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RF MOELLER JEWELERS: THREE STORES AND ONE MONEY PIT (SO FAR) | March 13, 2013 (0 comments)
Minneapolis, MN--It's a good thing business has been strong at R.F. Moeller Jeweler because when The Centurion Newsletter caught up with Mark Moeller (left) to talk about his company, he was up a ladder. Literally.
"We bought a house in Florida a few years ago," said Moeller, back on the ground. "Working on it is my hobby. I call it the money pit."
When not in Florida working on the house, Moeller says business is pretty good in his three locations (St. Paul, Edina, and Minneapolis) in Minnesota. "November, December and January were phenomenal, February was a little slow, but the last week [in February] was strong."
Moeller says his business has been "crushing" our numbers in the last few months, compared to years past. But despite enjoying good business, Moeller is aware of economic uncertainty many of his customers feel. “All that crap happening in Washington isn't helping," he says. He blames both sides and fear of the unknown for the unrest.
RF Moeller Jeweler in Edina, above, and St. Paul, below.
Interior of the St. Paul store.
Moeller feels his company has successfully navigated the recession in the last two and a half years coming out of the recession. 2011 showed a 25% increase in business. Last year was a little flat, up 3%. "The good news was that our profits doubled to 10%. We work on maintaining margins, being competitive and looking at every opportunity to make a buck," said Moeller.
The Minneapolis store.
The marketing. "Our marketing has changed dramatically. We've been on the front side of the web. What I'm learning is that it's a daily occurrence. We want to be interactive. In order to do that, we've got to be on top of it every day. We had a new website three years ago and I just budgeted $100,000 to redo. 60% of our business is diamond. We know that 100% of customers shopping for diamonds have been online before they come in. They see our website first. If you want to drive people to your store, you've got to have a web-based marketing program over and above what your competition is doing." Moeller, until recently, maintained his website in-house. He lost his webmaster about a year ago and hired an outside company. Then fired them. Now Moeller has a new web company.
"It's a one-person company in tune with what I want to accomplish," says Moeller. "We're extremely focused on conversion [turning web visitors into actual customers]. We get them at the website, get them in the door and see how that works." While RF Moeller Jeweler does not offer an option for purchase on its website today, when a visitor finds a piece they like, they are invited to "Ask RF Moeller Concierge" or "Send to a Friend" that sends an email link to the email address of the visitor's choice.
RF Moeller's homepage.
RF Moeller Jeweler, along with its website, has a strong Facebook, Twitter, and Pintrest presence.
And other marketing channels? "We still do lots of traditional radio along with Rolex ads for broadcast TV (not cable). We're happy with the increase in business from the ads. We don't do print [ads] any more." The jeweler also is somewhat famous for its YouTube videos.
Below, the company's Pinterest page.
The inventory and re-orders. "My son James, our director of operations, manages inventory," says Moeller. "We do more with less inventory. And we have to have the right inventory in stock all the time. We do constant re-orders, bi-weekly for Rolex, weekly for most everyone else. And we re-order daily if needed. Our inventory system is ARMS; we adapted it for our own system. Our CFO crunches data exported from ARMS. If we spend a dollar, we try to get a dollar back on profit. It's a daily job."
Along with keeping an eye on margins and current inventory, Moeller has started to manufacture his store's own merchandise. "We started to manufacture our own products overseas and found that to do it in-house was much more efficient. Manufacturing our own good is very important; it helps us maintain our margins. We manufacture across the board, and focus on bridal. The Alyssa collection is our own brand."
Moeller uses CAD (computer aided design) and says his shops are state of the art. "We're capable of doing everything," says Moeller. "We have a 3-D printer now, a milling machine slated for next year and we'll ratchet that business up in the next 18 months."
And the commissions. More than 20 years ago, Moeller made headlines in the industry when he began paying employees on commission only -- it was a revolutionary move at the time, and still stands out today from the majority of jewelers who pay only on salary or a combination of salary and commission. "If my people don't sell, they don't get paid," said Moeller. "They get paid for making the sale. And they get paid substantially higher than sales people in the industry but they earn it."
And what sort of training does Moeller offer his commission-only staff? "Non-stop in-store sales training," he says. "We just realigned the sales position. The manager of our downtown store is taking it over. We do training daily: product training, gemological training, all sorts of training every single day. We have an outline and a schedule for training. Usually it begins at 8am and runs for two hours. If we have a vendor in town, they'll do the training."
Of RF Moeller Jeweler's 29 associates, about half are sales. "Others are support staff, five goldsmiths, and two watchmakers."
"We sell sophisticated products to sophisticated clients, so you have to be a sophisticated sales person," says Moeller. "People [customers] think they are experts and you need to be an expert when you stand behind the counter."
RF Moeller Jeweler is open 10am-7pm Monday thru Friday and 10am-5pm on Saturday. "We're not open on Sundays," said Moeller. "It's too much for now. I had a consultant tell me that if you only are open 9am - 5pm during the week then you're catering to the unemployed. I've never forgotten that."
The future. "Before I die," said Moeller, when asked about any timetable he has to retire. Aside from working on the Florida money pit, Moeller "is in the store all the time. I've gifted a significant portion of the business to my sons and brother for tax purposes, so I'm not the sole owner anymore, but the majority shareholder. In five years I'll start backing off and in ten years, retire."
And then what? "Buy and move to another money pit," said Moeller with a smile. "And hope my wife will still let me on a ladder."
