The below is a distillation of my experience of 30+ years of buying and selling. This is proprietary data of Leo Hamel Fine Jewelers and is never to be shared with others outside the company. No copy of this is to be taken or sent out of the store. This is not magical stuff, but this is my experience and belongs to my staff while they work here at my company…Leo Hamel
Never make an offer over the phone.
Giving a price over the phone can NEVER help you. This includes giving percentages, such as, “we’ll pay 20% of retail for Tiffany Jewelry” or “we can pay 70% – 80% of market for scrap silver.” Even hinting can hurt. Why? Because all the caller has to do is call someone else and a smart buyer will simply say, “I’ll pay more!” or quote a higher price that he has no intention of honoring. He does not actually need to pay more because no one can hold him to the promise. Regardless, the caller forgets all about you, the person that gave the price first.
A second way it can hurt is if the customer does bring in their items and they turn out to be in horrible condition or not what you thought they were. Your price was for the normal item, but you are presented with something that is worth much less or worth nothing at all. You are automatically on the defensive because you gave a price over the phone! Customers are not jewelers. They will usually describe their items as “great condition” or “never worn.” They might not be lying, but that they have never seen a great condition Rolex or simply never knew their dad wore it every day for a decade before they were born. Customers will say things like a Rolex was “just cleaned a year ago” and it shows up encrusted with dirt.
Customers will always say, “I won’t hold you to the price” but they ALWAYS WILL EXPECT THAT PRICE. There is no point in asking if they won’t expect that price (or higher) when they come in! Even if you give someone a range like “we pay $1500-$2500,” the customer will want the $2500 no matter what the condition is of the item, so just don’t do it.
You might think, “Other buyers will quote over the phone, so how do we compete with that?” If you are professional and sound honest, most people will come in because now they are curious about what we will pay. Once you see the item, you can match some other phone quote or pay less by reminding the customer that a phone quote is not necessarily a solid offer.
Here’s an example: A customer showed me a 14k gold bracelet that weighed about 7 grams. I offered him $120 and he asked what that was per gram, which was $18.20. He said, “The pawn shop is paying $30 per gram!” I asked how much they offered and he said $110, which is only $15.70 per gram! Some buyers will tell bold lies about what they pay, because customers rarely bother to verify. We don’t play that game.
The only Exception: you may make offers by percentage of spot price on coins and bullion. Do not give hard numbers because customers will expect you to pay that number even if the price drops.
Practice and USE these phrases:
If the customer continues to push you for a price just say, “I am sorry sir, but I have to see the item…I am NOT a psychic jeweler.”
If they still push you, you can say, “Alright. Please hold the item up to the phone.” When they say, “Hey…what the…” You say, “I was just kidding about not being psychic. I really am! I use the phone lines to concentrate my powers. Could you hold it a little closer to the phone…?”
All kidding aside, YOU DO NOT MAKE PRICES ON THE PHONE.
If a customer has a phone quote from another buyer, you should cast doubt on it by reminding them that it cannot be accurate until the item is seen in person, and that some jewelers quote high to get the person in the store but will find a reason not pay that much. Most sellers have this worry. You can assure them that we will pay the highest possible price, but that we have to see it. Staying firm about not giving a quote over the phone adds to your credibility because it communicates you are so professional that you’d rather risk losing the buy than risk being inaccurate. In reality, you are avoiding a phone pricing war and are making it more likely that we’ll make the buy, because the seller is now curious about us and they perceive us as more professional.
An angle some people will use is to say, “But I live in LA. I am not going to drive down there without some idea of a price!” This is a good time to ask, “Have you had any quotes?” *“Did that person actually see the item? Did they offer cash or was that on consignment? Often a jeweler will quote you a high price and then after you have run all over town and come back to them, they will pull the trick of saying, ‘That was my offer then,’ or ‘I can get you that, but on consignment.’ Consignments can take months and there is no guarantee. We pay cash!”*
If they won’t come in without getting a price from you, a last resort is, “Why don’t you shop around, get some prices, and then come see me. We pay the highest possible prices, so just see us last!”
Or you can say, “I am here to help you and I will see to it that you get the highest possible price!”
