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How to Prepare for 2019, Finding a Good CPA and More of Your Questions Answered

London Business School prof advises, “Keep your vision fuzzy and your priorities clear.”

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The sales experts you quote often recommend role-playing exercises. But my sales staff always slinks away when I suggest them. How can I get them to play along?

That may be because the focus is negative, says Dave Richardson of Jewelry Sales Training. Make the role-playing positive and fun. First, play the role of the salesperson and let your salespeople critique you. Then, when it’s your turn to play the customer, instead of saying, “Here’s what you did wrong,” start off by telling the person what you felt they did well and what you would change if you had the opportunity. Always finish on a positive, encouraging note, Richardson says.

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Podcast: When Is It Time to Let an Underperforming Employee Go?

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Podcast: This Advertising Copywriter’s Last Minute Pitch Changed Everything

Podcast: Millennial Gem Trader Dave Bindra Steps Into ‘The Barb Wire’
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Podcast: Millennial Gem Trader Dave Bindra Steps Into ‘The Barb Wire’

Our marketing team’s images were recently lifted and used by the vendor for their advertising without crediting us. When I contacted them, they said, “We’re sorry; it was the intern’s fault.” How should I handle this?

If it was “the intern’s fault,” who approved the final vendor layouts? But regardless of whose fault it is, you should get some compensation for the use of your images, says consultant Kate Peterson. The vendor would have paid for the images had they used any other marketing professional to create them, so they should have no issue with paying your in-house team. “I would suggest that the retailer assign a fair price (what she typically pays her team per image) and send an invoice directly to the head of the company with pics of their ads and an explanation. If applicable, tell them you will apply the amount of the invoice against an outstanding balance,” says Peterson.

“The key here is to remain positive and confident, as opposed to challenging. Assume they are expecting to compensate, and communicate in a tone that expresses confidence in their interest in doing the right thing.”

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2019 seems like it’s going to be a volatile year. What should we do to get ready?

Eight years of economic growth and cheap credit allowed many business owners to gaze far into the future and craft successful, long-term strategies, but it does seem those times are coming to an end as trade wars, rising interest rates, political turmoil, spooked financial markets and ongoing technological change cast a shadow over what otherwise is still a strong economy. In such a shifting, unstable environment where visibility is low, Donald Sull, a London Business School professor, recommends “active waiting.” Contemplate alternative techniques, explore likely scenarios and focus on general readiness. This is a time of threat but also opportunity. “Keep your vision fuzzy and your priorities clear,” Sull says. “Maintain a war chest and battle-ready troops. Know when to wait — and when to strike. When you grab an opportunity or move to crush a threat, amass all your resources behind the effort.” At the same time, continue making routine operational improvements such as cutting costs, strengthening distribution, and improving products and services. “Though mundane, these initiatives foster efficiency, which can position you to snatch a golden opportunity from rivals’ jaws,” Sull says. It all sounds rather dramatic, but then high drama surely awaits.

Where do I find the best CPA?

There are more than a few sloppy accountants around, so it pays to be picky. A good CPA will be a stickler for details and accuracy and very time-conscious. So a useful initial indicator is how long it takes them to reply to your first inquiry (although if it’s April 10, cut them some slack). Look for someone with a history of working with small businesses, but be careful about relying too much on the recommendations of business friends. Draw up a list of three or four prospects and make a decision after you’ve sat down and discussed your particular needs with each of them. If they want to charge for the time, look elsewhere. Final word of wisdom: as good as the person may be, never abdicate your responsibility to know what’s going on with your finances. Get tax smart.

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Is it legal for retailers to say they are selling at wholesale prices?

In short, no — unless they really are. Many states, including Arkansas, Georgia, North Carolina, Kentucky, Texas, California, New York, and Michigan, have strict laws prohibiting the use of the word “wholesale” in retail advertisements. In some states, this is a criminal offense, due to the word’s ability to mislead consumers. “If a jeweler advertises it is selling at wholesale prices, it must sell at the wholesale price,” says the Jewelers Vigilance Committee. Some states define this as the price the jeweler paid for the item from the supplier. Other states, and the federal government, say the price must be lower than the average price retailers would pay in the area.

Over the years, INSTORE has won 76 international journalism awards for its publication and website. Contact INSTORE's editors at editor@instoremag.com.

