Professional Jeweler Archive: Small Shop Meets Big Corporation

August 2001

Professional Bench/Five Steps to Profit


Small Shop Meets Big Corporation

And that spells success for two organizations


Welcome to Five Steps to Profit, a new monthly series by Mark B. Mann, director of trade programs for Jewelers of America. Each installment features a JA Certified Master Bench Jeweler who owns or is employed by a successful store or trade shop. These leading bench jewelers share with you their tips and techniques for ways to create and maintain a profitable shop and service department.

To highlight key operational decisions and practices – the ones that most influence overall shop profitability – each installment of this series will revolve around the following Five Ps:

  • Pricing.
  • Process.
  • Promotion.
  • Productivity.
  • Professionalism.

William Holman received a bachelor of fine arts degree in metalsmithing at New Mexico State University then went on to earn a master of fine arts degree in sculpture. While in college, he helped to teach a beginning jewelry class, sparking an enduring interest in the world of jewelrymaking and repair.

Today, Holman has a lease arrangement for his shop with a major jewelry store chain that has a location in a major shopping mall in Dallas, TX. His shop provides manufacturing services primarily to this store, but also to others inside and outside of the chain. The arrangement is so successful the regional manager for the chain persuaded him to establish another shop in the company’s new store in a different mall. Holman attributes the success of his operation to quality design, manufacturing, training and communication skills. Also a factor is the autonomy he is offered and the cooperation he receives from the chain’s employees and management system. Here is how he uses the Five P’s to make a difference:

Pricing

Holman wrote a price book that began with an analysis of his labor, materials and overhead costs for the majority of jobs taken in. He then applied a margin for profit, conferred with his customers and published the pricing book. The books are professionally printed and laminated, and each of his retail store customers has a copy.

Holman encourages the sales professionals to use the book as a guideline for every repair taken in. If the job is straightforward, the staff quotes the stipulated price. If more than routine workmanship is required, they add additional fees to cover the extra time required for a first-class job.

Process

Because he works on-site, Holman can offer the staff of the store where his shop is located valuable technical manufacturing details and conduct sales training on repairs and custom orders. Here are the key components of his process:

  • Holman prepared a worksheet for the take-in of custom orders. This helps ensure all pertinent information is included and minimizes returns.
  • All worksheets are updated through the manufacturing process and kept in a binder so anyone on staff can answer questions about the article.
  • Holman often works directly with the store’s customers – always with a sales professional from the store at his side.
  • Holman or one of his manufacturing team members remains accessible to the sales staff for questions throughout the day. They also provide detailed answers from which the store’s sales professionals can learn.
  • Holman spends about 50% of his work day at the bench; the balance is allocated to training, facilitating sales, following the manufacturing of pieces and other aspects of partnership development with his customers.

The result: Constantly full job boxes.

Promotion

Holman directs little promotion to his customers, but he envisions a cooperative promotional partnership that includes fliers, counter and window signs, press releases and other promotional ideas to grow both businesses. “By working directly with my customers in their promotions, they would get what they feel they need; the result would be additional work for my company.”

Productivity

Holman occupies minimal space and has downsized his equipment over the years. He uses a team of bench jewelers off-site – with only one bench jeweler generalist on-site.

He allocates 10 hours a month for research of new tools, equipment and pending technologies. “It’s a lengthy process determining what’s going to work best for my operation, but the investment in time comes directly back to my operation in greater numbers once the new equipment and procedures are in place.”

Professionalism

Holman values his professional credentials, which include master status in JA’s certification program. The sales staff uses his credentials daily in their presentations, giving customers additional confidence. He also appreciates being under the umbrella of the jewelry store chain because of its reputation, credibility and service as a fine jeweler.

Despite his workload, Holman gives back to the industry. He performs technical demonstrations for audiences throughout the world for Foredom Tool Co., Jewelers of America and various tool and equipment companies. He’s also asked to perform research and troubleshooting for new products by several manufacturers.

Holman and employee Federico Portillo hold their oversized job boxes. “We used much smaller job boxes in the past and they were always stuffed full. We arranged for boxes three times larger and find they are constantly stuffed full of work.”
A year ago, Holman acquired a laser welder that greatly simplifies many time-consuming repairs and bench operations. “The expense of this equipment is significant, but its use in our operation is very broad,” he says. “We perform repair and custom orders with it; we would be in a difficult position without one on the premises.”
Holman is perfectly at home with new technology. Pictured are the Foredom AllSet and new Foredom setting hammer attached to the micromotor. Both items offer the ability to perform certain tasks in a shorter time while guaranteeing higher levels of quality.
Holman offers professional insights for use of laser welders at the Swest booth in a national trade show. Here he speaks with Joseph Cheslock of Sycamore Jewelers, Midlothian, VA.

Use Pricing Book as a Guideline Only

A sales professional took in this white gold ring to be sized down two sizes. The handmade leafy pattern continues all around the shank, so he added a fee to cover the time required to reengrave the detail and then retighten the leafy prongs.

Based on Holman’s book, the standard retail charge for sizing down a women’s ring two sizes is $30. The sales professional added $18 to cover the extra work. Of the $30 resizing fee, $10 goes to Holman Designs. Of the $18 fee for extra work, $6 goes to Holman. If the store charged by the book and didn’t include a fee for extra work, Holman would have lost:

  • $6 on this repair.
  • $60 if he did 10 similar jobs a day.
  • $18,720 if he did 10 similar jobs a day for a year.
  • $187,200 if he did 10 similar jobs a day for 10 years, plus interest.

For information about the JA Bench Jeweler Certification program, call (800) 223-0673 or visit www.jewelers.org. For questions about William Holman or his trade shop, call him at (972) 702-0606.

PHOTOGRAPHS COURTESY OF JEWELERS OF AMERICA

© 2001 – JEWELERS OF AMERICA


Copyright © 2001 by Bond Communications