The Absurd Reality of Jewelry Financing
by Michael Fruchtman, CEO Fruchtman Marketing
This is a story about absurdity.
Where anyone can walk into practically any car dealer in America. If they have a decent job, credit and pulse, they can get a loan and financing up to 5 years for an automobile that is likely over $20,000. This automobile will depreciate immediately when you drive one mile off the lot. Not only will it depreciate, it will become outdated as fast as you can say “next years model” and require an endless supply of your hard-earned money for on-going repairs.
Compare this to the jewelry industry – which relies on some of the most antiquated financing options known to man and a group of target customers that need it most – your bridal customer. Retailers offer 90 days same as cash; extended payment plans all resulting in very high double-digit customer denials. If you’ve experienced telling someone across the counter they’ve been denied, it sort of kills that happy, excited mood across the counter. All for a product that not only holds its value – but, can actually increase its value as the years’ progress. In addition, a good finance plan will actually help you sell bigger diamonds! And as stories go, what a novel idea.
So, this is really a story about reality.
The reality of an industry which has done a pretty, shoddy job of educating the financial sector. An industry that is so lackadaisical, it prefers to accept the same old same old, versus a simple scratch of the head and say “why not”? Perhaps it’s time to challenge the financial sector. What’s the worst that can happen? You’ll sell more diamonds. You’ll sell bigger diamonds. You’ll make more money. Banks will make more money (not that I’m holding a benefit for them). Sightholders will smile. The bride will really smile. The groom will be relieved. And we can all live happily ever after.
The end.
What to engage in more discussion about financing? Email suits@fruchtman.com.
By Fruchtman on February 16, 2010 :: Filed under Think
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February 16th, 2010
Hi, Michael,
Chances are….it’s easier to re-posses a car than it is to take back an engagement ring (if you can find it).
I agree with you though….there’s got to be a better way of getting those younger buyers financed.
theresia
February 19th, 2010
Theresia,
You might be right but, people will work harder to hold on to their engagement ring. It’s also very inexpensive for a bank to insure the ring and most of them have insurance divisions anyway. By doing that, they really have no downside! And they build a relationship with young people for the future.