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David Geller

5 Spiffs That Will Make Selling Fun in Your Store

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Friendly competition can excite your sales team and increase profits

Americans love competition. Sales games and contests in a jewelry store can spark excitement among your staff and thus increase sales.

Sometimes, the only difference between a good salesperson and a terrific one is their level of excitement. The client can sense this and will become even more excited about buying their new piece of jewelry from your store. Here are some contest ideas that are fun and encourage friendly competition among your sales staff.

1. Pass The Buck. Tack a $20 bill to the bulletin board. The first person to make a sale that day gets the $20 bill. The next person who makes a bigger sale takes the $20 from the previous person and holds onto it. The person with the biggest sale at the end of the day gets to keep the $20!

2. A Buck A Try On. Your job is to get your goods out of the “vault” and onto the customer’s fingers, neck and arms without them asking. Here’s the plan: Every time a salesperson gets the customer to try on a piece of jewelry, the staff member gets $1.00. Not right then and there; at the end of the day. For each additional piece the customer tries on, the salesperson gets another buck. It doesn’t matter if they buy it; they just have to try it on.

“Would you like to see a matching bracelet that would look great with this ring?” If it gets on the lady’s arm, bingo — another buck!

3. Balloon Pop. Set out specific goals for a weekend or week. It could be:

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  • Sell a watch
  • Sell a red dot (old) item
  • Any repair over $50
  • Any sales over $1000

Make a list of prizes that you’ll give away if the objectives are achieved. It can range from monetary rewards to dinner, a movie, a day off, food, appliance, etc. Write each one on small pieces of paper, fold them and insert in balloons and blow them up. Tape them to a board and when a sales associate achieves a goal, let them pop a balloon and get their prize. The popping sound itself drives excitement! 

4. Jewelry Store Poker. Buy a deck of cards. On paper, make a list of aged items in the store you want to move with short description and SKU number; vary the merchandise by prices. Cut up the paper and tape or glue each description onto playing cards. Place all cards with descriptions face down on a table and let each staff member choose a set number of cards.

As each salesperson sells their items, they turn in their cards and they are tacked to a board with their name on the cards. The person who turns all of their cards in gets a fantastic prize, which we hope is everyone. If the contest ends and no one has sold all their items, give a smaller prize to the person who sells most of their cards. This contest can run over a week.

5. Bag of Goodies. Type up a list of sales goals you want your staff to achieve (see above for examples). Buy 20 to 40 prizes. Gift wrap them in boxes and put all items in one great big bag.

As each salesperson achieves a goal, hold the bag open and let them pull out a prize and open it. To get the chance for another prize, they have to achieve another sales goal. 


David Geller is a consultant to jewelers on store management. Email him at dgellerbellsouth.net.

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This article originally appeared in the March 2017 edition of INSTORE.

 

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David Geller

This Small Yet Logical Fee Can Add Big Profits to Your Bottom Line

This small yet logical charge can add big profits to your bottom line.

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I’M GOING TO GIVE you a tip that will make you $29,400 right here and right now. Here’s how:

Let’s say you take in 4,000 jobs a year. Of the 4,000 jobs, 75 percent of them (or 3,000 jobs) have five or more stones in them.

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Gene the Jeweler’s Rule: Never Buy the Same Piece Twice
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In your shop, you check and tighten up to four stones on any job, no charge. But if a piece contains five to 20 stones, you charge an extra $28 to check, tighten, and retighten if they get loose within 12 months (or replace melee if they fall out within the next 12 months). If there are 21 to 35 stones, you charge an extra $35.

This is worth it to both you and your customer.

I don’t care if the stones come in loose or tight, you charge the fee because you are on the hook. Whether they come in tight or not, you keep the $28. Therefore, your sales staff doesn’t have to check stones on take in; the jeweler does it at the bench.

When told this, 30 percent of customers will say, “No way, José.” So you write on the job envelope, “No guarantee; customer didn’t want to have stones checked and tightened.” You’re off the hook.

With that said, 70 percent of the 3,000 jobs with five or more stones will gladly pay the $28. That means you get to charge 2,100 customers an extra $28. That’s a staggering $58,800 you’d take in just because you asked!

Don’t complain how much it costs to replace a stone anymore. Don’t tell the client it’s her fault. You checked and tightened, and therefore you took in $58,800. Can’t you afford to make it right, even if it’s not your fault?

