Our CEO, Zsolt Torok has started a video blog – called Next Level Jewelry – in which he will be talking about topics that can help jewelry business owners to get familiar with technology solutions for their business.
In this very first video blog, he is talking about why small jewelry businesses should invest in technology and automate repetitive tasks.
Is your business too small for using advanced technology?
While a small business can operate without much tech and without having to understand or invest in any technology, it can lose precious minutes and hours of every day, choking on paperwork and tasks that larger businesses already have automated. So in order to keep up with other, more efficient businesses, it is unthinkable at this time and age to do so without any technology at all, especially information tech - also known as IT.
Technology, and more specifically IT, is advancing at a great speed. The question is whether you want to understand it observe the trends and see the opportunities and possibilities, or you want to wait until it catches up with you – at that point however it will probably be too late for you to start using it and you will be left behind the curve.
The visible and the invisible aspects of using technology
On this channel, I will be focusing on specific aspects of information technology, with emphasis on the uses of technologies that can help your operations and sales. Also, we will cover IT news that may affect you or your business down the road so that you can be prepared for what’s coming.
In terms of technology, specifically from the business point of view, there are two aspects: I call them the visible and invisible aspects – one physical, tangible one that you can sink your teeth into, and another which is ghostly and elusive.
Visible aspects of technology are related to tech that affects what you are producing, thus shows up in your products – it shows in the quality and the workmanship. These can be clearly seen and acted upon.
Invisible aspects of technology are those that affect how you are producing – how fast you can design and manufacture jewelry, how much your margin is on your products, how efficient your business is, how good your communication is with your customers and clients, and so on.
While the visible aspects are very important, it’s the invisible aspects that usually make or break a business. So why is that?
The reason is that visible aspects are much easier to detect and control: if a casting has porosity, you can fix it, if a diamond breaks, you can replace it, and so on. You can create quality control steps for any issues that arise from production errors. Invisible aspects however are much harder to pinpoint: time lost due to inefficient communication, lost sales due to an inefficient sales process, reduced revenue due to inefficient production processes, and so on – these are all problems that require extensive research and observation in order to even see that there are problems, let alone coming up with effective solutions.
For me, working with over 200 jewelry businesses to date, I can attest that most of them have the visible aspects under control; however only the savviest of them have the invisible problems in sight, and even they don’t always see the full extent of their problems or are actively working on solutions.
Benefits of using a management system for your jewelry business
Your best chance to move ahead of other jewelry businesses (i.e. competitors) is to find these invisible issues and control for them or even better: find solutions. So how do you go about doing that?
Well, let’s break down the “obvious” invisible problems:
1. Speed and productivity issues: this is the most obvious; even though you may not know how your company measures up against others in terms of speed, you probably have a gut feeling whenever your production is slower than it should be. So again, while there are many visible ways to increase productivity, such as using CAD software, 3D printing, faster computers and so on, what really makes the biggest impact are things such as tracking and quantifying the steps of the production process, the amount of labor used, the efficiency of individual employees, so that the entire process can be holistically understood and managed.
2. Just-in-time inventory: a visible inventory management process is straightforward: you need a specific type of small diamond, let’s say a 2mm round VS1. You open the storage box or drawer containing this type of diamond, you look inside – it’s empty. Now you have to place an order and buy more. This is a straightforward process, but also inefficient since now you have to wait for the diamonds to arrive (or anything else you may need). A better – but invisible – way of doing this is if the diamonds are ordered so that they arrive exactly at the time you need them for. The right system can do this. Another advantage of just-in-time inventory is that you don’t have a pile of diamonds sitting in a drawer tying down your money – you can use that money to procure better equipment, software or whatever makes things go better for your business. You could even use it to increase your sales by investing in online marketing for example.
3. Minimizing human errors: a well-known fact is that humans make mistakes. While mistakes can be annoying, they can also have a great impact on the profitability of a company. If you have a complex production process, the chances are great that something will go wrong somewhere, resulting in a delayed order and possibly an angry customer. If that customer is pissed off enough (as some are) they can voice their dissatisfaction on the Internet with a bad review – thus a simple thing like a CAD or casting mistake can snowball into thousands of dollars of lost revenue and a lot of bad publicity. While it is impossible to eliminate human errors, it is possible to control most of them by automating quality and delivery time controls, as well as establishing error correction routines and protocols.