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When Gene the Jeweler Speaks, His Employees Listen

In this episode of Jimmy DeGroot’s Gene the Jeweler series, Gene has a simple request for his employees. The good news is that they follow his instructions. The bad news is that they follow a bit too literally.

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What’s The Risk of Adding “Gift-Priced” Items and More of Your Questions for May

Lowering threshold resistance without hurting your image is tricky. Here are some ideas.

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I’m thinking of introducing more lower price-point items to get more people in the door. But as a fine jeweler, I worry about how we will be perceived.

Threshold resistance is a real problem for many jewelers, but it’s a tough balancing act. It also requires close attention to return on effort, inventory turn and a host of other factors. John Carom, owner of Abby’s Gold & Gems in Uniontown, PA, says he faced a similar dilemma several years ago and was criticized by some of his peers for going “down market.” Ultimately, though, he’s sure it was the right move. “Carrying jewelry gifts under $200 and even under $50 retail brought us literally thousands of new customers each year for several years,” he says. Carom acknowledges most of these people were never converted to larger purchasers. “But,” he points out, “most of our best and most frequent customers were introduced to us by these market-friendly gifts, with some spending tens of thousands of dollars each every year because they came through the door for a hot low-end item.” Even if you decide not to go with an enhanced selection of gift goods, you need to make sure through your marketing, displays and price tagging that everyone in your market believes they can come into your store and find something for their budget. High end or lower end, you’re at no end if no one comes in the door. As Carom notes: “Traffic building is profit building.”

Rooftop Burglars Take Everything from Jewelry Store
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Rooftop Burglars Take Everything from Jewelry Store

Video: No, I Won’t Help You Commit Fraud … But Thanks for Throwing Water in My Face
Cullen Wulf

Video: No, I Won’t Help You Commit Fraud … But Thanks for Throwing Water in My Face

Video: When Should a Jeweler Fire Someone?
Jimmy Degroot

Video: When Should a Jeweler Fire Someone?

I know I should be focused on my business, but I get an almost warped glee out of competing fiercely with the unethical schmuck up the road. There’s nothing wrong with having such an enemy, is there?

Indeed, there’s plenty of psychological research that testifies to the fact that humans partly enjoy having enemies; they clarify the world for us and bolster our sense of righteousness. So sure, why not channel this sometimes less-than-admirable truth to good ends? And it’s certainly easier to keep an eye on what your rivals are up to in the Internet era. The only thing we’d say is that you don’t lose sight of who your REAL enemy is. Is it the guy so bad at business he’s cutting legal corners, or is it Amazon, or something else — like your own complacency, inertia, or fear of change that poses an existential threat to your business? Enjoy your day-to-day skirmishes with the schmuck around the corner, use it to motivate yourself, but channel your energies into evolving and growing your business.
I am interested in selling gem carvings at my jewelry store. Any advice on what to buy and how to sell them?
e Start small, says AGTA Cutting Edge award-winner Sherris Cottier Shank. Set aside a display case — two feet wide is plenty. Include a half-dozen or so carvings on miniature pedestals and give them lots of visual space. If the case doesn’t look full enough to you, maybe include some information on the carver. Shank guarantees such a display will serve as a conversation starter in your store, and adds that it’s a great way to increase your customers’ appreciation of the beauty and rarity of colored gemstones.

What are an appraiser’s best options to assess the value of a rare, one-of-a-kind or unusual piece of jewelry that can’t be researched?

If information on your piece cannot be found in any of the industry price guides and catalogs or at online forums, Stuart Robertson, research director at Gemworld International, suggests you canvas museum curators, auction houses and estate dealers. “Remember, if an item has value, it likely has a market. Consulting auctioneers and dealers can provide clues to finding and evaluating that market. The sale of comparable items is usually a good indicator of value,” says Robertson.

How can I get my salespeople to sell the older merchandise in the store?

Start by appealing to their belief in the possible, something all good salespeople should possess. Remind them too, in the nicest way, that there’s no accounting for taste. “Remember that somebody at the manufacturer was inspired enough by the idea of the product to create it. And remember that somebody else in your company liked it enough to buy it,” says sales trainer Harry Friedman. That makes at least two professionals out there — whose opinions they should respect — who believe in this particular product, he says. It also means that even though this piece may make them shake their heads in wonderment, there’s a reasonable chance there’s a customer out there who will like it too, so show it proudly. If that doesn’t do the trick, opt for an aggressive commission, says David Geller. “The commission many stores pay usually isn’t enough to get people excited,” he says, recommending you try doubling or tripling it. “If you normally pay a salary plus 3 percent, pay 9 percent on old items. It won’t cost that much, relatively speaking. A $500 item with 3 percent commission costs you $15 … at 9 percent, $45. Thirty bucks to unload a $500 item? Cheaper than a deeper discount, Charlie!”