But maybe you’re still scared to do this. Let’s say just half of those clients said, “Yes, I want the guarantee.” Half of $58,800 is $29,400.

Do you know that is money that goes right to the bottom line, net profit on your P&L? Know what it takes to get an extra $29,400 in net profit? If your net profit is 5 percent of sales, you’ll need to do an extra $588,000 in sales to have that net profit.

In other words, just adding the $28 fee produces the same result as opening another store that does half a million dollars per year.

You’re welcome.

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David Geller

If Your Sales Are Acceptable But You Have No Cash, Look At Your Inventory

It’s an extremely simple formula.

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“IF I MADE that much money, where the heck is it?”

After getting one’s tax return back from the CPA, this is the usual question. Jewelers often tell me they aren’t making any money when, in fact, most I help do make a profit in the store.

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But making a profit and having money are two completely different things.

Let’s just talk jewelry sales. If you sell $500,000 and earn keystone, your gross profit is $250,000.

If expenses are $200,000, then your net profit is $50,000, which is 10 percent of sales. Awesome!

“But I have no money!”

Easy. Look at how much inventory you have. At keystone, the amount of inventory you should stock is about equal to your gross profit from selling jewelry. So, if your gross profit was $250,000, then $250,000 should be about inventory level. If inventory is $400,000, the extra $150,000 (which you’ve been overbuying for a few years) hits you in the behind.

Take that $150,000 “too much inventory” and divide by half to three-quarters (leaving either $75,000 or $110,000). Then go look at your QuickBooks or accounting program and add up your accounts payable, credit card debt, bank loans, and loans from owner.

And you’ll see excess inventory is equal to debt, give or take.

In the jewelry industry, a good inventory turn is 1.0 (one time per 12 months). For every month after 12 that stale item sits in the case, the selling price (at keystone) must be increased monthly by 4 percent to make the same amount of profit after a year. If an item cost $100 and sells for $200 and is a year old, then each month starting with month 13, you must add $8 to make up for the second year’s missing profit month-by-month. By month 18, you’d need to raise the price by $48. In two years, it would need to make you $200 instead of just $100. And just think: you could have invested that money into new inventory!

Note: If you have this kind of old inventory and have less debt, I’m betting you do a large amount of shop sales (which requires virtually no inventory) or buy/sell a lot of scrap. These are “free money” departments, requiring little inventory while throwing off good profits. But why work your tush off in one place to help pay for a debt-ridden department someplace else in the store?

Most jewelers think jewelry (including diamonds) doesn’t go out of style. Wrong. Jewelry goes out of money.

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David Geller

Here Are the New Inventory Rules of Jewelry Retailing

In today’s business climate, doing things the old way will kill your store.

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Did you previously work for your parents or a long-time jeweler? Because it’s not your grandfather’s Buick anymore!

When your parents or your old boss were younger, they enjoyed the luxury of “blowing money to the wind” on excessive inventory. Then they taught you how to manage a business, but now your livelihood is not as good as theirs was.

Back in the day, your parents or boss didn’t have to compete with Internet pricing and maybe didn’t have to worry about a “Rap list.” 

Back in the day, a store’s gross profit was 55-70 percent! Yes, stores got keystone on diamonds and four-time markup on color and gold. In the 1970s, I worked at Neiman Marcus as their jeweler, and I remember them selling a $100,000 diamond at triple key. Your parents or old boss may have told you, “Keep old inventory; it’ll sell.” And they may have said, “No one will pay higher prices for repairs; it will only hurt diamond sales.”

Not only are these things not true, but in today’s business climate, they will kill your store. Overall store gross profit margin percentage today is about 43-48 percent, and margins on diamonds continue to shrink. 

With that in mind, you can’t keep inventory for more than 12 months. Stock balance with vendors anything not selling within a year, or clear it out yourself. Additionally, you must increase your turn to compensate for low margins. Reorder anything sold within six months of stocking it. 

Lower gross profit margins on products means every department has to stand alone as an income and profit source. That means the shop is no longer a giveaway department; it must make its own money and it should be a 50 percent gross profit margin department.

Back in the day, high markups saved the day and you could be fat and lazy. Today, you have to be a lean, mean fighting machine. Your overall stock inventory amount at these lower margins needs to be about equal to a year’s gross profit dollars from selling this stock.

Be lean and mean and have more money and lower debt.

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