Columns

Laurie Owen: Inventory Turns

Stats to know for your store.

Published

18 years ago

January 1, 2006

David Squires Instore January 2006 Issue

1.4

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.

Wilkerson Testimonials

Wilkerson: “They Feel Like Family”

Newton’s Jewelers in Fort Smith, Ark., was a true institution. But after being at the helm for most of his life, owner (and descendent of the original founder) Kelly Newton decided it was time to retire. He chose Wilkerson to handle the sale. “I’ve known the owners of Wilkerson for a long, long time. I felt at home with them,” he says. The final retirement sale was just a “blast” and the Wilkerson sales team made it so very simple and straightforward, says Newton. Would he recommend Wilkerson to others? Absolutely. “They’ve done incredible work,” says Newton. “They feel like family.”