Connect with us

David Brown

Here’s How to Make Your Biggest Sale Ever … Again

To reproduce your highest-priced sale, you have to show the right product.

mm

Published

on

CHANCES ARE YOU easily recall the single highest-priced item that you’ve ever sold in your store — the adrenalin rush of seeing it appear on your terminal or as a line item in your reporting or maybe a deposit on the bank statement. The excitement of moments like this makes retail worthwhile.

Assess how it happened. What were the circumstances of that particular sale? Did you consciously create the opportunity, or did it fall in your lap?

Video: Use This Low-Tech Secret to Bring More Jewelry Customers Through Your Door
Jim Ackerman

Video: Use This Low-Tech Secret to Bring More Jewelry Customers Through Your Door

Video: How to Greet Jewelry Customers Without Sounding Like a Salesperson
Jimmy Degroot

Video: How to Greet Jewelry Customers Without Sounding Like a Salesperson

Video: How to Get Rid of Negative Thoughts in Your Work as a Jeweler
Jimmy Degroot

Video: How to Get Rid of Negative Thoughts in Your Work as a Jeweler

A better question is, have you consciously tried to reproduce it?

Perhaps you thought you got lucky and it was a one-off sale. Yet, the reality is that if you did it once, you can do it again.

Let’s assume the item was a diamond ring, as that’s the most likely scenario. Do you have anything in your inventory at that price range? Perhaps it was a custom piece made for someone; nevertheless, chances are you do not have a similar piece displayed in your store.

The challenge is that your current inventory influences your customer’s perception. If your diamond rings range between $10,000- $20,000 retail, your customer will see you as a store that offers fine jewelry up to $20,000. A customer who is willing to spend $50,000 may not see you as the place to shop, causing you to lose these potential luxury sales.

Advertisement

We are not suggesting that you rush out to buy a lot of $50,000 rings. Instead, work out an arrangement with one of your top performing vendors that will allow you to showcase these higher-priced items. Remember, if you hope to sell a $50,000 ring, you may need to show a $70,000 one to get the market interested. Customers will seldom spend more than you show them.

The best way to reproduce your highest-priced sale is to make sure your inventory includes those price points and to prominently display them in your store.

David Brown is president of the Edge Retail Academy, a force in jewelry industry business consulting, sell-through data and vendor solutions. David and his team are dedicated to providing business owners with information and strategies to improve sales and profits. Reach him at david@edgeretailacademy.com

Advertisement

SPONSORED VIDEO

Wilkerson Testimonials

When It’s Time for Something New, Call Wilkerson

Fifty-four years is a long time to stay in one place. So, when Cindy Skatell-Dacus, owner of Skatell’s Custom Jewelers in Greenville, SC decided to move on to life’s next adventure, she called Wilkerson. “I’d seen their ads in the trade magazines for years,’ she says, before hiring them to run her store’s GOB sale. It was such a great experience, Skatell-Dacus says it didn’t even seem like a sale was taking place. Does she have some advice for others thinking of a liquidation or GOB sale? Three words, she says: “Wilkerson. Wilkerson. Wilkerson.”

Promoted Headlines

David Brown

These Stores Have Seen Lower Silver Sales in the Face of Better Overall Results — How Do Your Results Compare?

Check out The Edge Retail Academy’s latest results.

mm

Published

on

ROLLING 12-MONTH SALES for June averaged $1.897 million, up 1% from the June 2018 result of $1.879.

Storewide sales for the 12-month period averaged 6,118 units per store, down 5.5% to 6,474. Average sale per item increased from $290 per item to $310, a rise of 6.9%.

With sales increasing $18,000, gross profit grew from $859,000 to $871,000, a rise of 1.37% on the back of markups, which improved from 84% to 85%. This again illustrates how even a slight increase in margin can have a significant effect on bottom-line profit.

