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The Margin MeltdownSM
Why Branding is Not an Option
Unique Market IdentitySM
Advertise or Vaporize
Meet Our Press
Watch The Commercials
Who We Are NOT!
Let's Win Together!
Contact LegUp Marketing
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What happens when competitive sources increase like matches in a box, get struck with the friction of changing consumer perceptions, and get thrown into the gasoline of higher finished diamond prices? The retailer's net profit margin experiences THE MARGIN MELTDOWNSM!

A) What's Fueling the Fire...
B) Here's Where It's Going...
C) What Do You Need?



A) What's Fueling the Fire...

Whatever happened to that good old markup you once knew? Today, you have new and non-traditional competition like:

  • The perceived savings on the Internet,
  • The perceived savings at warehouse membership stores,
  • The perceived savings on TV shopping channels,
  • Most recently, DIAMOND MANUFACTURERS-TURNED-RETAILERS!
  • Not to mention the "fancy stores" and all the other jewelers in town.

If consumers think they're buying an equivalent quality diamond for less through any of these channels, what choice do you have but to lower your prices, even on better quality inventory?


You could have a "sale" or two (or four, or twelve)... but constant "sales" reduce the quality of your inventory to "commodity" status. It's an enticing quick fix, but in the long run, the advantages disappear. More sales at lower prices make you work harder for nothing more than what you've already got!


IT'S A MARGIN MELTDOWNSM!



B) Here's Where It's Going...

The jewelry trades have headlines that essentially shout "Volume is Up, but Margins are Down", and the trend is continuing.

The trades talk about the growing trend of branding ... but they're really reporting on promotion of branded products from the manufacturer. It could be you're a small retail store that can't or won't sell branded products from the manufacturer... so what kind of branding can you do?

If you're a retailer that's big enough to even be in the game, the manufacturers want you to sell their branded diamonds. Aligning yourself with a manufacturer of branded diamonds may at first seem like a way to build customer loyalty. But loyalty to a brand does not necessarily translate into loyalty to you. Eventually those loyalties will come to favor the manufacturers' brands and not the jeweler.

Let's talk more about these manufacturers and wholesalers. Many small independent jewelers have long depended on diamond wholesalers or manufacturers to protect them as retailers of their product. You could call a wholesaler to get a quote on a diamond that would make you competitive in your market. But no longer. Now, many wholesalers are taking their business directly to the Internet, and their online quotes become more competition to you! How long before the manufacturers start doing the same? When the wholesalers and manufacturers start becoming your competition...


IT'S A MARGIN MELTDOWNSM!



C) What Do You Need?
"Where a Really Great Diamond
Doesn't Cost an Arm and a Leg®."

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