Jeweler said memo stones would cost me more?

Lucygoosie

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Post#1 @ 09-23-02 , 12:10 AM

I went to a small family-run jewelry store. They had only a couple GIA loose diamonds to show me. While they were nice stones, and priced very well, they weren't what I was looking for. I asked him if he could get stones in on memo and he said he could, but it would cost several hundred more for me to buy one of them compared to buying a stone he already owned.

Was he just pushing me to buy now buy this, or would there really be that much of a price increase on a memo stone?

Thanks for the input,
Lucy

RankAmateur My Profile Joined: 11-12-00 Posts: 1,323 Years: My Karma Power: 0 Points: 10 Hits: Out=0, In=1	Post#2 @ 09-23-02 , 12:22 AM I don't know how many thousands you were planning on spending, but it seems fair to me to allow the jeweler to recoup his costs of mailing et cetera when he gets stones in on memo. I suppose it can add up to a few hundred bucks pretty quickly.

Lucygoosie My Profile Joined: 09-10-02 Posts: 261 Years: My Karma Power: 0 Points: 10	Post#3 @ 09-23-02 , 12:30 AM I'm only looking for a smaller stone. He gave me a price of $2100 on one that he had in, but said that the same stone would be probably $2700 or so if it were gotten on memo. Seems like a very large increase to me, given the amount of money we're talking about. What do you think?

brandnewstone My Profile Registered User: offline Joined: 08-20-02 Posts: 73 Years: My Karma Power: 30 Points: 10	Post#4 @ 09-23-02 , 12:51 AM I was told the same thing when I purchaced my stone. The one I really wanted didn't have a cert, and he had a similar one with a GIA cert. The one w/the cert was a little bit more $, I think like 400 or so; but I still stuck with the no cert one, because I liked it better visually. Some might think that was a dumb move, but I can live with it!!

RankAmateur

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Post#5 @ 09-23-02 , 01:19 AM

Quote:

Originally posted by Lucygoosie
I'm only looking for a smaller stone. He gave me a price of $2100 on one that he had in, but said that the same stone would be probably $2700 or so if it were gotten on memo.

Seems like a very large increase to me, given the amount of money we're talking about.

What do you think?

I agree - it seems like too much (unless it is a better stone). I geuss it's his prerogative to try to persuade you to buy a stone from his stock. Then again it is you prerogative to go elsewhere!

Mednikow

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Another way to look at it...

Post#6 @ 09-23-02 , 11:29 AM

Memo stones often do cost more than stones that a jeweler already owns.

Margins on diamonds are very small, which is no surprise to anyone here at DT. One way I can make slightly better margins is to buy them when they come along at bargain prices. Many diamond dealers know exactly the kinds of stones I like for my inventory, and they know they will get a check back very quickly when they send me a diamond.

When I have to go into the marketplace to get a specific stone to meet a customer's request, I will invariably have to pay more than I would if I were buying for stock.

That being said, it's my job to stock the kinds of diamonds demanded by my customers, and if a customer wants something that I don't have in stock, then I view it as my error in not anticipating the market's needs. (That's sort of oversimplified, but in general that's how I view it.) In this case, the customer should not pay the "penalty" of a higher price because of my not having the stone, and I still charge the same thing but just make a slimmer margin.

Jay

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Post#7 @ 09-23-02 , 03:07 PM

Mednikow,

I like the attitude you've expressed. That seems to be a core objective for all service businesses... and diamonds are a service business for any dealer who is trying to compete with lowest price vendors.

Lucygoosie,

Sometimes the price can be higher for memo goods than for items purchased outright, because the wholesaler isn't certain of a sale, as they would be with an outright purchase. That uncertaintly and the increased amount of work for the wholesaler gives the wholesaler a reason to want to charge more. For a consumer, the benefit to memo stones is the possibility of seeing more diamonds than the retailer can justify stocking, particularly if they are outside the properties of the stones they normally sell. Also, for the retailer, selling from stock increases the turn rate for the capital of the business and turning stock over as fast as possible is a very desirable business goal, for it leaves the money sitting idle (in unsold stock) for as little time as possible and increases the overall return on investment of the business.

Ideally you'd be buying from a vendor who routinely stocks and sells the quality you want to buy because that is lower cost for both you and the vendor. This is one reason why I regularly suggest AGS and EightStar vendors. Those people are more likely than a randomly selected store to have a good selection of well cut diamonds.

Last edited by Jamesd : 09-23-02 at 03:09 PM.

Lucygoosie

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Post#8 @ 09-23-02 , 07:52 PM

Thanks for the advice, everyone. And Mednikow, your attitude toward your customers has earned you a fan.

So should I just hit every jewelry store in my area, hoping someone has what I'm looking for in stock?

And out of curiosity, if a jeweler goes to his provider and brings some stones back on memo, what kind of obligation does the customer have? I would hate to have someone go to that effort (and cost?) and not choose one of his stones. It seems rude...is it? Or does a jeweler usually bring in a large enough number of stones that it's pretty sure that one of them at least will please the customer?

Marvin My Profile Registered User: offline Joined: 03-03-01 Posts: 420 Years: My Karma Power: 40 Points: 10 Hits: Out=448, In=1	Post#9 @ 09-23-02 , 08:08 PM Most of us that supply diamonds to the trade charge 5% for MEMO,on most stones. Some iothers charge a little more. Cash always talks. However if it's just going out for a customer to look at and then cash ,there is no %. If they don't like it they pay to have it mailed back. marvin
	Marvin signature Selling to the trade only Yo!,Got Diamond Studs and Mellee Type to get Wholesale price list(Trade Only) Looking to buy Native American Items.Baskets, rugs,Old pawn jewerly,Ivory,artifacts

Lucygoosie My Profile Joined: 09-10-02 Posts: 261 Years: My Karma Power: 0 Points: 10	Post#10 @ 09-23-02 , 08:13 PM So are you saying that if a retailer gets a stone in on memo, he pays 5% (or so) of the cost of the diamond (plus return shipping) if the customer doesn't like it? And if the customer does buy it, there's no 5% for the retailer to play? Thanks for the info.

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