Repairs often suffer as the ugly sister of many jewelry businesses. Compared to the more glamorous gold and silver departments, many stores leave repairs to take care of themselves. Yet your repair business can be one of the most lucrative areas in any store, and provide you with a consistency of profit that is the envy of other items.
I’m a keen golfer and, still being of an age where I can give the club a decent swing, enjoy the opportunity to see the ball disappearing off into the yonder. Yet frequently I’ll come up against an “old timer” who, although struggling to hit a decent length off the tee, will consistently keep it down the middle, while I’m in and out of the trees like a rabbit. The end result is often a similar score, or in some cases, the old timer will head me off on the score sheet.
What’s this got to do with a jewelry store? Well, I see the likeness of the old man in your repair department. Consistently shooting the same score day after day, never a star performer, but often chipping in to shore up the bank balance, and seldom failing to convert an opportunity.
So why do repairs have such potential?
1. They are largely recession proof. In fact repairs historically increase when times are tough as customers look to keep old items going rather than paying for replacements.
2. They offer better than average margins. With many jewelers struggling to maintain keystone on items they sell, a $100 repair is generally a much more profitable way of making money.
3. They can lead to better things. Repairs are a great way of building a customers base, and offer excellent sell up opportunities, either by remaking, turning the repair into a replacement of the item, or suggesting a complementary piece of add on sale based on the information you glean from the customer’s choice of existing jewelry.
Unfortunately many stores miss the opportunity to do better with their repairs because they fail to spend any time developing this important area. With the average business achieving 10-20% of its sales from repairs and remakes it’s a good time to look at a few ways this area can be producing even better results:
1. Look to increase your repair prices. Competition can be tough for many sales, but often customers don’t necessarily price shop on repairs. When was the last time you increased your watch battery price? How much are you charging to fit a charm?
2. Create more profit by inviting customers back for service checks. There is no easier way to generate foot traffic than getting customers to return for a service check or an updated valuation. Growing your business is all about foot traffic. You need the systems in place to develop this further.
3. Build that database. One of the most important factors in growing your store, and increasing its value, is the strength and depth of the database you create. Repair customers are one of the easiest ways to grow this area, and today’s repair customer can be tomorrow’s diamond buyer.