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By The Numbers: Your Stock in Trade

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[h3]Your Stock in Trade[/h3]

By The Numbers: Your Stock in Trade

[dropcap cap=W]e have no way of knowing what kind of instructions Warren Buffett hands down to his jewelry division, but we’d hazard a guess there’s not a lot of sentimentality attached to his view of the inventory.[/dropcap]

As beautiful as some of the pieces may be, it all still adds up to stock that can be measured for markup, turn and return. Most jewelers would probably claim to be as dry-eyed about their inventory as Buffett, but the figures tell a different story. As shown in the chart above, stock turn basically flat-lines at a pretty modest level for the typical independent jeweler, with an annual life-preserving spike in December. Despite being a jeweler’s largest investment, there is often little or no accountability expected of this asset. An average store achieves a return (GMROI) of about $70 gross profit for every $100 invested in inventory. Yet at the top end, there are stores generating twice as much with only little more effort on the part of the owner. Here’s what they do:

[dropcap cap=1.]They set high GMROI targets for every piece[/dropcap]
[dropcap cap=2.]Cull those that don’t deliver on those targets[/dropcap]
[dropcap cap=3.]Re-order fast sellers[/dropcap]
[dropcap cap=4.]Have “exit strategies” for the statement pieces they buy[/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 August 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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Wilkerson Testimonials | Sollberger’s

Going Out of Business Is an Emotional Journey. Wilkerson Is There to Make It Easier.

Jaki Cowan, the owner of Sollberger’s in Ridgeland, MS, decided the time was right to close up shop. The experience, she says, was like going into the great unknown. There were so many questions about the way to handle the store’s going-out-of-business sale. Luckily for Cowan, Wilkerson made the transition easier and managed everything, from marketing to markdowns.

“They think of everything that you don’t have the time to think of,” she says of the Wilkerson team that was assigned to manage the sale. And it was a total success, with financial goals met by Christmas with another sale month left to go.

Wilkerson even had a plan to manage things while Covid-19 restrictions were still in place. This included limiting the number of shoppers, masking and taking temperatures upon entrance. “We did everything we could to make the staff and public feel as safe as possible.”

Does she recommend Wilkerson to other retailers thinking of retiring, liquidating or selling excess merchandise? Absolutely. “If you are considering going out of business, it’s obviously an emotional journey. But truly rest assured that you’re in good hands with Wilkerson.”

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David Brown

By The Numbers: Your Stock in Trade

Published

on

{loadposition davidbrownheader}

[h3]Your Stock in Trade[/h3]

By The Numbers: Your Stock in Trade

[dropcap cap=W]e have no way of knowing what kind of instructions Warren Buffett hands down to his jewelry division, but we’d hazard a guess there’s not a lot of sentimentality attached to his view of the inventory.[/dropcap]

As beautiful as some of the pieces may be, it all still adds up to stock that can be measured for markup, turn and return. Most jewelers would probably claim to be as dry-eyed about their inventory as Buffett, but the figures tell a different story. As shown in the chart above, stock turn basically flat-lines at a pretty modest level for the typical independent jeweler, with an annual life-preserving spike in December. Despite being a jeweler’s largest investment, there is often little or no accountability expected of this asset. An average store achieves a return (GMROI) of about $70 gross profit for every $100 invested in inventory. Yet at the top end, there are stores generating twice as much with only little more effort on the part of the owner. Here’s what they do:

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[dropcap cap=1.]They set high GMROI targets for every piece[/dropcap]
[dropcap cap=2.]Cull those that don’t deliver on those targets[/dropcap]
[dropcap cap=3.]Re-order fast sellers[/dropcap]
[dropcap cap=4.]Have “exit strategies” for the statement pieces they buy[/dropcap]

 


 

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 August 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].

Advertisement

{loadposition xtra-browncolumn}

Advertisement

SPONSORED VIDEO

Wilkerson Testimonials | Sollberger’s

Going Out of Business Is an Emotional Journey. Wilkerson Is There to Make It Easier.

Jaki Cowan, the owner of Sollberger’s in Ridgeland, MS, decided the time was right to close up shop. The experience, she says, was like going into the great unknown. There were so many questions about the way to handle the store’s going-out-of-business sale. Luckily for Cowan, Wilkerson made the transition easier and managed everything, from marketing to markdowns.

“They think of everything that you don’t have the time to think of,” she says of the Wilkerson team that was assigned to manage the sale. And it was a total success, with financial goals met by Christmas with another sale month left to go.

Wilkerson even had a plan to manage things while Covid-19 restrictions were still in place. This included limiting the number of shoppers, masking and taking temperatures upon entrance. “We did everything we could to make the staff and public feel as safe as possible.”

Does she recommend Wilkerson to other retailers thinking of retiring, liquidating or selling excess merchandise? Absolutely. “If you are considering going out of business, it’s obviously an emotional journey. But truly rest assured that you’re in good hands with Wilkerson.”

Promoted Headlines

Most Popular