If by saying either of the above “…highest possible prices…” lines gets you in trouble, all you have to say is, “Sir, I said we pay the highest possible prices, but it is not possible for me to pay that price!” Or “Sir, I said I would see to it that you would get the highest possible price, and that other dealer is offering it to you. So go get it!”
The basic rule for someone who wants to shop around is, “See us last.” You do not want to encourage shopping but you do need to know how to deal with it. After they have shopped, and maybe they got a higher price than yours, you can use those lines between the asterisks above to put a little doubt into them about those other prices.
All of these tactics have been used by us, and against us, so be aware and use the correct lines as needed. Practice and remember what works and if you develop a good line of your own share it with me and our other buyers.
You should always ask where they got the item and if they got it from us, you must be extra careful to NOT offend them by giving a lowball price. Our customers can get very upset in this situation so please be careful. We usually pay a little more for things that came from us so that we don’t upset the customer. In the case where the item came from our store, consult with your supervisor or the COO before getting into a lowball-price situation that could anger a customer.
That being said, you still have to spend time qualifying these customers. Don’t assume that they want a ton of money just because they purchased it from us. Don’t bring an item to your supervisor or the COO for special pricing unless it’s necessary. If you automatically show them every item that was purchased from our store, you are wasting their time, your time and the customer’s time.
When you are trying to buy something from a customer, or taking something in trade on a sale, find out how much they paid for it. You can do this very casually while having a back and forth conversation with the customer. If you make them feel comfortable, they are more likely to give you all the info you need.
If it was a gift or inherited, and they didn’t pay for it, you can usually offer them a lot less than if they paid with their own money!
This is even truer if they also think it is ugly! They will care a lot less what they get for it if they didn’t have to pay, and especially if they don’t like the person who gave it to them anymore as in an ex-husband or boyfriend.
Qualify before making an offer.
There are two easy ways to upset customers. One is to offer them “too little” so they are offended. The other is to try so hard to find out what they expect that they think you are trying to low-ball them.
In the first, you are making the easy mistake of simply evaluating the item and making an offer without any idea of what the customer wants.
In the second, you are asking too soon, or repeating a normal script instead of reading the customer and tailoring your conversation accordingly.
Asking a few questions can help you qualify a customer’s expectations.
If they give you a high price, say, “I just don’t know where to sell it for more than that. If I can’t make money, I can’t buy it.” If they offer a price close to what you want to pay, “Well we are in the ball park but I need to make some money to justify buying it from you…”
No matter what price the customer asks for, high, low, or just right, be collected and professional in your response. Never jump at a price. You want them begging (internally) that you will buy it and hesitating builds up that desire. A friendly, collected response is your best ticket to making good buys and having satisfied customers, even the (few) ones who don’t sell.
If they are low, don’t salivate and rush to buy it. Why not just say, “OK. I’ll take it?” Because if you act too fast many people will think, “Ooo, that price was too low!” Spend a little time making sure you can make their price work.
If they are high, don’t react as if you were just electrocuted. If you spasm and stagger against the wall as if you’ve have a minor stroke, customers will think you are just a shark acting to get them to lower their very fair price. And they will be insulted.
You can even say, “Hmmm… I have to check with my boss. Give me a minute…” Then you go away and find someone in the store that you have not complimented lately and tell them what a great job they are doing. After a couple minutes of insincere flattery, you may drift back, and with a seriously disturbed look on your face, say, “That price may be out of our reach. Are you flexible? What is your bottom line?”
If they say, “Pound sand, you rotten pirate! That was a great price I offered you!” and jump up to leave, you should quickly reply, “Sir, I said that price MAY be out of our reach but we might be able to accommodate you if we stretch to the very top of our spending limits!”
Play it by ear from there. Every person is different. Pay attention and pay it well.
Practice and come up with what feels good to you. Ask your coworkers for their ideas and keep what works best for you.
Be persistent and rephrase your qualifying questions. Sometimes they will answer on attempt number three or number thirty. It’s lazy to just ask once and then quote. You might as well not have asked at all. That’s a great way to make someone angry with what they think is a lowball offer.
Don’t let people walk easily. There are many things you can do to close a deal with a hesitant customer. Ask closing questions. Show you want it. We are not a free appraisal service, so don’t get used like one! Try these lines:
Follow up. If you don’t or can’t buy a good item (good item = something we can make a lot of money on), you can ask, “Can I have your name and number in case someone walks in looking for something like this? Perhaps I can pay a little more if I have a ready buyer for it.”
