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David Geller: Thrill with Incentives

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David Geller: Thrill with Incentives

David Geller: Thrill with Incentives

Give your staff 8% when they sell old merchandise

BY DAVID GELLER

David Geller: Thrill with Incentives

Published in the January 2012 issue

I recently had a discussion with a store manager about doing spiffs for the staff to get rid of old inventory. The manager liked the idea of putting a red dot on the tag and paying $50 for every piece they sold rather than putting all old items in one showcase, to keep like items together. I disagreed on both counts.

 I like the idea of keeping the items together, but I’m not always as thrilled about giving a set dollar amount as a spiff. I usually find the amount is too little to make it enticing for salespeople. If they sell one old piece a week and get $50, you might think that’s a lot of money. But there are two things to consider:

  • Lunch is $10 around town. One spiff pays for lunch for the week. Whoopee!
  • Your staff comes to work for the “guaranteed pay” you’ve already promised them, not extras.

If they are making $700 a week ($36,400 a year), then $50 in one week isn’t really a big to-do. Besides, many a salesperson thinks they are “shoving old, outdated product down the throats of their customers” and hate the idea. They’d rather sell new and fresh merchandise. Hey, I would, too.

If you give them $50 for a spiff, that’s the ceiling on what they can earn. But if you give them a percentage of what they sold that was old, it just might make a difference. After all, if you have a $600 piece of jewelry sitting next to another piece that sells for $900 and both have a $50 spiff, where’s the thrill in selling the higher-priced item?

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You can’t make any money from inventory over a year old anyway, so you need to move it. An incentive is the way to move old merchandise.

You might think $50 is an incentive, but if you’re unhappy with how old merchandise is moving, then take a new approach. Get rid of old merchandise that ties up your cash, and allow your salespeople to make some serious money, not just lunch money.

Pay the staff 8 percent on whatever old merchandise they sell, no matter what the margin or age. Then they’ll be more likely to sell even higher-priced merchandise for you, and you’ll get the cash. Just have them remove the red dot tag, staple it to a copy of the invoice, and hand it over to the bookkeeper for pay day.

Everybody wins!

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SPONSORED VIDEO

When Sales Beat Projections, You Know Wilkerson Did Its Job

There are no crystal balls when it comes to sales projections. But when Thomasville, Georgia jeweler Fran Lewis chose Wilkerson to run the retirement/going-out-of-business sale for Lewis Jewelers and More, she was pleasantly surprised to learn that even Wilkerson could one-up its own sales numbers. “Not only did we meet our goal, but we exceeded the goal that Wilkerson had given us by about 134%,” she says. After more than 40 years in the business, Lewis says she decided a few years ago to “move towards retirement.” And she was impressed by Wilkerson’s tenure in the industry. Overall, she’d recommend the company to anyone else who may be thinking it’s time to hang up their loupe. “As a full package, they’ve done a very good job and I’d definitely recommend Wilkerson.”

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David Geller

David Geller: Thrill with Incentives

mm

Published

on

David Geller: Thrill with Incentives

David Geller: Thrill with Incentives

Give your staff 8% when they sell old merchandise

BY DAVID GELLER

David Geller: Thrill with Incentives

Published in the January 2012 issue

I recently had a discussion with a store manager about doing spiffs for the staff to get rid of old inventory. The manager liked the idea of putting a red dot on the tag and paying $50 for every piece they sold rather than putting all old items in one showcase, to keep like items together. I disagreed on both counts.

 I like the idea of keeping the items together, but I’m not always as thrilled about giving a set dollar amount as a spiff. I usually find the amount is too little to make it enticing for salespeople. If they sell one old piece a week and get $50, you might think that’s a lot of money. But there are two things to consider:

  • Lunch is $10 around town. One spiff pays for lunch for the week. Whoopee!
  • Your staff comes to work for the “guaranteed pay” you’ve already promised them, not extras.

If they are making $700 a week ($36,400 a year), then $50 in one week isn’t really a big to-do. Besides, many a salesperson thinks they are “shoving old, outdated product down the throats of their customers” and hate the idea. They’d rather sell new and fresh merchandise. Hey, I would, too.

Advertisement

If you give them $50 for a spiff, that’s the ceiling on what they can earn. But if you give them a percentage of what they sold that was old, it just might make a difference. After all, if you have a $600 piece of jewelry sitting next to another piece that sells for $900 and both have a $50 spiff, where’s the thrill in selling the higher-priced item?

You can’t make any money from inventory over a year old anyway, so you need to move it. An incentive is the way to move old merchandise.

You might think $50 is an incentive, but if you’re unhappy with how old merchandise is moving, then take a new approach. Get rid of old merchandise that ties up your cash, and allow your salespeople to make some serious money, not just lunch money.

Pay the staff 8 percent on whatever old merchandise they sell, no matter what the margin or age. Then they’ll be more likely to sell even higher-priced merchandise for you, and you’ll get the cash. Just have them remove the red dot tag, staple it to a copy of the invoice, and hand it over to the bookkeeper for pay day.

Everybody wins!

Advertisement

Advertisement

SPONSORED VIDEO

When Sales Beat Projections, You Know Wilkerson Did Its Job

There are no crystal balls when it comes to sales projections. But when Thomasville, Georgia jeweler Fran Lewis chose Wilkerson to run the retirement/going-out-of-business sale for Lewis Jewelers and More, she was pleasantly surprised to learn that even Wilkerson could one-up its own sales numbers. “Not only did we meet our goal, but we exceeded the goal that Wilkerson had given us by about 134%,” she says. After more than 40 years in the business, Lewis says she decided a few years ago to “move towards retirement.” And she was impressed by Wilkerson’s tenure in the industry. Overall, she’d recommend the company to anyone else who may be thinking it’s time to hang up their loupe. “As a full package, they’ve done a very good job and I’d definitely recommend Wilkerson.”

Promoted Headlines

Most Popular