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What’s a Fair Salary Plus Commission Rate and More of Your Questions for April

Bosses and workers often have different ideas on what’s equitable. Here’s how to make everyone happy.

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I have an employee who makes $16 an hour and 6 percent on retail (although for loose diamonds, commission is based on gross profit). She earns close to $60,000 a year but feels underpaid and that paying gross profit on diamonds is contrary to the industry standard. How can I convince her she has it pretty good?

She does indeed have it pretty good, says industry consultant Andrea Hill, owner of Hill Management Group, noting that her hourly rate is almost 50 percent higher than the average for retail salespeople of $11.50, and even more than the average of $15 paid by very high-end luxury retailers (think Gucci). The commission is also higher than the industry average of 3-4 percent on retail, although, significantly, Hill notes, “wise” businesses are increasingly moving away from such a formula to pay commission on gross margins. “In this way, sales professionals are challenged to balance the need to get the highest price possible with the need to close the sale. When commissions are paid out on total sales only, then it becomes very easy for the salesperson to sacrifice profits for the easy close,” she says. While exposure to such numbers should mollify your associate, what you really want to do is excite her about the potential of earning as much as $100,000 a year — which is what top luxury salespeople make — although that requires building a “strong book” of customers through active networking, clienteling and prospecting work. Keep in mind, however, that even the most generous commission rate won’t help if you’re not on top of your game, meaning advertising intelligently, keeping up with changing retail trends, providing the right technology for how consumers today want to shop, and maintaining an exciting inventory that reflects current tastes, says Hill. “If the retail business owner does not ensure that they are running a strong merchandising and marketing operation, then even the best salesperson in the world will not be able to turn the promise of commission into actual earnings.”

Rooftop Burglars Take Everything from Jewelry Store
Headlines

Rooftop Burglars Take Everything from Jewelry Store

Video: No, I Won’t Help You Commit Fraud … But Thanks for Throwing Water in My Face
Cullen Wulf

Video: No, I Won’t Help You Commit Fraud … But Thanks for Throwing Water in My Face

Video: When Should a Jeweler Fire Someone?
Jimmy Degroot

Video: When Should a Jeweler Fire Someone?

I still can’t get my head around color temperatures. Can you help?

It probably helps to think of the original theoretical model that underlies the index — that of a black metal radiator, whose color changes as it is heated, from black to orange to red to blue to white hot. Similar to Celsius and Fahrenheit, the Kelvin scale marks different degrees of thermodynamic temperature, but it is the association with color change that makes it useful as a way to designate light bulbs. Where it gets confusing is how at the lower end of the scale, from 2000K to 3000K, the light produced is called “warm white” and ranges from orange to yellow-white in appearance. Meanwhile, color temperatures further up the scale, between 3100K and 4500K, are referred to as “cool white,” but the bulbs are emitting a brighter, hotter light.

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We’re planning on holding a thank-you dinner for our best customers to celebrate our store’s 50th anniversary. How do we avoid offending people, especially those small ones who have been loyal if infrequent customers for many years?

This is a tough one. We’d suggest you start with the number of people you’re able to host and then divide that figure up among your sales staff. They should know who their most deserving and valuable customers are. Refrain from advertising the event to all your customers so as not to offend those who aren’t invited. You may also want to prepare a back-up list so you can add names in place of those who can’t make it — there will no doubt be many — to cover as many people in your customer base as possible.

What’s a good way to sell our company to prospective employees — particularly top salespeople?

Just about the most valuable skill a businessperson can have is the ability to recruit and retain good people and yes, it all starts with that job posting. “When the right people read your ad, their hearts will whisper, ‘These people are like me, and I am like them,’” says Roy H. Williams, author of the business bestseller The Wizard of Ads. Bullet point what the job entails, what kind of inventory they will be handling, and also the benefits, but the core message should be about who you are as a company, your reputation and your goals. The best salespeople often have don’t have a sales background, so go easy on the requirements. Your message should be more about culture than qualifications.