Video: Use This Low-Tech Secret to Bring More Jewelry Customers Through Your Door
Jim Ackerman

Video: Use This Low-Tech Secret to Bring More Jewelry Customers Through Your Door

Video: How to Greet Jewelry Customers Without Sounding Like a Salesperson
Jimmy Degroot

Video: How to Greet Jewelry Customers Without Sounding Like a Salesperson

Video: How to Get Rid of Negative Thoughts in Your Work as a Jeweler
Jimmy Degroot

Video: How to Get Rid of Negative Thoughts in Your Work as a Jeweler

We’ve spoken a lot through these results about the decline in units sold across store data, and this is most obvious when looking at the performance of silver sales. Our 12-month data through June shows average store sales of $99,000 for silver items, down from 2018’s figure of $113,000 (a 14% decline) and 2017’s figure of $136,000 (2019 result represents a drop of 27% from 2017). Unit sales match this decline with sales of silver items at 926 items, down from 1,210 in 2018 (a fall of 23.4%). The drop in units has been offset by a healthy increase in average sale of silver items, with the average increasing from $94 to $107 between 2018 and 2019 – a rise of 13.8%.

Based on this information, the typical store has seen silver’s contribution to overall sales decline from 7.7% to 5.2% in the last two years. How has silver been for your store? If silver sales have declined, has there been a trade-off in other areas? Clearly most stores have seen a rise in sales while silver has dropped, indicating that they are more than making up for it. Is this the case with your store? If silver has dropped but you haven’t made up for it elsewhere, its time to look at your store’s performance.

Inventory

Does your store still say silver? Have you continued to focus on an area that has become less profitable? Print an inventory by department list and determine what percentage of your store product is silver. Does it represent a greater percentage of your overall inventory than you are selling?

Silver will generally have a faster stockturn that most other items, so you should expect your percentage of inventory to be significantly lower than your percentage of sales in this area. If it’s not, you may be saying “silver” to your customers when you should be saying something else.

Marketing

What message are you sending your customers? Are you focused on the right type of product in your marketing? Are you still emphasizing cheaper silver product when the market wants something else?

Staff

Have your staff moved on from the bead market in what they are attempting to sell? Are they skilled up to sell higher-priced items? If the average sale in most stores has increased by 20% in the last two years, then your staff need to realize the performance goalpost has shifted for them, too. They need to be increasing their average sale to keep pace with the general trend – but they won’t know to do this if you don’t tell them. Print a salesperson performance report for your staff and compare it to a similar report from two years ago. Who has lifted their average sale? Who is still at the same level? Be prepared turn potential into profit to discuss this with them. They may not know what has been happening, and they cant change if you don’t tell them.

Continue Reading

David Brown

April Sales Were Up – But Is Your Focus Where It Needs to Be?

Sales increased 2.3%.

mm

Published

on

SALES FIGURES FOR the 12 months ended April 2019 showed a healthy increase across Edge Retail Academy’s database of stores.

Annual sales of $1.87 million were up 2.3% compared with the same period last year, when sales came in at $1.83 million. The rate of growth has slowed from the 2018 increase of 6.4% but nevertheless represents a solid increase.

Podcast: Wisconsin Salesperson Uses Life Savings to Live Her Dream of Jewelry Store Ownership
JimmyCast

Podcast: Wisconsin Salesperson Uses Life Savings to Live Her Dream of Jewelry Store Ownership

Podcast: Making the World a Better Place in Steps Both Big and Small
Over the Counter

Podcast: Making the World a Better Place in Steps Both Big and Small

Podcast: From Tanzanite to Greenland Ruby, Hayley Henning Loves Selling Color
The Barb Wire

Podcast: From Tanzanite to Greenland Ruby, Hayley Henning Loves Selling Color

The increase continues to occur on the back of lower sales quantities and higher average retail sale. Sale units moved during the 12-month period amounted to an average of 6,205 items per store, down 4.8% and 9.5% respectively on 2018 and 2017. Average sale achieved per item increased to $301 from $280 and $250 respectively for 2018 and 2017.

Gross profit of $858,000 was up from last year’s $837,000 and the 2017 result of $789,000.

Margin has held at 85% for each of the last three years.

This month we will focus on silver, which has been the main contributor to the decline in sales volume.

Advertisement

Sales dollars of silver dropped to $100,000 on average per store from the 2018 level of $115,000 and the 2017 level of $143,000. This represents a drop in silver sales of 30% across the two years. Unit sales makes even more interesting reading; quantities of silver sold declined from 1,844 units in 2017 to 994 units for 2019. This is a drop of almost 50% in a two-year period. Part of the decline has been offset by an increase in the average retail value of silver being sold – with the average sale increasing from $77 in 2017 to $100 today. However, this has not been enough to offset the volume decline. Markups have stayed the same at 113%.

So how do your numbers compare? If silver has been a significant part of your business, what has been the impact of a decline in the last two years? Given the significant drop across all stores, it’s most likely that the majority of stores have seen this happen. If you haven’t already reinvented yourself in this area, it might be time to do so.

