The Internet makes much of the world's knowledge instantly accessible to people who want it, which means customers can be just as educated as the average jewelry salesperson. "When customers come in with that kind of power, things change," said one jeweler. "Get your diamonds down to a reasonable price. You'll eventually make money from this guy on other things someday you'll have the chance to sell him pearls for his anniversary or something. But don't lose him to the Internet."
Some agreed, saying they lower prices on a case-by-case basis. Others said they walk away from profit margins that go too low. "If a guy says he'll buy a diamond for $100 more than my cost on-line, I say 'Knock yourself out,'" a jeweler said. "I'll be here when you need me." Many agreed jewelers will make their margins in the future on add-on sales custom designs and mountings, repairs and appraisals on Internet diamond purchases.
A few audience members voiced strong opinions against cutting prices to compete. "What if the word gets out that you're discounting?" asked one retailer. "A long-time customer may come in and say 'I've been a loyal customer for 10 years why didn't you give me the best price?'" Others pointed out that as retailers, they're selling service."Retail will always exist otherwise, people wouldn't still go to Nordstrom," where they get great service but pay significantly more.
- by Stacey King