such large increases in markups, at the same time product knowledge of the average sales-clerk each year declines. Both workshops shops and customers suffer for this... We offer an alternative. ...and we're being noticed too! Mcgraw Hill is writing about us, in a hard bound book being published, and we have won many awards for our web site and business too... We aim to make a difference folks. ...and we have, beyond my wildest dreams!!!
When I started Oregon's largest union professional fine jewelry shop in the early seventies the average retail markup was 200%. Now with the average markup on manufacturing and general services are more like the 250-380% mark, and rising. No-one can afford quality, so stores look for cheaper and cheaper work and services. Over time it seems the customer has been completely forgotten. We don't make that mistake.
Don't think the craftsperson got away unscathered either, retailers trying to get discounts, special terms, and cheaper work, so shops generally faired no better than the public during this maddness. Anyone notice? One well known Seattle based retail jewelry chain extorts from 5% to 10% kickbacks on their work, while changing 250% markups to the customers... Where does it stop??? Right here it stops! So, when faced with soaring retail markups, and the unlimited potential of the web, I decided to take a different path, one where stores are quietly left behind... I work for you now :) As long as one store, or one commercial account, could use their work as a weapon I could not see how this web site could have a bright future... So now I work for you, the real people of the world :)
Most pretty catalogs you'll see in stores have nested 300% markups, just watch for the term "Keystone" (200% markups) or the more common "Triple Keystone" term, which designates a 300% markup... It used to be true that "Foot-Traffic" was everything, and the location was "the thing". The real estate on main street, or in a prime location was both costly and critical. On the web your traffic depends more upon what's between yer ears, and not as much on the size of the corporate ad budgets or pocketbook. Now the fact is, "I can offer you more information, at your schedule, and quality options than the finest store, at a much much lower cost too". ...day in and day out... No bogus sales, no silly games, No stupid stuffed Teddy Bears or Frangos & no expensive ads or half truths here!
When you see a store in a mall you should also realize that they
pay a huge fixed percentage of the gross to the mall-lords, and when you
see a radio or TV ad, yes even a half price sale, remember that you're
looking at thousands of ad dollars, which you will ultimately pay.
Inventory in cases setting idle is extremely costly, as any business
person knows, and salespeople standing around are too. I'm also personally
distressed with many of the salespeople I worked with, they knew much less
about jewelry than their customers. One highly paid career salesperson summed
it up nicely "I don't get paid enough to care!" I applaud
EggHead Software's plan to taking their business to the web, it
will result in lower operating costs, lowering prices and providing more
timely information, as dis-interested store clerks are ultimately replaced.
Eliminating layers of business can often cut prices in half!
Observation?
Well, I guess that it's time to mention that what internet represents
is just becoming understood, and perhaps the first to really gain an understanding
of what this means are the customers and visitors
to very active sites like mine, which offer information and unbeatable prices
to all who come. After seeing the retailers try to squeeze every last bit
of profit, from both the customer and vendor, I have to say that the industry,
with the 300% markups, and asking vendors for discounts and breaks, has
created this perception of a monster, rather than the exciting new medium
it really is. It's those corporations which seek to extort 5-10% discounts
on shop work, all the metal back from sizing (which used to help offset
the cost of servicing the account} which are the problem! ...and all the
while, when a shop might sell an item for $300 to a store, and make an honest
$50, the store would resell the item for $900 and wait 90 days to pay the
invoice to the vendor. BBBBBad retailer, BBBBad!!! You'll get none of those
games here people, this site is for you. Made entirely to offer you more
for less, and if you dare to compare you'll only then understand what we
offer you. Are you smarter than the retailers think? I believe that
you are, and I give you complete information accordingly.
Not cheap jewelry cheap, rather affordable top quality, a safe place to do business.
Imagine the power of the printing press, which
forever altered the course of human history, and indeed the entire civilized
world, now imagine a personal printing press (computers) which can publish
globally, then imagine everyone has one, and does!" If this is not the birth
of a new age tell me what is, this lets information and ideas loose, and
changes everything entirely for all times... Is this exciting, or what!!!
Ray Elsey
Ever wonder why you don't get complete information in most stores?
It's because most store buyers are looking for poor cuts, claritys and off colors they can "kick-start" with those banks of halogen lights recessed in the ceiling. That's where the maximum profits are, and they will not tell you that a poor cut can devalue a diamond by fully 25%!!! Don't look up, it can be blinding! {Grin}... Sound information would tend to rule out a significant percentage of their offerings... The old truth "The more you know about anything the better" is massively true in the jewelry industry. Pretty marble store fronts do not make of good business or prices. Off diamonds build their retail profits, and marginal products jam those cases. Now you know how they built those 60 plus stores across the Western US... Imagine that!
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