Start by analyzing your sales departments. What percentage contribution is coming from each of your key areas – diamonds, gold, silver and watches? Now if you have a report from two years ago, how do these percentage contributions compare to what happened back then?

If your sales have changed, then you need to look at how you have responded to this within your store.

1. Review your merchandising. How is your store set out relative to sales? Are you still trying to promote product that is no longer selling? Does your store setup reflect your sales and what you want to sell?
2. Review your staff training. What are your staff members focused on? Are they still preoccupied with product lines that are no longer selling? You sell what you are focused on.
3. Concentrate on marketing. What message are you sending to your clients and potential customers? Are you still emphasizing a focus on what used to sell well for you? Are you promoting what your customers want to buy now?
4. Review your inventory. Return on investment is an important metric for any business. Do you have more inventory concentrated in silver than you should? Can this money be better utilized elsewhere?

Advertisement

It’s important that your business is constantly responding to the marketplace – what your customers need is what you are best to concentrate your sales efforts on. You need to be aware of sales trends within your business. This may not be the end of the drop in silver sales, and if you have concentrated your efforts too strongly in this area, then there may yet be an even lower return on your efforts to come in the foreseeable future.

Continue Reading

David Brown

5 Steps To Make Your Business More Salable

Build net profit and control your inventory tightly.

mm

Published

on

AFTER YEARS OF hard work building up an asset that they hoped would provide for them in retirement, many business owners are finding there is nothing left at the end of the day when they come to cash in their chips. And we’re not just talking businesses that struggle — I’m talking about businesses that are making a very healthy profit each year.

How many of you know a fellow store owner who has been in this situation? I had friends recently close down at the end of December in a store that had traded for over four decades and was making a large six-figure profit. They were in their 70s, had decided to quit but could not find a buyer interested in taking over their store. Sadly, this scenario is far too common.

Video: Use This Low-Tech Secret to Bring More Jewelry Customers Through Your Door
Jim Ackerman

Video: Use This Low-Tech Secret to Bring More Jewelry Customers Through Your Door

Video: How to Greet Jewelry Customers Without Sounding Like a Salesperson
Jimmy Degroot

Video: How to Greet Jewelry Customers Without Sounding Like a Salesperson

Video: How to Get Rid of Negative Thoughts in Your Work as a Jeweler
Jimmy Degroot

Video: How to Get Rid of Negative Thoughts in Your Work as a Jeweler

Here are five steps you can take to help this situation:

1. Drive every possible dollar of net profit. Most business owners generally try to minimize their net profit to reduce tax, but this ends up costing them as they approach retirement. Jewelry stores are bought and sold nowadays based on a multiplier of net profit, so every dollar could be worth $4-6 to them when they sell … not to mention they can use that net profit to retire debt or create retirement wealth while they still own the business.

2. Establish and achieve an optimum inventory level … one that delivers maximum GMROI while still satisfying your customers. Most stores are heavily over-inventoried, and the store is not an asset unless it generates turn and margin. Many are emotionally invested in their inventory, but no prospective buyer is going to want their old stock at any price. Nor do customers. Guess what is left after a successful GOB? The old stuff!

If Business A has $100,000 of profit on $400,000 of inventory, and Business B has $100,000 on $700,000, then both would sell for the same multiplier of profit. Store B may well be left with either an inflated value that would put a buyer off because they have inventory to clear, or be forced to find a way of disposing of the surplus product.

3. Transition the owners’ personal skills and responsibilities from “business operator” to “business owner.” No one wants to buy a business (or certainly not at full price) where the current owner is the No. 1 asset in the business (i.e., does a lot of personal sales, buys all of the inventory, does the marketing, is the main bench jeweler, etc.). There is too much uncertainty about what will happen to the performance of the business the day after the highly involved owner departs.

4. Build a strong team. Sometimes this involves outsourcing such things as repairs, custom design, marketing, social media, bookkeeping, etc. to effectively handle all day-to-day responsibilities. Note: this takes time, patience and perseverance.

5. Be visible online and on social media … it’s one of the first places prospective buyers will look.

In a market where supply exceeds demand, you need to give yourself a competitive advantage if you want to cash in that nest egg. It can happen, but it requires a strong level of grooming and preparation. The return, however, is well worth it.

Continue Reading

Most Popular