You've Got It Made
As the custom-work market continues to grow, more jewelers are returning to the bench to take business into their own hands.
Joel McFadden started out as a bench jeweler in his grandfather’s Charleston, S.C., store in 1972 and has come full circle professionally. He recently traded his traditional retail jewelry store for a custom-design business, where he creates unique pieces tailored to his clients’ preferences.
McFadden is part of a growing movement of jewelers who are reconnecting with their creative sides. At a recent panel discussion in Chicago, jewelry store owners detailed the benefits of replacing vendor lines with their own handiwork. The move lessens the burden of costly merchandise overhead, reinforces store brands instead of vendors, and renews the level of fun for jewelers, many of whom became bench jewelers because they loved to make jewelry.
Custom-only or near-custom-only shops offer “fictional” inventory (because jewelry pieces are not yet made, and those shops that do are often called virtual stores) or feature designs crafted by store owners. To minimize financial risk, many store owners offer a mix of vendor-supplied and store-made designs—though the scales usually tip in favor of the former.
Alexandria Matossian’s cufflinks in 18k gold and green quartz. Still, amid signs of customer fatigue with mass-produced products, the growing market for customization offers opportunities for jewelers who offer custom design work, from sketches to finished piece. “A niche in custom isn’t going to create a multimillion dollar business, but it provides for a healthy bottom line,” says Greg Stopka, owner of JewelSmiths in Pleasant Hill, Calif. Stopka served as one of the panelists in Chicago and runs a virtual store. “The whole world is moving toward customization,” says Jim Tuttle, another panelist and the owner of Green Lake Jewelry Works in Seattle. Tuttle believes he sees a cultural custom zeitgeist in motion, citing the popularity of products like Nike’s NIKEiD custom sneakers. “Why buy one off the rack when you can get one customized?” Only 10 percent of Tuttle’s store inventory, including basic chains, is vendor-made.
“Jewelers are so quick to whip out mounting books and call that ‘custom,’?” says Babs Noelle, owner of Alara jewelry in Bozeman, Mont. “Many under-estimate the appreciation they’ll get from customers who’ll have a design that no one else is wearing.”
Costs Down, Profits Up
Four years ago, Joel McFadden ran a traditional 4,000-square-foot store with a staff of 11 in Greenfield, Mass. He carried popular lines like Hearts On Fire, and his average ticket price came in around $800. But when the economy started to tank and his average ticket price plummeted to $300, he and his family decided to start fresh by relocating to the Garden State.
McFadden held a going-out-of-business sale to help him pay off debt for the 12-year-old business that carried a minimum of $500,000 inventory. “I had a line of credit and a bank loan to keep operating,” McFadden recalls.
But this time around, he wouldn’t need the inventory since McFadden aimed to operate a completely different kind of jewelry business: custom.
Alexandria Matossian’s Eternal Vines ring with a half carat round brilliant stone and .11 cts. t.w. meleeInspired to give it a go by other custom-only jewelers he’d met in online forums for Matrix users and at a Matrix user convention in 2001, McFadden set up an 880-square-foot shop with the same name in Red Bank, N.J. He positioned three benches in the front window, providing customers with an ideal view to watch his designs come to life. “It’s important for them to see me doing the work here,” says McFadden.
Today, Joel McFadden Designs helps customers create one-of-a-kind rings, pendants, earrings, and wedding sets in platinum, gold, silver, and other metals—and McFadden is having a blast doing what he loves. His operating costs (excluding payroll) have dropped by half, his gross profit margins have nearly doubled (because his work can’t be price-shopped anywhere else), and inventory cost is zero dollars because he doesn’t carry anyone else’s work. Net profits have also increased by 25 percent.
“We’re doing half as many gross sales as before, but we’re making more profit,” says McFadden. With just three full-time employees and one part-timer, McFadden and his wife have flexible hours permitting ample beach time and play dates with their 9-year-old daughter.
Perhaps the biggest change is for McFadden’s wife. “She doesn’t stay awake at night now wondering how we’ll make our next Hearts On Fire installment,” he says.
From Trade Shop to Studio
When Greg Stopka’s father became ill more than 30 years ago, the good son abandoned an assistant manager post in a racquetball club to help run the family jewelry store. But after five years, Stopka went out on his own, opening a repair shop called JewelSmiths in Pleasant Hill, Calif., loosely modeled after Fast-Fix Jewelry and Watch Repairs.
