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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 [email protected] 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

Wilkerson Testimonials | Sollberger’s

Going Out of Business Is an Emotional Journey. Wilkerson Is There to Make It Easier.

Jaki Cowan, the owner of Sollberger’s in Ridgeland, MS, decided the time was right to close up shop. The experience, she says, was like going into the great unknown. There were so many questions about the way to handle the store’s going-out-of-business sale. Luckily for Cowan, Wilkerson made the transition easier and managed everything, from marketing to markdowns.

“They think of everything that you don’t have the time to think of,” she says of the Wilkerson team that was assigned to manage the sale. And it was a total success, with financial goals met by Christmas with another sale month left to go.

Wilkerson even had a plan to manage things while Covid-19 restrictions were still in place. This included limiting the number of shoppers, masking and taking temperatures upon entrance. “We did everything we could to make the staff and public feel as safe as possible.”

Does she recommend Wilkerson to other retailers thinking of retiring, liquidating or selling excess merchandise? Absolutely. “If you are considering going out of business, it’s obviously an emotional journey. But truly rest assured that you’re in good hands with Wilkerson.”

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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 [email protected] 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

Wilkerson Testimonials | Sollberger’s

Going Out of Business Is an Emotional Journey. Wilkerson Is There to Make It Easier.

Jaki Cowan, the owner of Sollberger’s in Ridgeland, MS, decided the time was right to close up shop. The experience, she says, was like going into the great unknown. There were so many questions about the way to handle the store’s going-out-of-business sale. Luckily for Cowan, Wilkerson made the transition easier and managed everything, from marketing to markdowns.

“They think of everything that you don’t have the time to think of,” she says of the Wilkerson team that was assigned to manage the sale. And it was a total success, with financial goals met by Christmas with another sale month left to go.

Wilkerson even had a plan to manage things while Covid-19 restrictions were still in place. This included limiting the number of shoppers, masking and taking temperatures upon entrance. “We did everything we could to make the staff and public feel as safe as possible.”

Does she recommend Wilkerson to other retailers thinking of retiring, liquidating or selling excess merchandise? Absolutely. “If you are considering going out of business, it’s obviously an emotional journey. But truly rest assured that you’re in good hands with Wilkerson.”

Promoted Headlines

Most Popular