When does that customer’s interest in a custom-made piece of jewelry become an actual sale?
You might think this is an irrelevant question but it is definitely important to recognize. When you sell something out of the case, the sale happens when the client gives you payment for the item. This is the simplest transaction in the jewelry business. When you do a repair you usually keep the client’s item and they pay for it when they pick it up. Again, the sale happens when the client again gives you money for work done.
However, custom work is a different creature altogether, especially when you’re talking about full-blown custom. A full custom piece is probably going to take multiple visits from the customer. So when is a custom job actually considered sold? Just like selling something out of the case or doing a repair, it’s not a sale until the money is exchanged.
Why does it matter when that happens? One of the main concerns a custom jeweler should have is creating a one-of-a-kind custom item and then having the customer change their mind and not want it. Then you’re stuck with that customer’s one-of-a-kind item and no one to buy it.
What would happen if you custom-made a wedding dress for a lady and they called off the wedding? What are you going to do with that dress? What are the chances someone is going to walk in and want that exact dress exactly as it is? You’re just going to wind up out the materials and time spent crafting it. The jewelry industry is no different.
When it comes to making custom jewelry, there are so many more opportunities to lose the sale. The multiple visits and time required to craft the finished product offer a lot of room for the customer to walk away from the sale.
In my experience, the best way to handle this is to get a deposit when the customer is ready to start the design process. Asking the customer to pay a minimal amount of money up front to cover some of the time that your designer is going to need creates a sense of commitment to the purchase in the customer. Tell your customer this deposit is applied towards the overall cost of the item. How much money you ask for could be a small set amount deposit of say $50 or 10% of the estimated overall cost.
Once the client approves the design and the budget you should ask for another deposit bringing the deposit up to 50% of the total cost. With this payment, we’ve moved the customer from an interest in the piece, through cultivating that sense of commitment to the purchase, and reached the point where the customer has committed to the purchase and the design with a significant investment in it. At this point, the sale is made and I would no longer allow the customer to return the item or stop the process.
When the item is finished and the customer picks it up, they only have the balance to pay off. This is great for allowing the client to spread the cost of the item out over time. This payment structure makes it more affordable and may help them decide to go with more expensive items.
When a customer wants to purchase a custom-made piece, they are not only buying the finished product, but also the designing process and expertise to create that finished piece. The sale occurs at the point where the customer has committed to the purchase and the design with a significant financial investment in it.