Ten years into a business built on fixing broken chains and resizing rings, a customer came in and changed everything. A man commissioned a ring for his wife (a rarity in those days), and when he came in for the design unveiling, he saw the excitement on Stopka’s face as he explained how he made the piece. But he also noticed the uninspiring surroundings: cleaning agents on open shelves and drab countertops facing the front door. He asked Stopka, “You enjoy doing this, don’t you?” His advice: “Let other customers know. Put up pictures of designs on the walls to advertise custom offerings.”
Now 25 years later, Stopka has done just that and more. For starters, Jewel-Smiths looks like a creative, working studio, with slate floors, slide shows of designs on LCD television screens, pictures of designs on the walls, and cushy ottoman seats. The environment, says Stop-ka, “gets people in the mood of being able to put together a custom design. The pictures help presell the design process.”
He also invested in a CAD/CAM program called Gemvision Digital Goldsmith, which allowed him to double his design business in six months. In the past 15 years, Stopka’s average customer sale rose from $150 to $450 because of the possibilities available with CAD/CAM technology. “It’s freed me up to be more creative,” he says.
Joel McFadden’s restoration of an antique ring
Most of Stopka’s inventory is still in his mind; he doesn’t buy an ounce of gold until a commission is made. Shoppers draw their inspiration from images of previous work, the 3-D renderings available in CAD/CAM technology, and a few live models in brass and glass. He bills alterations as restoration, not repair, because of the extras, like adding more stones, allowing him to sell through the 2-D photo CAD rendering process in Digital Goldsmith. Other perks are more personal: an extra day off per week and three times as many vacation days. “And when I’m off, I don’t even think about the business,” he says.
In California, the thick of foreclosure country, Stopka shuns big diamond sales in favor of his own ideas. “I make more money on the design,” he says. How much more? “Fifty percent more than selling something out of a case,” he says. “With custom, there’s no restriction of a price tag to look at.”
Customer relationships are also a big part of this business. Barbara, a well-dressed, properly primped 70-something widow, whose son made a mint in high-tech, visited Stopka regularly for a “pick-me-up” purchase. “‘Greg, I want to be happy again,’ she’d say,” recalls Stopka, who made her 15 pieces over 12 years. The last was one of his favorites: a five-stone ring featuring bezel-set colored gems in palladium and 18k gold. Four months after she picked up the piece, Stopka got a call from her daughter-in-law. “She told me that Barbara had passed away a couple of months earlier,” says Stopka. “She was a great soul, and I’ll always remember that ring.”
All in the Family
Thirty years ago, Hagop Matossian opened Hagop Settings, a jewelry repair shop, in Boston. His specialty was creating one-of-a-kind pieces, including diamond engagement ring mountings to accommodate oversize center stones, for stores that didn’t have in-house design capabilities.
A diamond and 18k gold ring by Kelly Jensen of Plateau Jewelers
But nine years ago, two major events drastically shifted the course of the business. First, Matossian’s wife and now creative director, Alexandria, joined Hagop and his brother Barkev in the shop, abandoning her own one-woman custom business on the lower level of the same complex, and brought with her an unstoppable drive to take on more challenging custom jobs. Also, Hagop’s father, a longtime goldsmith who owned his own retail store, imparted some advice his sons couldn’t ignore. “He said, ‘You’re getting older, and you won’t be able to work with your hands your whole life, so open a retail store,’?” Matossian recalls.
Armed with his wife’s enthusiasm and his father’s wisdom, Hagop opened Bostonian Jewelers as a retail store, while Barkev continued to run Hagop Settings to accommodate the volume of wholesale repair jobs they’d developed. On the retail side, aiming to expand their restoration work, Hagop and Alexandria (ahead of their time in 1999) checked out the capabilities of a CAD/CAM. They instantly knew the technology could revolutionize the manufacturing of jewelry. Still, notes Alexandria, Hagop didn’t immediately take the bait. “I pestered him for three years to buy Matrix,” she says.
Once the purchase was made, the payoff was immediate. Handmade jewelry models in platinum were no longer necessary since digital models were stored in Matrix. That move alone freed up thousands of dollars, eliminating dozens of platinum models that sat in a safe for future use. Also gone were the stacks of stinky, wet silicone rubber molds, waiting “in limbo” to be employed to make more models.