4. Faster, better, data-driven decisions: numbers don’t lie; that’s another fact. You may think that since you run a small business you have a complete overview of everything and making the right decisions, always. While this can be true in some cases, it is much more likely that you are making mistakes, you just don’t know about them because you are basing those decisions on bad or insufficient data. If you have access to the relevant data in real time in an organized and transparent way, you can undoubtedly make much better decisions. Thus integrating all your business data in a way that makes sense for your business and existing processes can make the difference between a good decision and a decision that can haunt you for a long time.
5. Better customer service: it is imperative for your business that your clients see it in the best possible way – after all, when it comes to jewelry, your customers buy the experience too, not just the product. As such, interaction with the customer, whether pre-sale or post-sale, is also very important. For example, can you show/explain your customers in detail how their jewelry is made? Can you provide them with an instant quote for customizing a ring? Can you tell them the exact day when their custom jewelry will be delivered? Are you providing them with real-time status updates? I know that if I am buying a 50-thousand-dollar custom ring I want to know even the name of the designer or of the goldsmith doing the engraving. Can you give them this information without them asking? If yes, great – you are one step closer to customer service Nirvana; if not, I will show you how to do that in one of the later videos.
6. Boosting your online sales: online sales these days affect anyone who sells any kind of product. In fact, if you are not selling online, you are missing out on serious profits. This is especially true for jewelers, who are seeing a big portion of what used to be face-to-face sales move online. Companies like the Blue Nile and Brilliant Earth for example only sell online; others that used to be brick and mortar like Zales, Jared, Kay, etc. are increasingly selling online, followed by titans like Walmart, Amazon, etc. Even small, forward-looking shops are establishing online presence via easy-to-use web shops like Shopify and Etsy. So if you are not involved in online sales yet, you are being left behind. Yes, online sales can be challenging, especially if you deal with custom jewelry, but with the right approach, it is entirely manageable and superbly profitable. I will show you how to do that in one of the videos as well.
7. Freeing up valuable time: technology and automation of processes can be of significant help for small businesses, freeing up valuable time that is otherwise spent with non-value-adding activities. Anything that does not add value to a product or service should be automated to the largest extent possible – from creating price quotes to keeping customers updated with the status of their orders, to invoicing and shipping – anything that does not explicitly create value should be automated if it cannot be eliminated altogether. Things like calculating prices by metal and diamond markets, timekeeping, data entry, payment processing and other administrative activities – of which even small companies have by the dozens – can be done without much human intervention. The end result is the same: more time available for getting new customers and spending valuable time with existing ones. That is what makes a business valuable and profitable. Like Marcus Aurelius, the last “good” Roman Emperor said nearly two thousand years ago: one should spend his time with being more social, as men are social by nature; and anything not in accordance to its nature is, you guessed it, not natural. So let’s free up some time to focus on what matters most: the customer – I’ll show you how.
8. Increasing competitiveness: companies that recognize the value of technology and invest time and money into understanding and implementing technological improvement will always find themselves enjoying a competitive advantage over those who don’t, the ones that ignore the possibilities technology has to offer. Higher efficiency, growth, new opportunities are all ways or businesses to thrive and remain competitive. Did you know that large companies like Apple and Google invest 24 percent of their revenues into researching and developing new technologies, while most other companies invest only 7 percent on average? And that is exactly the reason why they are leaving all other companies in the dust when it comes to growth and profitability. So whether you invest that time and money, as much as you can sensibly afford, into technological improvements, will shape the future of your business more than most other decisions you have to make. Throughout history, new technologies offered a stepping stone (or sometimes a ladder) and those using them first usually ended up winning and moving up, while others withered, died and disappeared from memory altogether. Going back to the online example, there is a huge difference between being one of the first 100 stores selling online, or being the thousandth years later, when the market is already distributed between the first few dozen companies and saturated.
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Do you want to learn all about how to increase your delivery times and improve your processes, how to manage your inventory automatically, how to minimize errors while making faster and better decision as you are providing exceptional customer service, boosting your sales by creating and managing an online presence, freeing up time to work with your customers while increasing your competitiveness?
If yes, please like and subscribe to our channel, where I will bring you more videos on how you can do all this while leveraging information technology.