Value Based Pricing
Part 2
Brad Simon
In the jewelry industry, there are two myths that flourish among retailers as to setting prices for jewelry repairs. This further complicates the already difficult process of setting repair prices. The first myth is that you should set your prices based on what others charge.
There is a story of a man who worked in a factory. He lived on the opposite side of town from the factory, and every day he would walk through town on his way to work. Each morning as he past though the downtown shopping area he would stop in front of the finest jewelry store and stare in the front window. He would gaze through the window for a moment, look at his watch, and then continue to work.
The storeowner grew so perplexed by this mans behavior that one day he went outside to meet him. He said that everyday he saw him staring though his window and he was curious as to what he was looking at. The man told the storeowner that it was his job to blow the noon whistle everyday at the factory, and he took his job very seriously. So everyday he would stop in front of the store because it was the finest jewelry store in town. He would look through the window at the stores clock and check his watch to make certain his watch was correct. This way he was assured that he would blow the noon whistle precisely at 12 o clock.
The storeowner told the man he admired his dedication to his job. In fact, the storeowner said, you are so accurate in performing your job, that for years we have set the clock in our store by his noon whistle.
After years of carrying out this ritual, is there any way that either of them had a clue as to what the correct time really was?
For years, jewelry store owners have set their prices for jewelry repairs by calling other stores in town and then set their prices, based on what the other stores charge. If you use this method to set prices, you are setting your prices based on stores who have most likely called you sometime in the past to see what you charge and then set their prices based on what you charge. After years of carrying out this ritual, is there any way that any jeweler has a clue as to what the correct price should be for jewelry repairs?