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David Brown

Are You Getting the Diamond Business That You Should?

Monthly data comparison highlights a surprising trend.

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As part of our monthly data comparison, we offer a departmental review of performance across over 700 stores. The info has highlighted a surprising trend. The obvious assumption is that the largest stores get a greater percentage of their sales from diamond product. But the opposite is actually true. Within the diamond category, diamond rings are particularly interesting.

So how does your data compare? Are you above or below this trend for your store size?

The first question to ask is, who is your target market? Are you chasing the bridal client, and if so, what is the demographic of the diamond customers you are currently getting? A jeweler I spoke to recently had pinpointed bridal as their ideal customer, but in fact a quick profile of their customer base showed that most of their diamond ring sales were coming from the older right-hand ring market – often single women purchasing diamonds for themselves.

If bridal is your target, then you need to look at three key areas: promotion, product mix and performance of staff. If you aren’t achieving the percentage of sales from bridal and diamonds that you feel you should, then it’s highly likely you are underperforming in one, two or all of these areas. So how do you know which one?

Promotion is about leads. If you aren’t attracting bridal prospects into your store, then your marketing may be lacking. Are you measuring this aspect of the business? How many diamond inquiries do you get per month? 

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Product mix is about offering the right selection for your clients. Does your range of product match the inquiries you are getting? Are your sales and your inventory out of balance (an inventory imbalance report can reveal this)? Are you carrying the right price points that your customers want to buy?

Performance is about sales. If you’re not converting leads, then either your inventory isn’t right or your staff isn’t completing the task. This may be about having the wrong staff, but it may also be a lack of training. How many hours per month do you spend training your staff about bridal and diamonds?

Making sales is not a passive process. Leaving it to chance is not an answer. If your bridal department is underperforming, then you need to identify the reason and take action to rectify the problem. 

David Brown is president of the Edge Retail Academy, a force in jewelry industry business consulting, sell-through data and vendor solutions. David and his team are dedicated to providing business owners with information and strategies to improve sales and profits. Reach him at david@edgeretailacademy.com

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David Brown

What Business Owners Can Learn from Abraham Lincoln’s Failures

He would never have been in position to succeed if he hadn’t failed first.

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WE ARE CONDITIONED BY society to fear failure. Our education system defines performance as “getting the answer correct.” This result-based measurement is an effective method for assessing a level of knowledge, but it doesn’t encourage the hands-on learning process so necessary to develop true understanding and retaining of information — nor encourage the discovery of new knowledge.

Sadly, this aversion to getting things wrong starts at an early age and continues our whole life. Despite the copious number of successful people who have failed spectacularly before achieving success, we still attempt to follow a path that has more to do with avoiding ignominy than with enjoying the benefits of stretching ourselves into uncharted territory.

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Abraham Lincoln never feared failure — he could little afford to. His list of unsuccessful endeavors in both business and politics would have forced a lesser man to give up. Here are just some of his “failures.”

1831: Failed in business.
1832: Ran for state legislature — lost.
1832: Also lost his job — wanted to go to law school but couldn’t get in.
1833: Borrowed some money from a friend to begin a business, and by the end of the year was bankrupt. He spent the next 17 years paying off this debt.
1838: Sought to become speaker of the state legislature — defeated.
1840: Sought to become elector — defeated.
1843: Ran for Congress — lost.
1846: Ran for Congress again — this time he won — went to Washington and did a good job.
1848: Ran for re-election to Congress — lost.
1849: Sought the job of land officer in his home state — rejected.
1854: Ran for Senate of the United States — lost.
1856: Sought the vice-presidential nomination at his party’s national convention — got less than 100 votes.
1858: Ran for U.S. Senate again — again he lost.
1860: Elected president of the United States.

What sort of president would Lincoln have become if he had not had his failures? Had his life been a succession of unbridled achievements, would he have had the fortitude or fighting qualities to drag the country through its toughest challenge ever? Or would he have been ill-prepared for the physical and mental battle the presidency required? I believe his history of failing provided him with the steel and determination he needed to see the job through. Had he not “failed” so many times, he would not have become the man he was — and the history of the United States may have looked sharply different.