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How to Address Drama In Your Store and More of Your Questions Answered

Don’t miss: How to avoid getting in a price war with a competitor.

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My store seems like a reality TV show: all unnecessary drama. It’s exhausting, but addressing it only seems to add fuel to the fire. Is there a way to bring it under control?

You’re not alone. After profitability concerns, this is the No. 1 headache of business owners, says business coach Lauren Owen. Drama and discord create stress and hurt productivity. There is no quick fix, but there are a number of things you can do, starting with regular meetings. “Scheduled, well-run meetings are essential to clear communication and team building and addressing potential conflicts,” says Owen, adding that such meetings are conspicuously absent at stores with drama issues. Other steps include confronting your drama queens, addressing your underperformers (there is often a hidden cost in the resentment they cause), performing a cost-benefit analysis on your high-maintenance employees (sometimes they just suck all the energy out of a store), and finally, taking a good look at yourself. “Some people actually like drama, despite what they say,” Owen says. “If you were really honest with yourself, you might understand that the drama is satisfying some need of yours. Attention? Power? Control? Do you avoid all conflict, even healthy conflict, at all costs?” And are you giving your staff a clear sense of purpose — that jewelry is about something bigger than profits or self-interest? Employees instilled with a sense of higher purpose tend to grouse a lot less, Owen says.

Rooftop Burglars Take Everything from Jewelry Store
Headlines

Rooftop Burglars Take Everything from Jewelry Store

Video: No, I Won’t Help You Commit Fraud … But Thanks for Throwing Water in My Face
Cullen Wulf

Video: No, I Won’t Help You Commit Fraud … But Thanks for Throwing Water in My Face

Video: When Should a Jeweler Fire Someone?
Jimmy Degroot

Video: When Should a Jeweler Fire Someone?

What are the pros and cons of hiring older workers?

The list of advantages is as long as their teeth: seniors are often more responsible than their younger counterparts, call in sick less, work harder, don’t get involved in office politics, and have good life skills. Yet many retailers have mixed feelings about hiring those over the age of 55. To be sure, some older workers do tire more quickly from long hours on the sales floor or may want to work shorter hours either for personal reasons or to protect their Social Security benefits (but that can also mean fewer benefits that you’re obliged to pay). Ultimately, your decision should be guided by this rule of thumb: in retail, people like to do business with people who are like them or share their interests. So, make sure your staff matches your area’s demographics. Although for just about anywhere in the US, that now means a graying market. According to Bureau of Labor Statistics projections, 25 percent of the workforce in 2024 will be over the age of 55.

Where can I get my old displays rewrapped?

We applaud your frugal instincts, but this is a bit like getting your 14-year-old refrigerator reconditioned — you’re often better off buying a new one. “The costs are prohibitive and the old display structure is usually destroyed in the process,” notes Larry Johnson, the author of The Complete Guide to Effective Jewelry Display. Johnson recommends you tell your display vendor what you liked about your old display and get them to help.

Should I delete old names from my email bulletin list?

Your email marketing program will be more effective the cleaner and more up-to-date your subscriber list is, but there are a few things you should do before you start deleting names. First, segment your subscriber list into new, active and inactive customers. “Reach out to the old customers on your list with a different message. Contact them with a special offer, information about something that would be of interest to them, or educational information that would benefit them,” advises Steve Robinson, regional development officer (Illinois) for Constant Contact, which provides email marketing services to more than 300,000 small businesses and organizations in the U.S. “Consider offering a link to an online survey that would allow them to tell you what specifically they are interested in.” If there is no response after two or three more attempts using this approach, Robinson suggests you consider those addresses inactive and either remove them from your list or move these people to a new list to which you email only once or twice a year so as not to lose contact with these old customers completely.

A new competitor seems to be trying to undercut our prices on everything from diamond prices to repairs. How can we avoid getting in a price war?

First, understand that not every price challenge is real. Many of your customers make their purchase decisions because of the quality of your products, services (especially your services), or just the relationship they have with you. Still, if you’re sure price is the issue, and you are losing customers as a result, you may want to a adopt a three-tiered pricing strategy by offering premium and budget options in addition to your regularly-priced goods. The idea is not actually to sell the cheaper or more expensive options, but to underscore the true value you are giving customers with your regular prices through your explanations of what they get with each option. When consumers are faced with such choices, they overwhelmingly choose the middle road.

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