Your bottom line will love you for it.
[dropcap cap=H]ere are three tales of why you need to get rid of your old stuff. The first was told to me by a jeweler who recently cleared out the junk from his cases. The second is my own story about a jeweler who cleared out the junk from his cases. The third is another of mine about a jeweler who cleared out the junk from his cases. Starting to get the point? [/dropcap]
A JEWELER’S STORY TOLD TO ME:
“I’ve noticed that ever since we removed the old junk from the cases, we waste less time with each customer because we’ve got all new inventory. They don’t say ‘not my style’ nearly as much. We are not scrambling looking for something to match that ugly item that the customer is not gonna buy anyway.”
MY STORY TOLD TO YOU:
Whenever I speak to people about inventory, I ask, “How much inventory do you own?”
I expect something like “$250,000.”
I asked that years ago of a jeweler. His answer was: “I have 2,500
pieces, 1,200 under stock.”
“You have backup of 1,200 pieces? Really?” I asked.
“I didn’t plan it that way,” he said, “but the cases looked so crowded so we took half of it out.”
“What happened when you took half of it out?” I asked.
“It took less time to sell a customer, and the average dollar sale went up!” he said.
ANOTHER STORY TOLD TO YOU:
I had a client whose store I visited every January to help with the books and to do a budget for the year using QuickBooks. I projected how much they should do each month to pay overhead and meet monetary goals.
Did this seven years in a row!
In year six, I spoke to him midyear and told him the story I mentioned above. Why? Because his store (which was doing over $5 million) looked like the Chinese display tables in the lower level of the JCK show in Vegas. You know: so much stuff on the table, you can’t see what color the tablecloth is.
Worse yet, each ring tray of bridal had two rings per slot. Plus, these ring trays had drawers, and there were rings in there as well.
Neck model displays didn’t showcase one diamond pendant; each had three or four chains with pendants, and they Scotch-taped the clasps in the back at different levels so as to make the front “look better.”
So I told him the first story.
That seventh January, I came in and was astonished. It looked like a great store! Half as much merchandise in the case, beautifully laid out.
“What happened to all of that stuff?” I asked.
“It’s all in showcase No. 42,” he said.
“Where’s that?”
“In the safe,” he replied.
“What happened when you removed all of that excess jewelry?”
“The time it took to sell a customer dropped and average dollar sale increased,” he said.
MORAL OF 3 STORIES:
Dump the stuff in your safe or old excessive merchandise and scrap it. It didn’t sell in the case, it won’t sell in the safe, and won’t sell next year. Gold is high, dump it.
Would you rather be rich or right?
David Geller is a consultant to jewelry-store owners on store management and profitability. E-mail him at dgeller@bellsouth.net.
[span class=note]This story is from the April 2011 edition of INSTORE[/span]