Derco margins (SF Gift Center)

[beej]

Hello All,

I appreciate all I''ve learned here by reading many informative contributions. I''m nearing the end of my diamond quest and am hoping that you may be able to help me with some final guidance. At this juncture I believe I will buy a customized setting from Derco but am still unsure about buying the rock from them or online.

I had a very positive experience with my salesperson there until we came to the issue of price. I was quoted prices on the setting, a matching band and the stone. I then asked what the best deal they could make me on all three would be. I was then told "we can''t reduce the price or we will start losing money." Granted, perhaps because of my dress or up-to-then relatively docile approach to the sales process maybe I hadn''t come across as the most sophisticated consumer (nor do I claim to be.) But I found that response to be a little insulting. I''m sure Derco hasn''t thrived since 1939 by operating on razor-thin margins.

I intend to give them another chance by making an offer which reduces their margin a little bit but also recognizes the fact I am bringing them significant business that I could readily take somewhere else.

To that end, I''m hoping some of the industry participants here could provide me with a little guidance as to average (ballpark) margins (%) likely imbedded in their starting list prices. I recognize they require a reasonable profit to remain a strong going concern so I don''t want to insult them through my offer. At the same time I also want to prevent them from insulting me.

Thank you very much for any guidance you can provide.

 

[FireGoddess]

I''m a consumer, not in the industry, but I just wanted to point out that Derco''s margins might be higher than online vendors here because they maintain a storefront, which has more overhead.

I bought my husband''s wband there and didn''t negotiate. It was a fairly decent price, but I hate haggling.

 

[Mara]

most B&M will have a higher overhead and therefore higher margins to compensate for their storefront, employees, etc. there''s definitely a markup built in there, i know in the past numbers have just been thrown around re: what sorts of markups B&M''s make and i know we have heard a huge range...even up to 125% or similar from wholesle. but it''s really hard to know what the true numbers in IMO.

i guess you can compare online to see what the online pricing is vs Derco to get some idea of what the differences are, an estimate. what type of stone and specs etc were you checking out? hearts and arrows or branded or ?

 

[Gypsy]

I would come up with something comparable from an online jeweler. Setting, center, band. You know... similar platinum weight, total diamond weight (if your setting has diamonds), etc. Then go armed. Tell them honestly that you''d prefer to work with them, and that you understand that they have a store front, but that you also want a good price for what you are getting. Lay it out. If they don''t play... then you know where you stand. But that''s just me.

 

[beej]

Thank you all very much for your input. I think I will take the tack of finding some good online comparables and anchoring the discussion around them. By way of further background, my main area of concern is the center stone, which is the most expensive element of the set and also (it seems) subject to by far the highest mark-up.

I''ve been looking at stones in the .88-.95 carat range and have gone back and forth a little on cut and clarity (not so sensitive to color so long as it''s at least in the near-colorless range). I basically just want to feel like I''m getting the best stone possible for my money in a deal where both the seller and I can leave the transaction feeling content. I''ve personally found it very frustrating how little transparency there is in a business where there is so much money involved for products that offer scant difference in actual utility.

All ranting aside - I''d just be happy to give my money to someone that could be clear with me about how much profit margin they feel is fair for the value they''ve added to the transaction chain in bringing me a finished product. An up-front vendor in the diamond business - now there''s a value proposition I would deem priceless!

Thanks again.

 

[Gypsy]

Actually that's exactly how we felt. A friend who worked in the jewelry business-- but not with loose diamonds herself-- recommended our jeweler to us. His in DE... but always happy to answer questions or help anyone. The web addy is Minstersjewelers.com and if you tell Amelia or Will that Gypsy recommened you, they'll know who I am. He charged us his price plus 20 percent. He's a diamond broker- we called him, told him what we wanted in terms of specs (and I mean we gave detailed numbers) he got the diamonds shipped in for us (three princesses, three asschers) then my fiance picked mine from the selection. I know you're in SF but my family is from that area as well... and my uncle, when ring shopping for his wife, went to the Gift Center... eventually had me pick out a princess for him from Minsters because of the price difference (plus no tax in DE). I've had people just call Will, talk to him for prices and then go armed to their jeweler to bargain. So, that's my advice. He's a good, honest guy.

He's even trying to help me with my re-set... which is hard cause they've never done a project like mine... and he was the first to tell me what to look for in other jewelers-- in terms of equipment, budget, questions to ask... when he suggested I get qoutes from different people cause he wasn't sure if he could do my project. He's a rare one.