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By the Numbers: Big Vs. Small

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Are big stores more profitable simply because of their size?

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[h3]Big Vs. Small[/h3]

By the Numbers: Big Vs. Small

[dropcap cap=B]ased on the findings of the Edge Retail Academy, the typical big store in America (over $1 million in annual sales) enjoys an average sale value excluding repairs of $189. That is 23 percent better than the $161 average sale value of a small store (less than $1 million in annual sales). This significant difference begs the question: Are bigger stores more profitable simply because they are big and can carry a wider range of inventory or is it because they are better-run operations? One of the most common explanations for the difference is diamonds. And it is clear by looking at the chart above that big stores have a particular advantage here. But in most of the other areas it’s very close, and the share of sales from diamonds doesn’t fully account for the disparity in sales value. Our conclusion: The difference is due to the sales being achieved with each customer and each item. In silver, for example, big stores achieve an average sale value of $53 versus $51 for their peers. Two dollars is nothing. But multiply that across 16 percent of your sales and it becomes more significant. Multiply a $29 difference in gold ($186 versus $157) across every gold item sold and it begins to add up. Yes, it means big stores got big because they are good at what they do. [/dropcap]

 

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David Brown is president of the Edge Retail Academy, an organization devoted to the ongoing measurement and growth of jewelry store performance and profitability. You can contact him at [email protected]

[span class=note]This story is from the July 2010 edition of INSTORE[/span]

If you’d like to contribute your own data and receive a personalized KPI report each month, call (877) 910-3343 or e-mail: [email protected].

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SPONSORED VIDEO

Wilkerson Testimonials | Zadok Master Jewelers

Stick to the Program — And Watch Your Sales Grow

When Zadok Master Jewelers in Houston, Texas, decided to move to a new location (they’d been in the same one for the 45 years they’d been in business), they called Wilkerson to run a moving sale. The results, says seventh-generation jeweler Jonathan Zadok, were “off the charts” in terms of traffic and sales. Why? They took Wilkerson’s advice and stuck to the company’s marketing program, which included sign twirlers — something Jonathan Zadok had never used before. He says a number of very wealthy customers came in because of them. “They said, ‘I loved your sign twirlers and here’s my credit card for $20,000.’ There’s no way we could have done that on our own,” says Zadok. “Without Wilkerson, the sale never, ever would have come close to what it did.”

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David Brown

By the Numbers: Big Vs. Small

Published

on

Are big stores more profitable simply because of their size?

{loadposition davidbrownheader}

[h3]Big Vs. Small[/h3]

By the Numbers: Big Vs. Small

[dropcap cap=B]ased on the findings of the Edge Retail Academy, the typical big store in America (over $1 million in annual sales) enjoys an average sale value excluding repairs of $189. That is 23 percent better than the $161 average sale value of a small store (less than $1 million in annual sales). This significant difference begs the question: Are bigger stores more profitable simply because they are big and can carry a wider range of inventory or is it because they are better-run operations? One of the most common explanations for the difference is diamonds. And it is clear by looking at the chart above that big stores have a particular advantage here. But in most of the other areas it’s very close, and the share of sales from diamonds doesn’t fully account for the disparity in sales value. Our conclusion: The difference is due to the sales being achieved with each customer and each item. In silver, for example, big stores achieve an average sale value of $53 versus $51 for their peers. Two dollars is nothing. But multiply that across 16 percent of your sales and it becomes more significant. Multiply a $29 difference in gold ($186 versus $157) across every gold item sold and it begins to add up. Yes, it means big stores got big because they are good at what they do. [/dropcap]

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David Brown is president of the Edge Retail Academy, an organization devoted to the ongoing measurement and growth of jewelry store performance and profitability. You can contact him at [email protected]

[span class=note]This story is from the July 2010 edition of INSTORE[/span]

If you’d like to contribute your own data and receive a personalized KPI report each month, call (877) 910-3343 or e-mail: [email protected].

{loadposition xtra-browncolumn}

Advertisement

Advertisement

SPONSORED VIDEO

Wilkerson Testimonials | Zadok Master Jewelers

Stick to the Program — And Watch Your Sales Grow

When Zadok Master Jewelers in Houston, Texas, decided to move to a new location (they’d been in the same one for the 45 years they’d been in business), they called Wilkerson to run a moving sale. The results, says seventh-generation jeweler Jonathan Zadok, were “off the charts” in terms of traffic and sales. Why? They took Wilkerson’s advice and stuck to the company’s marketing program, which included sign twirlers — something Jonathan Zadok had never used before. He says a number of very wealthy customers came in because of them. “They said, ‘I loved your sign twirlers and here’s my credit card for $20,000.’ There’s no way we could have done that on our own,” says Zadok. “Without Wilkerson, the sale never, ever would have come close to what it did.”

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