If you’re running a small jewelry business, sooner or later, you’ll realize that you need to have a set of company policies established for your clients and yourself. Usually this realization comes when a problem arises and you have no idea how to handle it or what is appropriate to do. No matter what the situation, getting mad doesn’t help; it only makes things worse. And allowing yourself to be walked over by an upset customer can lead to loss of profit on a sale. That is usually about the time you start turning to friends and peers to find out how they would handle the situation. It is also about the time that you realize this problem is probably going to come up again and that you need to have a set of written policies so both you and your customers know how you will handle it.
Below is a list of questions and thoughts to consider as you start to formulate your policies. I recommend writing down your answers and having them printed out to hand to new customers, particularly retail galleries and stores.
Policies are guidelines you feel are important to run a successful business, but that doesn’t mean you can never bend them. Under certain conditions you can always change them for a particular customer or set of circumstances.There is no correct answer for every company. You have to decide which policies are best for your business and your customers.
Below are a few policy issues that come up often for jewelers. Review it and decide which ones could affect your business. Some of these apply mainly to jewelers who are selling their work to stores or galleries. Most of them are applicable whether you are selling direct to the customer or wholesale.
Ring Sizing: When a customer orders a ring in the wrong size, how are you going to handle pricing on the piece? Charge a one-time sizing fee? Let the first sizing on a ring be free? You will cover the sizing costs if it only goes up one size? What happens if the ring can’t be sized?
Setting a Customer’s Stone: Are you going to be liable if the customer’s stone breaks? What if the stone has a flaw in it? What if you lose the stone? Most makers have a strict policy that if they are setting a customer’s stone, the customer must sign a waiver saying the designer/maker is not liable for any stone breakage.
Repairing your Mistakes: If a store/client receives a piece and there are questions about the quality of the craftsmanship, what you are going to do to make it better? Accept the return? What if they have had the piece of jewelry in their store for six months and just discovered a flaw? How long do you stand behind the quality of your craftsmanship?
Repairing Damaged Jewelry: If a customer returns a piece because they have damaged it, how are you going to handle charging for the repair? What if the store claims their customer didn’t drop it down the garbage disposal and you know for a fact it has been handled badly? What if they have had it worked on by another jeweler and that is the cause of the problem? I have heard so many stories about people who say the stone in their ring fell out because of the designer’s setting, but once the designer gets the ring back, she can immediately see the ring has been sized or worked on by someone else and that is the reason the stone fell out. How will you handle this situation?
Returns: The store has had your jewelry for three months and wants to return some pieces for credit or a refund. What do you do? What do you feel is an adequate amount of time for them to have pieces before you take them back? What if they have been poorly handled or worn? Hint: An industry standard is a two-for-one return policy. If the store wants to return a $100 piece after a reasonable amount of time, say nine months, they can if they place an order for $200 at the time of the return. Most people consider this practice fair, and bigger designers/makers might have a 3-for-1 or even 4-for-1 return policy.
Minimum Order: When you are selling to a store, what is your minimum order? Will it be a dollar amount or the number of pieces ordered? How are you going to determine this amount? If a store only buys a few pieces, it can’t really represent your line well or tell your “story.” The work gets lost and tends not to sell as well as a cohesive collection would. Many wholesale shows will have signage for you to display explaining your minimum order policy.
Payment Policies: Do you request a credit card or prepayment before an order ships? Do you ask for the prepayment only on the first order or when a store becomes a customer in good standing? What if they want net 30-day payment terms (meaning they will pay you 30 days from the date of shipping the merchandise)? What if they don’t send you a check and the payment is past due? What will you do? Will you charge a late fee when you send out a statement the following month?
Canceled Orders: Every jeweler will have this happen at some point. A store places an order, you purchase the materials and get started on it, and then they cancel the order. Just like that. What can you do to protect yourself? Devise a policy. When I was running my wholesale business, I had my policy printed right on the Sales Order. Any order that was canceled after it had been started was subject to a 20 percent restocking fee at the time the order was canceled.
I always had my clients sign their copy of the Sales Order so they could see the most important policies printed on the bottom of the form. I also provided a printed copy of policies to new clients so they could refer to it when they had questions.
Now you have told the stores you sell to what you expect, what do they get in return?
Exclusivity: You will give them exclusivity in an area and you will promise not sell to anyone in that area as long as they remain customers in good standing. In a big city, an exclusive area might be a district; in more rural parts of the country, it might be part of a state. No one is ever happy when they find out their neighbor is selling the exact same collection as they are. Keep everyone smiling.
Marketing Materials: What marketing materials can you provide your stores? Are you going to list the store as a stockist on your website? Do you have cards they can pass out to their customers about the care of your piece? Can the store get images of your work for marketing?
Personal Appearances: Are you willing to make personal appearances at the store to help sell your work? How far are you willing to travel to make an appearance? What do you expect to get out of the experience and what do you think the store expects?
Training Store Staff: One of the advantages of doing a personal appearance is you get to help inform the staff about your work, your design philosophy and how you think your work sells best. What other tools can you use to help the store’s staff know more about you? What do you want them to tell their customers about your work? How do you see this improving your business?
Extraordinary Customer Service: I always promised and did everything I could to maintain excellent service for all my stores. You want them to know you will do whatever you can to make your relationship successful for both parties. What are some services you can provide that will make your customer loyal to you? How can you say thank you? What can you do to let them know they are important to you? It is good to remember that you won’t be in business very long if you don’t have customers who are happy with you and your customer service.
Send Customers to Your Stores: The internet makes it easy to shop directly from the maker, but this practice has become a big issue for many smaller stores. Make sure customers go to their local store instead of buying directly from you, if at all possible. If a store has shown your work and the ultimate customer then contacts you directly to purchase it, you should absolutely tell her to buy it through the store where she discovered you. The store will sing your praises for this courtesy.
I have seen cases where the customer didn’t want to return to the store for some reason. The designer sold the piece and then sent half of the retail sales price to the store that did all the legwork. If you are listing stores where you sell your work on your website, encourage the ultimate customers to purchase from the stores. It is smart business.
Look over this list and see what works for you and your business. Start thinking of the policies you want to incorporate and remember you can change them at any time.