Learning to fail helps you overcome the fear of testing your boundaries and ultimately helps you grow and succeed. When it happens, embrace it for the lessons it can teach.

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David Brown

9 Ways to Unload Dead Inventory

When old inventory clogs the cash-flow arteries of your store, here’s how to clean it out.

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LAST MONTH, WE talked about the process of controlling what you buy and what you consume with your inventory. Much like dieting — where your buying and consumption dictate how many pounds you put on — the process of clearing extra inventory is much like shedding that extra weight that works its way onto your hips and stomach. You have to hit the exercise gear when the weight goes up, and the same is true with your surplus inventory. If you don’t move it on, that inventory will sit around your business waistline, clogging up your cash-flow arteries and damaging the health of your business.

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Here are some of our best suggestions for shedding those surplus items that are no longer helping your business health:

1. Run a sale. The obvious answer is to have a major clearance, but care needs to be shown here. Some businesses live constantly in sale mode to the extent that it harms the ability to generate sales at any other time. Use this sparingly and be creative in how you promote it.

2. Have a clearance area. Less harmful than a full-on sale to your bottom line, this can allow you to drip out items that are not going anywhere at full price.

3. Talk to your vendors. In some circumstances, vendors will be happy to exchange items that are not moving for you. This, however, will depend on the item and their ability to sell it elsewhere. Don’t expect this as a right. This needs to be done in a way that is a win/win for both parties involved.

4. Talk to your fellow retailers. As the old saying goes, “One man’s trash is another man’s treasure.” Product that may not sell in your store can be fast-selling items for other retailers.

5. Try online. Giving your product a different exposure via your web store may help it move.

6. Reposition the product. It may be good product that’s in a bad location. Have you rearranged your store displays so the product is in a more prominent place? It may be in a spot that customers don’t access easily.

7. Melt it down, make it back up and move it on.

8. Bundle it up. Often, those slow-moving items will benefit by being combined with other pieces. Maybe slow items could be put together as a special, or you could combine a slow item as a deal to go with a full-priced fast seller.

9. Use as a contest giveaway. Of course, if it’s particularly bad, it won’t encourage contest entries!

Managing dead inventory is a fact of business. You can never eliminate it completely, but regular “inventory exercise” is needed to make sure the fat in the system isn’t causing trouble to your business health.

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David Brown

How Eating Right Is Like Managing Your Inventory

The right items and advance planning can make your business fit.

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KEEPING YOUR INVENTORY in order is a little like painting the Eiffel Tower … you no sooner get to one end than you feel you have to repeat the process all over again!

Inventory is a dynamic part of your business. It is constantly in flux, and as such, difficult to manage. However, having a good system will go a long way toward helping you keep your inventory under control.

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There are two aspects to your inventory: what you buy and what you keep. It’s the buying part that contributes most to what is left after the customers don’t want it, so let’s start with that first.

Food dieting consists of what you eat and how much of it you consume. Buying inventory is the same. There is what you buy, and then there is how much you are spending. If your diet consists of eating healthy greens, vegetables and fresh fruits, then part of your food diet will take care of itself. The same is true of ordering fast sellers — make these the mainstay of your inventory diet, and you will take care of a good 70-80 percent of the inventory you will need to consume. That leaves the remainder — the combination of poor choices and overconsumption that can cause the most problems (I’m still talking inventory here!).

In the same way that meal planning can reduce overeating or making poor food choices, planning your purchasing will work the same way. We recommend an open-to-buy budget as the most effective way to do this. An open-to-buy will balance what you are selling with what you are buying. Think of it like a calorie checker that enables you to eat once you have burned enough fat. The open-to-buy will track the money released from outgoing inventory that is then freed up to spend on new product and let you know how much this is so you don’t over-buy. This will help you to keep your inventory situation from becoming any more bloated.

So what about the surplus inventory that is aged and isn’t going anywhere now? This is the same as the few extra pounds that might be sitting around your hips — it’s one thing to stop the increase, but it’s another thing entirely to get rid of that unwanted fat.

Much like systemizing your buying with an open-to-buy program, you can systemize the aged inventory with a series of means to move it on. This can consist of a variety of options that work well for you on a regular basis to keep that aged inventory from clogging up your store arteries. I’ll talk more about these options in the next article.

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