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On Finances : Turn Your Old Stock into Cash for Your Store’s Future

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On Finances : Turn Your Old Stock into Cash for Your Store’s Future

BY DAVID BROWN

On Finances : Turn Your Old Stock into Cash for Your Store’s Future

Published in the April 2012 issue.

Too much aged inventory? It’s a common problem. In fact, it’s probably the industry norm.

We’ve covered ways of getting rid of old inventory before, including favorites such as sales, showing a specials cabinet and remaking old pieces into new items. There’s nothing wrong with these (there are only so many ways to cash up old product), but many jewelers still seem to finish the year with the same amount of old product that they started with. Sadly, the new stuff doesn’t stop getting older.

 

So, how can a jewelry-store owner prevent the problem from recurring? One of the best ways is to buy smarter in the first place. After all, if you replace an old item with a fast seller, it will, by definition, move quicker!

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But how to buy better? Look for a track record. If product is selling well in other stores, there is an increased chance of it selling well in your store. (Software such as AdvantEdge will identify the best selling items from around the U.S. Contact carol@edgeretailacademy.com for information on how to access the AdvantEdge data regardless of the software system  you use.)

 

Another solution is to ask the question: “Does this item I’ve just sold really need to be replaced”? With the majority of jewelers carrying far more product than they need relative to the sales they are generating, the answer is often no.

Our consultant Mike Druan implements a simple strategy to help our clients deal with this:

Earmark cash received for inventory sold that is over 36 months old, and make sure it is not reinvested in more inventory.

Take a look at an inventory report now and pinpoint how many dollars you have in product that is more than 36 months old. Chances are you’ll get a shock! But if you could put that money in the bank or pay off existing debt would it make a big difference to your business?

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In most cases, the answer is yes,and you’ve already proven, by the fact that it sat around for 3 years, that you don’t need it. So here’s what to do:

>> Print a list of all items over 36 months old.

>> Mark the tags of these items so staff can identify them. Deploy your strategy to move inventory.

>> Track the sales of the 36-month-old items.

>> Vow that the cash raised (after clearing any obligations on the items such as memo payments) will not be reinvested in product.

Start small — Mike often begins with just one item a month and works up from there. One store was soon into the swing of it and was able to reduce inventory (and increase cash) by over $30,000!

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Decide you’re going to make a difference to your business by adopting this strategy today. Another solution is to ask the question: “Does this item I’ve just sold really need to be replaced”? With the majority of jewelers carrying far more product than they need relative to the sales they are generating, the answer is often no.

 

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SPONSORED VIDEO

When There’s No Succession Plan, Call Wilkerson

Bob Wesley, owner of Robert C. Wesley Jewelers in Scottsdale, Ariz., was a third-generation jeweler. When it was time to enjoy life on the other side of the counter, he weighed his options. His lease was nearing renewal time and with no succession plan, he decided it was time to call Wilkerson. There was plenty of inventory to sell and at first, says Wesley, he thought he might try to manage a sale himself. But he’s glad he didn’t. “There’s no way I could have done this as well as Wilkerson,” he says. Wilkerson took responsibility for the entire event, with every detail — from advertising to accounting — done, dusted and managed by the Wilkerson team. “It’s the complete package,” he says of the Wilkerson method of helping jewelers to easily go on to the next phase of their lives. “There’s no way any retailer can duplicate what they’ve done.”

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David Brown

On Finances : Turn Your Old Stock into Cash for Your Store’s Future

Published

on

On Finances : Turn Your Old Stock into Cash for Your Store’s Future

BY DAVID BROWN

On Finances : Turn Your Old Stock into Cash for Your Store’s Future

Published in the April 2012 issue.

Too much aged inventory? It’s a common problem. In fact, it’s probably the industry norm.

We’ve covered ways of getting rid of old inventory before, including favorites such as sales, showing a specials cabinet and remaking old pieces into new items. There’s nothing wrong with these (there are only so many ways to cash up old product), but many jewelers still seem to finish the year with the same amount of old product that they started with. Sadly, the new stuff doesn’t stop getting older.

 

Advertisement

So, how can a jewelry-store owner prevent the problem from recurring? One of the best ways is to buy smarter in the first place. After all, if you replace an old item with a fast seller, it will, by definition, move quicker!

But how to buy better? Look for a track record. If product is selling well in other stores, there is an increased chance of it selling well in your store. (Software such as AdvantEdge will identify the best selling items from around the U.S. Contact carol@edgeretailacademy.com for information on how to access the AdvantEdge data regardless of the software system  you use.)

 

Another solution is to ask the question: “Does this item I’ve just sold really need to be replaced”? With the majority of jewelers carrying far more product than they need relative to the sales they are generating, the answer is often no.

Our consultant Mike Druan implements a simple strategy to help our clients deal with this:

Earmark cash received for inventory sold that is over 36 months old, and make sure it is not reinvested in more inventory.

Advertisement

Take a look at an inventory report now and pinpoint how many dollars you have in product that is more than 36 months old. Chances are you’ll get a shock! But if you could put that money in the bank or pay off existing debt would it make a big difference to your business?

In most cases, the answer is yes,and you’ve already proven, by the fact that it sat around for 3 years, that you don’t need it. So here’s what to do:

>> Print a list of all items over 36 months old.

>> Mark the tags of these items so staff can identify them. Deploy your strategy to move inventory.

>> Track the sales of the 36-month-old items.

>> Vow that the cash raised (after clearing any obligations on the items such as memo payments) will not be reinvested in product.

Advertisement

Start small — Mike often begins with just one item a month and works up from there. One store was soon into the swing of it and was able to reduce inventory (and increase cash) by over $30,000!

Decide you’re going to make a difference to your business by adopting this strategy today. Another solution is to ask the question: “Does this item I’ve just sold really need to be replaced”? With the majority of jewelers carrying far more product than they need relative to the sales they are generating, the answer is often no.

 

Advertisement

SPONSORED VIDEO

When There’s No Succession Plan, Call Wilkerson

Bob Wesley, owner of Robert C. Wesley Jewelers in Scottsdale, Ariz., was a third-generation jeweler. When it was time to enjoy life on the other side of the counter, he weighed his options. His lease was nearing renewal time and with no succession plan, he decided it was time to call Wilkerson. There was plenty of inventory to sell and at first, says Wesley, he thought he might try to manage a sale himself. But he’s glad he didn’t. “There’s no way I could have done this as well as Wilkerson,” he says. Wilkerson took responsibility for the entire event, with every detail — from advertising to accounting — done, dusted and managed by the Wilkerson team. “It’s the complete package,” he says of the Wilkerson method of helping jewelers to easily go on to the next phase of their lives. “There’s no way any retailer can duplicate what they’ve done.”

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