The technology also broke the rules for jewelry fabrication, streamlining efficiency and profitability. For instance, when making a ring that will weigh 12 grams of metal, jewelers must start with double the material to account for shaping, fabrication, and waste; the latter is now eliminated, thanks to CAD/CAM design. “With rapid prototype casting, you can go from print to wax with no waste,” says Hagop.
And Alexandria is making more than just diamond engagement rings. Business in bridal necklaces, cuff-links, and similar items has risen drastically since the changeover. “I am a lot busier,” she says. For example, she made a pair of 18k gold cufflinks with green quartz as a birthday present from a woman to her fiancé. Alexandria recalls another commission fondly because of the customer’s instructions: There were none. “He told me to make anything I wanted,” she remembers. His only stipulation was to consider one aspect of the female recipient: She worked with her hands. The end piece was a five-gram platinum band featuring vine motifs and a half-carat, bezel-set diamond center stone provided by the client.
With business brisk, Bostonian Jewelers got a facelift last year. Stainless steel and glass accents now give the store a contemporary look. “It’s yummy,” enthuses Alexandria. All jobs are completed onsite in the 2,000-square-foot space, which is a 60–40 split between showroom and workshop.
Bostonian’s custom capabilities are so streamlined, efficient, and profitable that the company even makes its own wedding bands—plain metal ones that most shops tend to order. “In 10 minutes, we can make a simple band in CAD/CAM for 30 percent less than the cost of ordering one from a vendor,” says Hagop. Other benefits? Cherry-picking custom components across a variety of jobs, clean casts (no investment mess), and no torching necessary. “This is the difference between the old school and the new,” says Alexandria. “You can really push the envelope of design.”
Fitting In, Feeling at Home
As a college student, Babs Noelle sold silver jewelry in a hair salon in Houston. Inspired to pursue more education, the present-day owner of Alara Jewelry in Bozeman, Mont., moved abroad to study goldsmithing. After acquiring a master jeweler degree from a university in Germany, she moved home to Texas and set up shop, but struggled for years to make the rent. “There were times that I was definitely eating beans!” she remembers.
Altimeter cufflinks in 18k gold made by Babs Noelle
She made the best of an unexpected move to Colorado and soon discovered it was a better market for her custom work. She supplemented her own handiwork with lines from others, including German designers like Quinn and Burkhardt & Bischoff. “I needed an additional profit stream,” she explains.
In Denver, Noelle’s 700-square-foot store was in a retail-friendly part of the city, but it was tucked away off a main thoroughfare. Every day, Noelle went to work in tailored pants and heels, making mainstream designs like diamond engagement rings for upper-middle-income clients. “I didn’t have the deep pockets for advertising,” she says.
At the same time, she and her husband maintained a second home in Bozeman, where they escaped during holiday breaks. When they decided to make the small Montana town their primary residence six years ago, Noelle set up a new shop there, doubling her business within the first six months. “Sales improved 80 percent,” she says.
In Bozeman, Noelle took advantage of cost-effective philanthropic opportunities, like donating a diamond for a silent auction to the nearby Museum of the Rockies and even made dinosaur-inspired custom designs for resale in the gift shop. The moves put her name in the public eye and upped her business. One piece she made—an 18k gold owl pendant with green diamond eyes—sold at a museum-sponsored auction for $3,500; the following week, she received two new orders for replicas in her shop.
Today, her space is twice as large as what she had in Denver and it’s located on the town’s main street. Her dress code has also changed; these days she tends toward blue jeans, cowboy boots, and a custom-made steel belt buckle she purchased from another local artist. “In Denver, I tried to be what I thought others wanted me to be,” she says. “In Bozeman, I’m myself.”
Now, six years after her move, business continues to increase because she’s filling a niche. Local customers needed an in-town jeweler to remount stones—a seemingly simple task that other shops didn’t want to do. Taking on those jobs led to more intricate gigs, including some that felt more like therapy sessions than design requests. But in custom, listening skills are a top priority. “It’s not about bench work, it’s about people work,” says Noelle.
