Connect with us

Laurie Owen: Gross Margin Target

Published

on

Stats to know for your store

{loadposition laurieowenheader}

[h3]51.5[/h3]

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.

 

Advertisement

 

Laurie Owen is senior vice president at Business Resource Services. Contact her at [email protected].

[span class=note]This story is from the March 2006 edition of INSTORE[/span]

Advertisement

SPONSORED VIDEO

Wilkerson Testimonials

If It’s Time to Consolidate, It’s Time to Call Wilkerson

When Tom Moses decided to close one of the two Moses Jewelers stores in western Pennsylvania, it was time to call in the experts. After reviewing two candidates, Moses, a co-owner of the 72 year-old business, decided to go with Wilkerson. The sale went better than expected. Concerned about running it during the pandemic, Moses says it might have helped the sale. “People wanted to get out, so there was pent-up demand,” he says. “Folks were not traveling so there was disposable income, and we don’t recall a single client commenting to us, feeling uncomfortable. It was busy in here!” And perhaps most importantly, Wilkerson was easy to deal with, he says, and Susan, their personal Wilkerson consultant, was knowledgeable, organized and “really good.” Now, the company can focus on their remaining location — without the hassle of carrying over merchandise that either wouldn’t fit or hadn’t sold. “The decision to hire Wilkerson was a good one,” says Moses.

Promoted Headlines

Most Popular

Columns

Laurie Owen: Gross Margin Target

Published

on

Stats to know for your store

{loadposition laurieowenheader}

[h3]51.5[/h3]

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.

Advertisement

 


 

Laurie Owen is senior vice president at Business Resource Services. Contact her at [email protected].

[span class=note]This story is from the March 2006 edition of INSTORE[/span]

Advertisement

SPONSORED VIDEO

Wilkerson Testimonials

If It’s Time to Consolidate, It’s Time to Call Wilkerson

When Tom Moses decided to close one of the two Moses Jewelers stores in western Pennsylvania, it was time to call in the experts. After reviewing two candidates, Moses, a co-owner of the 72 year-old business, decided to go with Wilkerson. The sale went better than expected. Concerned about running it during the pandemic, Moses says it might have helped the sale. “People wanted to get out, so there was pent-up demand,” he says. “Folks were not traveling so there was disposable income, and we don’t recall a single client commenting to us, feeling uncomfortable. It was busy in here!” And perhaps most importantly, Wilkerson was easy to deal with, he says, and Susan, their personal Wilkerson consultant, was knowledgeable, organized and “really good.” Now, the company can focus on their remaining location — without the hassle of carrying over merchandise that either wouldn’t fit or hadn’t sold. “The decision to hire Wilkerson was a good one,” says Moses.

Promoted Headlines

Most Popular