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David Brown: Escape the Post-Holiday Hangover



David Brown: Escape the Post-Holiday Hangover

Yep, even 3 months out you may still be sorting out December


Published in the March 2013 issue

Even though the holiday season’s trading party ended a couple of months ago, you may still be negotiating your way through the post-Christmas hangover of restocking and paying vendors. Holiday trade can certainly be great when the money rolls in, but at some point, the piper must be paid!

If you’re disciplined with your reorders and have had a lot of memo inventory, you may face the double impact of paying for the initial memo product and paying to reorder it as replacement inventory, so getting the cash flow balanced can be extra important at this time of year.


If things are a little tight, the following steps may help you recapitalize and set yourself up nicely for the remainder of the year:

Cash up old inventory. It may be a tried and true formula, but a sale is often the most effective means of moving dead product out and freeing up cash. Make sure that if you go into sale mode, you don’t do it half-hearted, and that you remove all good sellers from the mix, or they will be the first to go and nothing will be achieved.

Make up loose product. If you’re manufacturing-based, then chances are you have a safe full of loose stones without a good home. Using these to remake fast-sellers and restock can be an effective means of keeping the cost of restocking down.

Negotiate terms with your vendors. Discussing an extended payment period for reorders and new items can help ease the pain of getting your inventory range back on track. Again, this needs to be a win-win for both parties and you should make a commitment to the vendors that you will be willing to reorder fast-selling items

Order for start of next month delivery. When reordering fast-selling items after the 20th of the month, a good way of deferring payment is to ask for them to be delivered at the start of the next month. Provided the item isn’t so quick that you would sell it weekly, then a few days won’t matter if it gets you an extra month’s credit. This can be effective on big-ticket items that may be slower to sell.

Review old items. If you’re not selling or discounting old product, then you may be able to negotiate an exchange with vendors for some new pieces rather than paying cash. This will depend on the terms and conditions for each vendor, but if they are able to move it elsewhere, it is in the interests of both sides to clear the way for fast sellers to come in. (But again, make a commitment to reorder.)


Every good party has someone feeling a little worse for wear, but it needn’t be you. Take the steps to ensure you are feeling 100 percent when the cleanup begins, and you will enjoy a great start to 2013.

About the Author: David Brown is President of the Edge Retail Academy, an organization devoted to the ongoing measurement and growth of jewelry store performance and profitability. For further information about the Academy’s management mentoring and industry benchmarking reports contact [email protected] or Phone toll free (877) 5698657 Edge Retail Academy, 1983 Oliver Springs Street Henderson NV 89052-8502, USA



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