WHAT’S YOUR PLAN for 2021? Throw in the towel or continue on? To close up with money means selling off inventory, and there are scores of “going out of business” (GOB) companies in the jewelry industry. Many run the whole operation for you. Others get you set up to do it on your own. Typically, if you are looking to sell your store, this is a tough nut to crack. You want a high price, they bid a low price.
If you’re a shop-oriented type store with little inventory, it’s either sell to an employee or just close. This is not the time to try and make a killing; everything gets depreciated.
But what if you’re looking to keep on truckin’? It’s time to plan, think, and do like a well-run machine. Here are some suggestions:
- If you don’t have one now, open a savings account. Then, like clockwork, when you make your deposit into your checking account, move 10 percent of that into the savings account. I promise you it won’t be missed, just as if you gave every customer this week a 10 percent discount. One jeweler I spoke to last week did this and had almost $150,000 in savings. Just do it; prepare for the unexpected.
- Get over this notion that you’ll make a profit on old inventory. For each extra year it stays in stock, to be profitable it has to bring in an extra year’s profit. Buy it for $100 and sell for $200 in year one. In year two, it has to sell for $300; in year three, it must sell for $400. If they didn’t buy it in year one, what makes you think it will sell in year two or three? Discount it at 12 months and/or double the sales commission on older merchandise. Eighteen months old? Scrap it or sell it on a jewelry group on social media like Jewelers Helping Jewelers.
- Sales at jewelers and online retailers in 2020 were great. Many people have money. Time to raise your prices for the shop. It has an 80 to 90 percent closing ratio. This is not 1960! They will pay and you deserve money for your expertise and even surviving 2020! (My father and grandfather were diamond setters in New York during the Great Depression, and they made gobs of money.)
- Stay lean! Many jewelers told me that after the lockdown, they were doing as well or better than last year with fewer staff! Get more from your staff and pay them for this.
- Become a marketing and advertising maven! Stores that have been doing this very well over the years reaped benefits in 2020 as all sorts of online ads and marketing drove sales. Many I spoke to who tried to jump on the train in 2020 (playing marketing catch up) had a hard time. There are so many companies that can help with this.
- If possible, buy your own building. Almost 100 percent of jewelers I’ve met who owned a building were just better off financially, and this becomes your retirement nest egg.