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Laurie Owen: Inventory Turns

Stats to know for your store.




What is it? It’s the number of inventory turns you should be shooting for per year. (Of course, if your turn is higher, all we have to say is … well played, sir, well played.) Typical is 1.1 to 1.4 turns per year, according to a 2001 Jewelers of America “Cost of Doing Business” survey. Your store’s profit margin is an important consideration here. Says David Geller: “A gross margin of 50 percent goes well with a turn of ‘one’. Less than that and you may have problems making profits”. Geller reasons that since most jewelers have profit margins in the 41 to 48 percent range, they need at least a 1.25 turn to stay healthy. And for optimum health, you should shoot for a 1.4 turn.

Strategy: How can you move your entire inventory an average of one and a half times per year? Two keys: 1.) Re-order fast sellers frequently – as often as weekly, and 2.) Have your hand on the switch, ready to euthanize any dogs the very instant they turn one year old. Be ruthless! Keep turning!

This story is from the January 2006 edition of INSTORE.

David Squires is the Group Editorial Director of SmartWork Media. He believes that the first role of business media is to inspire readers.



Wilkerson Testimonials

Is It Your Time to Enjoy Life? Wilkerson Can Get You There.

Mary and Tim Whalen, owners of Crown Jewelers in Pittsfield, Mass., wanted to enjoy life beyond their business. When they decided to retire and close shop, they asked Wilkerson to handle the sale. As long-time Wilkerson customers, Mary says she knew the company could manage all the details of the liquidation. It was also great to have “fresh eyes” on their business, says Mary, which “worked tremendously for us.” Today, the Whalens are beginning a new adventure but are quick to commend Wilkerson for helping them get there. “You have one chance to get it right,” she says about their retirement sale. “Do it right.”

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