Their names are familiar to most people. Even a mention of some brands can evoke feelings of wealth, status and history. Carrying luxury brands in your store has many positive benefits but can also be problematic. The decision to stock high-end brands is one that should not be taken lightly.
What “luxury” comes in your mind?
The benefits
- Status
Many luxury brands are familiar to your customers. To have them in your store can elevate your status, raising your store to a level above the competition. This will bring in new, well qualified clientele.
- Newest styles
Luxury brands are always at the forefront of fashion. As fashion leaders, they never need to play catch-up. Your store will always have the newest products in the market
- Support
Most brands have well equipped repair centres with factory trained technicians. They make it easy and cost effective for you to provide excellent customer service.
- Marketing
Major brands spend millions of dollars to make sure their name is well known. They have the financial strength to purchase prime advertising space in all media. Most brands will assist you in your own marketing efforts with camera-ready artwork, ready to use video and radio spots and may even co-pay your own advertising.
- Trust
Consumers believe that brand names stand for high quality. They trust the products and the company. If you have these brands in your store, you can share in that trust.
The downside
- They are expensive
Most brands are sold at higher price-points than comparable non branded items. It takes a bit more sales technique as you must sell the quality and name over low process.
- Inventory costs
Most brands require a minimum buy-in. For many brands, especially fine watches, this can be as much as a quarter of a million dollars. You will also need to maintain certain inventory levels and may be required to stock new styles, even if you don’t need more inventory.
- You give up control
Luxury brands are a very competitive market. You may be told which other brands you can or cannot stock. You may be required to allot a certain amount of display space to a single brand or even be required to remodel your store to meet their idea of a proper selling space.
- You can become brand-dependant
Luxury brand names are fully aware that you need them more than they need you. Even the slightest failure to meet all of their contractual demands could result in being dropped as an authorized seller. If most of your inventory and marketing budget is tied up in the brands and they drop you, you may be out of luck…or even out of business.
How to decide
Before you buy into any brand, do your homework. Talk to you customers to see how they feel about different brands. Speak with other jewellers that carry the brand. Are they happy or are they having problems? Read your contract carefully and consult with an attorney so you are sure of what you are agreeing to buy and do to obtain and keep the brand.
Brands can make or break your business. Only you can decide if they are right for you.