She recalls a 60-year-old woman who entered her store and began emptying her pockets full of plastic bags loaded with sapphires. She removed multiple rings from her fingers, also laden with sapphires, and gave an impassioned explanation in the process. As Noelle tells it, the woman said: “My husband died and I’m pissed. We were supposed to have 30 good years left! And I’ve got all of these Montana sapphires he mined and never did anything with.” The woman requested a thumb ring design that would represent her “bumpy, lumpy, and curvy life.” “Most important,” adds Noelle, “she needed it by a certain date because she was going skydiving with her sister to spread his ashes.”
The Smarts on Intellectual Property
Whenit comes to custom work, you aim to please the customer. Just asessential, however, is protecting your designs—and not infringing onanyone else’s. JCK turned to Peter Nikolai, a partner with law firmNikolai & Mersereau, for advice. He recommends checking with theU.S. Patent and Trademark Office and the Library of Congress beforetaking on custom work. If your design is in the clear, be sure toregister a copyright with the Library of Congress. Below, Nikolai helpsbreak down the legalese that comes with patents, trademarks, andcopyrights.
Patents
Designpatents are most applicable to original jewelry creations. While apatent is the most powerful form of intellectual property protection,it is also the most expensive (average costs run from $10,000 to$20,000), and it can take roughly two years to secure. Anotherdownside? Patents are term-limited: Design patents last only 14 years,utility patents 20 years. After that, anyone can produce and profitfrom the design.
Trademarks
Trademarks protect a store logo or tagline. A trademark registration is much less expensive than a patent, iseasier to secure, and has a faster turnaround. Depending on the numberof goods being registered, trademark costs range from $1,500 to $2,000(the more goods, the higher the cost based on government filing fees).It takes about a year to obtain trademark registration.
Copyrights
Acopyright protects against copying an original idea, but does not guardthe idea itself. This makes it harder to enforce and open to widerinterpretations. (Damages in a copyright case can be difficult toprove.) That said, a copyright is “the lowest risk and highest yield”of the three options, says Nikolai. Copyrighting an original design cancost as little as $90 to $200, which protects you for the rest of your life—and an additional 75 years. —Paul Holewa
Putting It Together: Tips for Setting Up ShopSnap Photos of Your Designs For Your Store
Hang photos to display your designs.
Witha digital camera, store owners can document every stage of a design anddecorate interiors with prints. “Take pictures of everything so youhave a portfolio,” advises Jim Tuttle, owner of Green Lake JewelryWorks in Seattle, Wash., who’s burned through one digital camera a yearfor the past 10 years.
Fourteenyears ago, Kelly Jensen, president of Plateau Jewelers in Sammamish,Wash., had no photographs of his custom work and no means of showingprospective clients his capabilities. But he bought a light box and acamera and started snapping away, filling two albums with 60before-and-after photos of restorations. He’s now filling his thirdbook.
Portrait-sizeprints of recent jobs, along with handwritten notes from new owners,line the walls at Joel McFadden Designs in Red Bank, N.J., and PlateauJewelers. Meanwhile, Jensen aims to take the idea one step further withlighting that directs attention to the framed designs. He’s alsocompiling images for a DVD to play on flat-screen TVs in the store,just like vendors.
Invest in the Technology
Show customers custom options.
Manyjewelers rely on Gemvision’s Matrix 3-D jewelry-design software, Rhino,and even Pro/ENGINEER, a program used to design jet-engine parts, tobring designs to life. Countersketch, designed for ease of use byconsumers and sales associates, is a newer technology that allowsjewelers to bring custom-design capabilities into stores with help onthe back end from Stuller, which fulfills orders.
WithMatrix, for example, a doodle drawing was incorporated into anengagement ring at McFadden’s shop. And in Jensen’s store, the toolhelps minimize the waste that sometimes accompanies hand-carved waxes.CAD/CAM programs also allow for more precise design elements. Expect topay anywhere between $995 and $8,000 for the latest techology.
Listen to Your Customers
Ask customers for feedback.
Customjobs can take a wrong turn when customers aren’t involved in everyaspect of the design. Of course, it’s a challenge to listen whensuperiors won’t let you speak to clients. That’s what happened toTuttle more than 14 years ago as a bench jeweler in a trade shop inAtlanta. He made a ring according to the instructions of asalesperson—not the client. Tuttle finally got to meet the customerwhen she wasn’t satisfied with the piece. “It was boring and ugly,”recalls Tuttle, who made the piece with bar-set stones on the sides.The final ring featured a hand-fabricated center mounting and flush-setstones, and the customer loved it. —JH
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