Several years ago, I was speaking at a JA New York Show about the process for taking in custom work. I was discussing my personal belief that you should never start a custom project without a deposit or some security that the customer is genuinely interested in having the item created by you. I was interrupted by one of the attendees, who said that he had a store in Manhattan and that he had a case full of custom jewelry that had never been picked up. He said that when a customer came in and wanted a custom item created, he got so excited about making the sale that he just went right ahead and built it and then called the customer. His procedure was to do a sketch, give a quote and if the customer liked the sketch (that he then gave to the customer) he would go ahead and produce the piece and then call the customer to let them know it as ready. He thought that 40% never responded.
I believe that many times a customer who wants a custom piece will shop around. They may be looking for a relationship with the designer or they may simply be looking for the best price. As jewelers, I think we forget that customers think that our markup is still triple key.
I suspect that in his case customers were coming to him and getting a ballpark price and then going around shopping to see who would do the job for a lower price. This is a common concern with custom jewelry.
So how can we stop this without offending our customers?
The first step is to determine if the customer is shopping around, curious as to what something would cost, or genuinely wants to have an item made. Personally, I’m a big fan of asking for a design deposit. This could be a large or small deposit that would pay for the CAD time or wax carving. Usually, this deposit would be refundable if the client chooses to not move ahead with the project.
There was a recent round table at the AGS Conclave. The number one subject of discussion was to pay over time, allowing customers to get finer pieces of jewelry by breaking it up into multiple payments.
Think of the custom project in this way. Let the customer pay for the design, then the materials, and then you can break up the rest of the project over the next two or three months and have the customer pick it up when it’s finished.
This might actually make custom pieces even more attainable to a potential customer.
I know many very successful jewelers never charge a deposit, but in my opinion, doing so is a win-win. The client gets to pay the cost over time and you get paid as you go. Most of all, you can be assured the client is serious about having this project created.