Check back with the customer. Show them we want it. Sometimes they just need a reminder to bring in the item. You can use hooks like “gold is up” or “gold is going down, get in now!” or “we’ve had some requests for items like yours, so we should be able to do a little better. Let’s take another look.”
Even better than number 7, if it is a good item, is to ask that they leave it so you can evaluate it further and possibly offer a better price.
Having the item with us puts you in control and keeps other jewelers from seeing it. Customers are more likely to let you buy it than hassle with picking it up. (Only do this with things you actually want to buy, not as a way to let them down easy for things we don’t really want.)
Of course, the priority is ALWAYS BUY it NOW. That way the deal is DONE and you have locked in your profit. Anytime you have NOT paid them, they can come take the item back.
DO NOT write down offers or prices on our business cards. Do not write down weights or descriptions on our business cards. These cards WILL be used against us when the seller goes to another jeweler. If they want you to write something down, then have them write it on a separate piece of paper. When you write numbers on business cards, it gives our competition definitive information about how we will buy the item, which makes it easy to turn the buy. It is best to give your card with the request that the customer call you back before making a final decision, with the promise that you will beat any offer if you can. You will need to know what was discussed, so keep a log on the Smartsheet with their name and a description and a note like, “We discussed $1000 for her 1ct plat solitaire.”
Do not “beat up” the item. Many buyers do nothing more than try to beat up the sellers’ items. “Oh, this stone is chipped.” “These are not popular anymore.” “People stopped wearing this style decades ago!” “This model is old.”
All these jabs do is to make the person feel bad. They may help to get the price down, but they don’t endear the person to you.
You really look bad when you say things that are known by the seller to be false, such as, “Oh, these old Patek Philippe pink gold world time chronographs with perpetual calendar are just not practical anymore!”
In fact, a good tactic is to build up one of their items as it brings about agreement between the two of you. (They want to think that their K-Mart closeouts are valuable.) “Oh, what a nice ring! It complements the finger bone.” Then later, “Did you see that the stone is chipped? Too bad because this is such a nice piece!”
It is OK to be nice and compliment the person on their or their ancestor’s good taste.
Simply be careful not to talk up the value of the items while being complimentary. It’s ok to say, “This is a pretty ring! It is interesting” or even “it is a quality piece.” Don’t say, “Wow the diamonds are absolutely perfect! This must be incredibly expensive!” Then the customer will think it’s worth a fortune and it will be your own doing!
Don’t speak poorly of their items.
Never tell salespeople how much you paid for it. In fact, if you tell them anything tell them you paid a lot for it! It becomes more valuable to them then, and in turn, they make it more valuable to their customers.
When selling to the store, get the item sold to Inventory quickly so you have the money back to turn over again.
Sometimes the urge is to take the easy route when buying and selling. Don’t do this! Take the route that makes you the most money the fastest.
Maximize both time and profit.
When selling outside the store, make the deal fast and ship it faster! Get paid quickly. Turn the money around as fast as possible.
When selling to a dealer, don’t take their first price without question. Always have an experienced person from our store look at the item to make sure we are selling it for the right value. Dealers are smart and will try to buy special items for dirt-cheap prices if they sense you don’t know the true value.
You should always cultivate new buyers (dealers) for things in case the old buyer stops buying and the retail store does not want it. You should know who buys what in case you get an odd item like a rare antique, exotic colored stone or an unusual watch.
Keep records of who buys what.
Some of our buyers will make deals happen by buying from other dealers and then selling to the retail store or even to other dealers. This “sideways” selling (wholesale to wholesale) can be profitable. But you must cultivate buyers and sellers weekly so even if “retail” sellers aren’t coming through the door, you’ll have sources for continuous business.
When you buy from dealers pay them quickly. If you are the fastest payer, your reputation will spread, and business will come your way.
If you find something that works, write it up and send it to me for inclusion in this policy. It will be appreciated.
Be clever and aware. Listen to the customer. Make friends. Say no more than you need to. Say the right things that lead the customer to you and not to someone else. Get the customer to like and trust you.
People do business with people they like. They like to do business with people they trust. Develop both in all your interactions with the customer.
Review the above often.