David Geller: Thrill with Incentives

Published

12 years ago

January 4, 2012

David S. Geller

David Geller: Thrill with Incentives

Give your staff 8% when they sell old merchandise

BY DAVID GELLER

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 Besides, many a salesperson thinks they are “shoving old, outdated product down the throats of their customers” and hate the idea.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?

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!

This Third-Generation Jeweler Was Ready for Retirement. He Called Wilkerson

Retirement is never easy, especially when it means the end to a business that was founded in 1884. But for Laura and Sam Sipe, it was time to put their own needs first. They decided to close J.C. Sipe Jewelers, one of Indianapolis’ most trusted names in fine jewelry, and call Wilkerson. “Laura and I decided the conditions were right,” says Sam. Wilkerson handled every detail in their going-out-of-business sale, from marketing to manning the sales floor. “The main goal was to sell our existing inventory that’s all paid for and turn that into cash for our retirement,” says Sam. “It’s been very, very productive.” Would they recommend Wilkerson to other jewelers who want to enjoy their golden years? Absolutely! “Call Wilkerson,” says Laura. “They can help you achieve your goals so you’ll be able to move into retirement comfortably.”