B&M v Online Pearls - No comparison to me

[pearlkrazy]

I went into a B&M independent jeweler today to get a couple of my chains untangled (I have a really bad habit of doing that!). The store shall remain nameless, as they have super great customer service & were nice enough to untangle my chains for free.

But... their pearls were ridiculous! The store was empty, so I poked around & chatted with the sales lady while I was waiting. I couldn't believe the prices for moderately blemished pearls with average luster, both Tahitian & freshwater! Much more expensive than what I could get from one of the online faves here & lesser quality. They did have a few gorgeous pieces (including a jawbreaker sized estate WSSP & diamond ring *drool*), but the prices were in a range that I couldn't even consider.

Anyway, I can see why some B&M's might be threatened by online competition. I don't know how they can compete on most levels, their overhead is so much higher. And I'm sorry, but no sales person provides fantastic enough customer service to make it worth spending (at least) four times more on a piece of jewelry.

Of course they have a market in things like that jawbreaker estate ring, but those sales probably don't come as often as a standard strand of pearls.

[jshepherd]

I am not sure that I would agree about their overhead. I believe the average B&M has a much lower overhead than some online sellers. Our overhead is actually quite high.

But as I was trying to explain to Mastoloni (pearldiver52865, who called the claim preposterous), competition is impossible on quality and price. It is possible on one or the other, but not both. A B&M can have amazing quality, but they will charge a fortune for it. They can have low prices, but the product will reflect that.

It really just comes down to sourcing and volume. Sure, a B&M can source direct if they travel to the sources. But the only feasible way to buy is what is referred to as "by selection". If you are examining a large lot of pearls and the quality is consistent you can buy the entire lot (let's just say 1000 pieces) for $250 per pearl. But if you select from it, you are likely going to pay up to three times the price per pearl. That is why almost all B&Ms buy from wholesalers, and many (if not most) buy on memo.

It is not possible to buy the entire lot because it would take a lifetime to sell them all.

When it comes to price, B&Ms have no choice but to charge more. Selling a piece is not an every-day occurrence. Things move very slow at that level. When I started selling years ago I did a lot of memo in the LA area. We finally stopped. We could put 20 pieces in a store and within a year we might sell five. But online we can turn inventory in three months.

So preposterous? I don't think so. It is common sense.

[Pearl Dreams]

Here's what I do when chains get tangled: lay the chains on a flat surface that you don't mind scratching a bit-- like an magazine-- and then use 2 straight pins (or needles) to gently loosen the knots until they are loose enough that you can use your fingers to finish the job.

About the B&M shops: we visited the artisan shops at Seaside, FL last month and the prices on some of the pearls were unbelievable. One seller had 4 (flawed, off round, 3 were about 9mm and the 4th was about 7mm) dyed black CFWP, strung on knotted leather (no metal clasp) for $200.

Another was selling simple shell pearl strands for over $100.

Who are they kidding?

[Reiah]

For me, the B&M stores just don't have enough Pearl expertise or quality of pearls. I brought a AAA Freshwater pearl strand in to a B&M store and compared it to their high end Akoyas. I thought my FW was still nicer. :-) and costed much less.

Jeremy,
When you say by memo, is it like they don't pay you unless the necklace sells?
thanks,

[Nathan Reed]

I totally agree with the statement;

[QUOTE=Reiah;38811]For me, the B&M stores just don't have enough Pearl expertiseQUOTE]

I was looking at a pearl necklace in a B&M store and asked if it was freshwater (to test their knowledge). Their reply? “No, actually these are cultured pearls.” I mean, really, how much do these guys know!

[J Marcus]

Jeremy--Isn't comparing the overhead of an online store and a B&M store a bit of the apples and oranges approach? As I mentioned in another thread of yours recently and you have just explained, in a slightly different way, in your post here, I think the critical issue or limiting factor is the turn rate of total inventory and the size of the inventory that is turned over in a year. It seems to me that the only way to put the overhead issue for both types of establishment on level ground is to look at overhead as a percentage of yearly gross sales. What I think becomes obvious then is that it is part of the economies of scale, along with such other factors as sourcing and volume that the online vendor is able to take advantage of. Kind of a triumvirate of economies of scale, perhaps.

