Connect with us

David Brown

Survey Group Jewelers Enjoy Record December Sales

15 percent jump is the biggest December increase since Edge data-tracking began.

mm

Published

on

MOST JEWELERS will be smiling with glee after a healthy December’s trading brought an end to 2014.

Our comparative data shows the average store achieved sales of $346,350 in December, up from $299,613 in the same month in 2013. At 15 percent, this is the biggest single jump in December sales we have seen since first measuring our data back in 2008 and as the table below shows, continues the upward trend that most stores have been experiencing for the last few years.

As can also be seen from the table, sales have steadily climbed for the last few Decembers from a low of $233,201 to a current level of $346,450, an overall increase of 48 percent. Of interest is the drop in margins which have fallen from 52 percent in 2010 to a level of 49 percent now. This is not what we would expect to see – normally stronger trading conditions put less pressure on margins but the opposite seems to be the case. Delving into the numbers further though shows a strong increase in average sale from $151 to $222 (up 47 percent) and a reduction in quantity sold from 1,508 items to 1,456. Simply put, stores are selling higher priced items to fewer people and these higher priced items carry a lower markup.

So what does this mean for profit? Gross profit has increased on average by $48,484 from $121,847 to $170,331. Does that improve the bottom line correspondingly? Most businesses will have seen some increased costs over the 4-year period, but this shouldn’t be more than the cost of living. The lower sales volume suggests most stores should be employing the same level of staffing to achieve these numbers, meaning most of the $48,484 gross profit increase in December should be going to the bottom line.

So how do your numbers compare?

Advertisement

Review your store sales, average sale, quantity and gross profit for December against the same month in 2013. Are the numbers up or down? If you have increased sales have you increased gross profit? If so, has it transferred into more money in your bank account?

It’s easy to get fixated on sales as the main driver of your business. Looking at your gross profit is important too, but if your costs are increasing by more than your gross profit then you will have nothing to show for your improved sales effort. Even if you control your expenses but have a wandering eye when it comes to buying new inventory then your cash flow will not improve and at some point you need this to happen.

A jewelry store should be a cash cow. You not only should make a profit on paper but you should make a profit in the bank. If your sales are increasing but your bank account isn’t then look at the following:

  1. Have you reduced your margins?
  2. Have you increased your expenses?
  3. Are you withdrawing too much from the business for personal reasons?
  4. Are you reinvesting money into assets (e.g. inventory, debtors) that aren’t increasing your business returns or creating you more business?

Chances are if sales aren’t turning into cash it will be one of these areas that are letting you down. Compare your results and pinpoint where the money is gone. It’s your money – you need to know what’s happened to it.

Advertisement

David Brown is the President of The Edge Retail Academy (sister company of The Edge), who provide expert consulting services to help with all facets of your business including inventory management, staffing, sales techniques, financial growth and retirement planning...All custom-tailored to your store’s needs. By utilizing the power of The Edge, we analyze major Key Performance Indicators that point to your store’s current challenges and future opportunities. Edge Pulse is the ideal add-on to the Edge, to better understand critical sales and inventory data to improve business profitability. It benchmarks your store against 1100+ other Edge Users and ensures you stay on top of market trends. 877-569-8657, Ext. 001 or [email protected] or www.EdgeRetailAcademy.com

Continue Reading
Advertisement

SPONSORED VIDEO

Wilkerson Testimonials

Retirement Made Easy with Wilkerson

The store was a landmark in Topeka, Kansas, but after 80 years in business, it was time for Briman’s Leading Jewelers to close up shop. Third generation jeweler and owner Rob Briman says the decision wasn’t easy, but the sale that followed was — all thanks to Wilkerson. Briman had decided a year prior to the summer 2020 sale that he wanted to retire. With a pandemic in full force, he had plenty of questions and concerns. “We had no real way to know if we were going to be successful or have a failure on our hands,” says Briman. “We didn’t know what to expect.” But with Wilkerson in charge, the experience was “fantastic” and now there’s plenty of time for relaxing and enjoying a more secure retirement. “I would recommend Wilkerson to any retailer considering a going-out-of-business sale,” says Briman. “They’ll help you reach your financial goal. Our experience was a tremendous success.”

Promoted Headlines

Advertisement

Advertisement

Advertisement

Subscribe


BULLETINS

INSTORE helps you become a better jeweler
with the biggest daily news headlines and useful tips.
(Mailed 5x per week.)

Facebook

Latest Comments

Most Popular