The largest expense in the shop is the cost of labor. If not managed properly this expense can easily get out of control. Proper scheduling of work and productivity must be maintained. Efficient use of the jeweler’s time will keep this expense in line.
Improper take-in procedures can cause miscommunication concerning the work to be performed. This may result in costly rework adding unnecessarily to the expense of the shop. A mistake on the description of the jewelry at the take-in counter can lead to the excessive expense of providing the customer with a new piece of jewelry.
Improper handling of precious metal inventory in the shop can quickly add extra cost. An effective precious metal management program minimizes expenses. This program needs to include both proper inventory usage and efficient scrap metal recovery.
Combination
The third scenario A Combination of the two represents the most profitable course of action. The stores who strive to decrease expenses by increasing efficiency (not simply slashing cost) coupled with a plan for steady determined growth will experience a sustained increase in profitability.
This planned growth needs to include increasing efficiency and productivity, improving material handling, eliminating unnecessary cost, improving quality, and setting competitive prices. By implementing such procedures, value is added to the services the shop provides, and the shop will enjoy a solid competitive advantage, and significant profitability.