Yes, the B&M must charge more because of the cost of such things as untangling chains for free and personal attention such as showing non-buying lookers the goods in the cases and all the other things that take up staff time. For those who have the knowledge, the expertise, to know what they are looking at and what they could buy it for elsewhere, then there is no reason that they should make their purchase at a B&M establishment. It is my opinion that the only things that a B&M jewelry establishment have to sell are:

1. Personal, face-to-face, customer service that includes seeing and handling the goods under consideration;
2. expertise and the assurance that a customer may have (rightly or wrongly) by dealing face-to-face with a supposedly knowledgeable vendor; and
3. Design, to be thought of as either more personalized or unique. (for better or worse, as it were...)

Other than these three things one is left only with material commodities that can be purchased more reasonably elsewhere. (A precious metals refiner, for example, comes to mind.) I think that one might eventually come up with an algorithm that would show the amount and cost of worker hours per item sold plus the amortized overhead per item sold plus the increased cost of the items sold because of a lack of economy of scale incurred in order to provide a high number of worker hours per item to supply, shall we say--commodities--one, two and three above.

Of the three main commodities that a B&M store may offer in contrast to online establishments, design is the one that is most weakly "owned" by B&M's rather than online vendors. However, I also think that design is something that a very large part of the customer base is loathe to trust to the internet. Part of this is due to a fourth commodity that is not owned very exclusively by either type of vendor and that is prestige. This is what "branding," (shudder. . . ) a bandwagon approach to provenance, tries to capture. Having a piece designed just for them personally by a known designer is prestige most largely captured by smaller, custom, B&M establishments.

What one purchases from any vendor is more, often much more, than the item at hand. I believe that any vendor in any venue will pay dearly if they do not keep this in mind and serve customers needs--all the needs that they desire from said vendor. I'm not stating this defensively, I believe it's just the facts of the matter.

----------------------
Marc
http://www.flyrodjewelry.com/home.html
A--Balone vendor

[pearlescence]

But online stores can and do design on commission. IN fact I would argue more online stores do design to order than B and Ms. How many chain B and Ms have a resident designer on the premises?
At my store all the stuff is designed and made by me, and a special and one off work is no problem (in fact it is easier than a speculative make because I know it is sold)
So anyone who wants to can contact me for a unique work.

[jshepherd]

I agree that the overhead comparison is an apples to oranges approach. But I mention it because it comes up so often with online sellers and Web sites versus a store. I just do not feel it is the case. But on a comparison of total sales then the B&M has a much higher overhead percentage indeed.

But in the online biz speed is a virtue and selection sells. This means everything that is in stock is ready to go. With direct sourcing this means nothing is on memo. Everything is fully owned a paid for. For us this means millions of dollars of inventory that is wholly-owned.

In regards to the face-to-face interaction and the time spent with each customer designing pieces, this is definitely to the advantage of the B&M seller. But the customer is a different customer as well.

I certainly think there is a place and will always be a place for B&M dealers. My goal was never to put any B&Ms out of business. Our pricing is not designed to be predatory. The Internet is new. It is a new medium and a new form of business. But it cannot completely replace what a B&M can offer.

[bbs7th]

May I weigh in here?

I can empathize with the B&M folks--- in a similar vein, the imminent demise of the Private Practice optometrist has been going on now for roughly 30 years. First it was LensCrafters. Then it was Walmart and Costco. Now it's 1-800-Contacts and Zenni (internet) Optical that has my colleagues flapping hysterically around their kitchen islands.....convinced their ever-increasing market share portends the Eyes of March.

Here's the thing. Marcus and Jeremy are right---there will always be people who:

1. Are not overly sensitive to price

2. Think you're swell and value the personal relationship

3. Want instant gratification, and/or....

4. Not motivated to shop around.

Treat your customers with integrity and a smile, and you'll be fine. There's plenty of business for everybody.

