Columns

Laurie Owen: Gross Margin Target

Stats to know for your store.

Published

18 years ago

March 1, 2006

David Squires Instore March 2006 Issue

51.5

What is it? Gross margin is the portion left of each sales dollar after you pay for merchandise sold, direct labor for craftsmen and repair people, as well as freight in and freight out. When stated in dollars, it’s known as gross profit. For the “high profit” group in our 2004 Jewelers Financial Benchmarking Study, the average gross margin was 51.5%. The rest of the companies only took home 47.2% of each sales dollar. For a $2.5 million dollar company, every 1% more in gross margin means $25,000 straight to the bottom line – assuming, of course, that they keep all other costs in line.

Strategy: The trick? Buy better, price better, lose less merchandise to five-finger discounts, and sell more of before it goes out of style. Simple? Yep. Easy? No. Know your target gross margin, and track it overall and by depart-ment all year long.

This story is from the March 2006 edition of INSTORE.

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.”