New strategies for rising silver prices, preparing to meet an IRS auditor, and how to handle it when your best employee needs to “find himself”.
[h3]Raise Prices With Wholesale costs[/h3]
[dropcap cap=Q.][h4][b]First it was gold, and now silver looks set to go through the roof. What’s the best strategy amid rising wholesale costs?[/b][/h4][/dropcap]
[dropcap cap=A]Raise your prices too. You really have no choice. While it can be tempting to fix your prices in the hope of getting an edge on your rivals, you may well find yourself with no inventory and gold at $850 an ounce in the not too distant future. Accept that in the short term there is going to be pressure on your margins and that you are probably going to have to work harder. Emphasize brands, service, and the emotional benefits of your jewelry.[/dropcap]
Consider hiring more salespeople or increasing advertising to boost overall sales. Ask your vendors what they can do to help in terms of price and product mix. Rein in your sales people and the discounts you allow them to offer. If it was 15 percent, trim it to 10 percent. And finally remember that consumers are aware precious metal prices are advancing. In most cases they won’t object to higher prices, especially if they believe there’s investment value in the item.
[componentheading]SHOW SOME RESPECT[/componentheading]
[h4][b]I’ve been summoned to meet an IRS auditor. Any last-minute tips?[/b][/h4]
Accept that fresh-faced inquisitor across the desk is the boss and show him the due respect. Don’t argue if you disagree with something. If the auditor wants to disallow a deduction, state once why you don’t agree. If he’s not swayed, hold your tongue. Antagonizing an auditor will only encourage him or her to search for other areas of potential tax liability. Remember that you can plead your case with several layers of people above your auditor, and ultimately all the way to tax court if you feel you’ve been wronged.
Surprisingly, most IRS auditors aren’t tax experts. Most are fairly recent graduates whose major was in an unrelated field, so don’t feel intimidated, and don’t underestimate your own tax knowledge. At the same time, while it’s not bad to be congenial, this is not a social event. You’re there to discuss only the sections of your tax return in question. The more you talk about other areas or things that you’re doing, the more likely the auditor will probe into other items.
[componentheading]MANAGEMENT[/componentheading]
[h4][b]My best sales person, who’s 45, wants six months off to ‘find himself’? What should I do?[/b][/h4]
Give it to him. Tell him to take the six months off and that you’ll even pay him 20 percent of his salary while he his gone. “What?!” we hear you saying. “That’s money for nothing!” Ask yourself, though, how hard it is to find good staff and then reconsider. If he’s been in your store seven or 10 years, working the floor, watching the world go by through your window, it’s no surprise he’s getting a little restless.
Simply ask that after he’s done traipsing through the Andes, training for that triathlon or spending more time with his kids, that he returns and works for you for at least one more year. The accumulated vacation time of that year and recruitment savings will cover the cost. And if he’s away during the low season, it gives you a great time to train a junior staff member for more senior responsibilities.
[componentheading]SERVICE[/componentheading]
[h4][b]Is it ever a good idea to refer a customer to your rival across town?[/b][/h4]
If she’s the hard-bargaining, time-consuming, never-satisfied type of customer? Then yes, every time. The other obvious situation is when it’s a service you don’t provide or a product you don’t carry. Jewelers who cooperate in such circumstances obviously stand to gain a lot, although more often than not they refuse to help each other.
In most other instances it really depends on how much confidence you have in your store and whether you have the view that doing best by your customer will eventually pay off in future referrals and return service. It’s amazing how some small good deeds get remembered for years.
[componentheading]MARKETING[/componentheading]
[h4][b]What’s the secret to putting together a good holiday catalog?[/b][/h4]
This is the perfect time to be asking that question, given that the holiday season is undoubtedly still fresh in your mind. “When it’s time to start laying out your pages, you will have a clearer vision of what you want,” says Gary Wright, president of Custom Catalog Service. Wright also suggests these three things to make sure your catalogs are a success:
Determine the specific SKU’s you want to promote, and build your catalog around that merchandise.
Make your catalog represent all the price points in your store. It works for Tiffany & Co.
If it’s critical that your customers receive catalogs on a particular week, such as Mother’s Day or Thanksgiving, ship them Pre-Sort First Class. Otherwise, send them Pre-Sort Standard, and save postage.
[componentheading]ONLINE[/componentheading]
[h4][b]Some of my e-mail bulletins to Hotmail account users are being blocked. Is there anything I can do to avoid being identified as spam?[/b][/h4]
If you were hoping we’d give you a number to call at Hotmail, you’re out of luck. Given the billions of commercial e-mails circulating around it doesn’t work like that. As loath as we are to suggest you use the “help” at any website, you’re first step should be to read the Hotmail guidelines for senders available at http://postmaster.hotmail.com/Guidelines.aspx. If you’re tech-savvy enough, these tools will help you determine the source of your problems. If that seems like a surefire source of frustration and wasted hours, you may want to consider hiring an E-mail Service Provider, or ESP. Among other things, these companies are responsible for getting your e-mails past filters at Internet Service Providers. Finally, make sure you add your physical address to the bottom of your e-mail so that you are in compliance with CAN-SPAM.
[span class=note]This story is from the February 2007 edition of INSTORE[/span]