I LOve my local independent jeweler. I'm in there at least once a month. Every time I walk in, they greet me by name, clean my jewelry, and check my solder points with enthusiasm. Am I going to purchase that great Tahitian strand that's been eyeing from its velvet stand? Probably not. But that stunning set of 10mm SSP studs? They're only $90 more than PP, so...... it's the LEast I can do!

Hey, while you're at it, may I take a look at those diamond hoops.......?

[Valeria101]

...---there will always be people who:

1. Are not overly sensitive to price

3. Want instant gratification, and/or....

4. Not motivated to shop around.

That isn't a very flattering portrait, is it

[bbs7th]

That isn't a very flattering portrait, is it

Well, I suppose it depends on how you look at it. For many people, time--- time with family, time pursuing other interests, etc--- holds greater value than the money saved by shopping around. Why, one could argue that a lack of frugality could just as easily be a virtue!

[knotty panda]

so...... it's the LEast I can do!

Absolutely! One thing the B&M's have over internet is impulsivity. Walk in, speak to a nice person, (believe me, most people don't care if you know pearls or not, so long as you smile and listen) something catches your eye and you buy it.

Impulsivity is good especially at the holidays for men. They don't want to shop in a store, they don't want to shop online, they don't want to shop! By and large, they pick a block of time that's allotted for their purchases. They run through the mall, pick up things knowing that can be EASILY returned for other merchandise or cash on the same day, no mailing back, no waiting, no fuss, no muss.

Women like impulsivity too. We like to walk past a window time and time again and look at particular piece until it either calls us to purchase, or it looses it appeal. Yes, that is impulsive because you finally give in to the impulse.

Then the last and probably most important thing is, community and having things accessible on a moment's notice. I always say to support your local bead store. Yes, you can get it online and for probably cheaper. But so many times I don't have time to wait for an order and I run up to my local bead store for a little something.

I miss my Cincinnati bead store "A World of Beads" (plug for Paula and Carolyn). They have huge tables where you sit down next to a stranger and design. The next thing you know you're looking over each other's shoulder. Then you're saying, "Oooo, cool!" Then you're exchanging e-mail addresses and making plans to meet the next Saturday, same time, same table and a friendship is born. Now that is the best!

It's the same thing with B&M stores. You need their other services like chain untangling, cleaning, restringing , prongs tipped. Where would you go if they weren't there? Support your local B&M.

[Nerida]

I agree, Knotty! I can buy books cheaper online in a dozen places, and I use online bookstores for all sorts of things (specific editions of musical scores, books not retailed in Australia), but if I'm looking for a novel to take on a trip, a gift for bookloving friends etc, it's off to my local B&M. Why? They know me, they know what I like to read, they live and work in the same community as me, and if I don't support them, next time I need them,they won't be there!

[Nerida]

That isn't a very flattering portrait, is it

Whoops - I recognize myself in that portrait!!

[barbie biggs]

Speaking strictly as the Devil's advocate: I have recently discovered a new service our local stores provide. This service is both good and bad. It gives lonely little old ladies something to do. When my mother died last November, my sister and brother and I got together to go through her paperwork, clean up her house and garage and so on...as so many people do. When we opened up the garage we found (in addition to black widow spiders) a large cover that looked like it covered a car. We carefully removed it and underneath were hundreds of boxes. Some from QVC of course, but many from local stores.
Since then I have spoken with many people who on loosing a parent, usually a mother who lived alone, found myriad boxes full of gifts never given. The local B and M's provide companionship for people who have no one else to talk to. And when these little old people feel guilty about taking up their time, they buy.
You would be amazed at how many times I have heard this story in this last year. I have even read similar accounts in magazines. People feel isolated and if they have no computer skills, they go to the mall or their local store. If they love bling they hang out at the jewelry counter. The generation seems to determine whether they feel like they have to 'pay' for the time they use up.
barbie