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David Geller

Here’s The Difference Between Successful Stores and Those That Struggle

There are four big differences, plus several small ones.




WHAT’S THE DIFFERENCE between stores that have a good bit of money and low debt and those with little money and a lot of debt?

As someone who has visited stores in person and also sees their business and financials by connecting over the internet for almost 22 years, I can share with you what successful stores consistently do.

Most all jewelers make money, although many have very little of it in their checking account. Many years ago, I read a statistic that said well over 55% of companies who declared bankruptcy had a profitable profit-and-loss statement.

Here’s my list of what I’ve seen in the trenches, not in order of importance.

Successful stores charge easily double their shop’s actual costs for repairs and custom work.

Jewelers typically price by guilt rather than what they must charge to make a good shop profit. I hear all the time: “The customers won’t pay.” Not true. Across the country, the price to size a 14K yellow gold 1-carat round diamond engagement ring smaller ranges from $40 to over $125 (you read that right). Almost all of them enjoy a 90% closing ratio … the $40 jeweler AND the $125 jeweler. If you’re not making enough money from the shop, the only REAL solution is to charge more than you are now. But you’re scared. Think back to when you raised your prices. What happened when you did? NOTHING; they paid. If they squawked, that doesn’t matter.


Repairs and custom does not have TURN, so increasing the number of jobs coming in if a jeweler already has a full box doesn’t increase profits. Be more efficient? A laser machine will definitely do that, but for the most part, a jeweler’s efficiency can be increased about 50%. But if you’re short on profits, increasing a jeweler’s efficiency by 50% won’t help much. To increase shop profits, you have to charge more than you are now.

Successful stores handle inventory the way the very large successful retailers handle it: as if it were a block of melting ice. Before refrigerators became common, blocks of ice were delivered to homes. In the morning, a block of ice might have sold for $1.00. But as the horse-drawn carriage drove through town, the ice started to melt. By 3 p.m., the block was half its original size; who’d pay full price for half a block?

Most jewelers think ONLY margin: “How much can I sell this for above my cost?” That’s a good start, but that’s all it is. Have you noticed how retailers in other industries like clothing sell at their regular prices when new items arrive, and after 60 days or more, they start doing deep discounts to reduce stock? They understand turn. Clothing has a turn of 4 times a year because there are 4 seasons.

Why don’t the clothing retailers just seal the old shirts, slacks, shorts and swimwear in zip-lock bags and bring them out next season? If it cost them $5 for shorts that sell for $10, can’t they sell them for $10 next summer? Maybe, but here’s what they look at:

There might be a new style or “in” look next year, and many clothing retailers have to pay their bills in 30 days, unlike jewelers.

You can’t keep swimsuits on the rack with leather warm coats. No room. Of course, jewelers can pack showcases with more jewelry, just add another ring tray!


Merchandise has an obligation to give your store the profits you expected every year it sits in the store, not just the year it sells. If an item costs $100 and gives you a profit of $100 (keystone), then it should do THAT every year it sits in the case.

Stock the store by price point ranges that have sold in the past. Yes, experiment with some higher priced items, but don’t go overboard. If it sells within six months of its arrival, reorder and continue to do so until it doesn’t sell within six months.

For nine months, sell for “top dollar.” Discount a small amount if need be. After nine months, discount 25% to help move it out of the store.

After 12-15 months, be proactive about either returning the item to the vendor in exchange for other items or give the staff big bucks to move it for you.

Don’t have it in the store if it’s 18 months or older. If it stays, it has an 80% chance it will still be there 5 years later.

Find the dollar amount of inventory over one year old in your POS program. Leave out memo and consignment. Now multiply that number by 80%, and then go into your QuickBooks or accounting software and look at your accounts payables and credit card debt. You’ll see that about 80% of old inventory equals the store debt. Eliminate old inventory, and you lower debt dramatically, giving you more cash and availability to stock items that will move! Here’s some typical numbers:


In one full year, easily 60-80% of all sales made are those from inventory that is less then 6 months old.

Items that sell between six and 12 months of age comprise less than 10% of total sales. Look at the drop! Why? No one likes it anymore. Sales staff yawn when they see it now, customers aren’t interested and it just sits there not selling.

Sales of items that are one year old or older when it sold can be 20% of total sales, but to sell that 20% of total sales, the inventory required is an astonishing 57% of inventory .

Clearly, the golden age of inventory is the first six months of being adopted by you. After six months, it becomes the red-headed stepchild. After 12 months, it’s like a 40-year-old who never leaves home just draining mommy and daddy’s checking account.

Successful stores have ongoing sales training on a regular basis to take “just OK” staff and make them all STARS. A salesperson’s job description: Turn shoppers into buyers while increasing the store’s average dollar sale and their own closing ratio. This only happens with weekly or bi-weekly sales meetings, personal coaching and training.

There are a host of other things successful retailers do, too many to mention. But just a taste of some:

  • Spend a budgeted amount on consistent ongoing advertising. Spending 6-10% of sales on advertising. Their advertising is not boring.
  • Have several events a year, knowing collectively this enhances store sales.
  • Send thank-you notes to customers.
  • Have the staff personally contact customers all year long by notes or phone.
  • Pay the sales staff a commission/bonus system that makes a difference in their paycheck.
  • Renovate the store from time to time so it doesn’t get stale.
  • Hire support staff to allow the owner to do what they do best.
  • Take regular vacations.
  • Have hours open that make it convenient for the customers.



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.”

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