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The Big Survey 2018:
Store Performance

Almost 80% say it's the key factor in their performance.

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While social media and online marketing topped jewelers’ list of popular new initiatives to drive sales, it was a more traditional quality, “reputation for service, trust and jewelry-making skill,” that 4 out of 5 respondents credited as responsible for their bottom line. Meanwhile, just over one-third of storeowners earn $100,000 or more per year.

 

29. What area are you seeing costs rise the most?

Sales staff
Overall
25%
Thrivers
28%
Strugglers
13%
 
Inventory (inc. findings)
Overall 19%
Thrivers 14%
Strugglers 27%
 
Advertising and marketing
Overall 19%
Thrivers 24%
Strugglers 17%
 
Insurance
Overall 17%
Thrivers 17%
Strugglers 17%
 
Bench staff/including outsourced work
Overall 8%
Thrivers 7%
Strugglers 8%
 
Rent/location
Overall 10%
Thrivers 7%
Strugglers 14%
 
Other
Overall 1%
Thrivers 1%
Strugglers 1%
 

COMMENT: Interesting point: The Strugglers are being squeezed by rising inventory and rent costs, the Thrivers by climbing staffing and advertising expenses.

 

30. What were your total sales last year?

58 percent of respondents still fall under the $1 million dollar mark … fewer than 2017, when 63 percent said they earned less than $1 million per year. As weak stores fall away, there’s more to be made by the strong.


Comment: The West was no place for middling stores. It had the most million-dollar-plus stores, and also the most very small stores.

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31. As the store owner, what did you earn (salary + share of profit) last year?

About one-third of respondents said they earned $100,000 or more per year.

 

32. The No. 1 factor driving your sales is:

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33. What proportion of store profit (not revenue) does your shop generate (including custom design work)?

60s and older
Around 75% or the majority of profit
15%
Around half
27%
About one-quarter
38%
A minor amount
17%
It’s a loss-maker but brings in customers
7%
None. Don’t have a shop
7%

Comment: The shop remains a key profit center for most independent jewelers with 44% of the thriving stores reporting that at least half their profits came from benchwork compared 39% for the strugglers. David Geller, author of Geller’s Blue Book, believes that while many jewelers know the level of revenue their shop is producing they might not know the actual profit. “Most stores don’t have their shop set up correctly in QuickBooks. If their CPA does the books they have no clue to shop profits,” he says.

 

34. When preparing a quote for a custom design job, what rate do you use for the cost of your labor?

60s and older
Less than $50 an hour
13%
$50 to $74 an hour
22%
$75 to $99 an hour
25%
$100 to $124 an hour
24%
$125 to $150 an hour
11%
More than $150 an hour
5%

Comment: Geller notes that the results mean three-quarters of stores charge between $50 to $124 an hour. That suggests a lot are charging on the low side, especially if you consider trade shops such as Jewel-Craft in Kentucky with its staff of over 100 jewelers typically bill $85 an hour as a wholesale rate. “Most stores don’t think in per hour at ALL, if they did they might do better.” For those that don’t use his pricing guide, they either “send it out to a shop and double it or figure they just know how much people will pay and will charge that number,” he says. If you were to base your keystone on the wholesale rate, “you’d be charging $165 an hour,” Geller notes.

 

35-36. In which area do you get a) your best margin, and b) your best return on effort?

Comment: David Geller calls the results unsurprising, explaining “you don’t need to know profit percentages to know the return on your investment in custom is HUGE.” Added the repair guru: “Bridal margins are lower as name brands are shoppable. It also takes more ‘effort’ and I’m sure they are including selling it, advertising it, and managing inventory for it.”

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37. What one thing are you doing now to drive sales that you weren’t doing five years ago?

Top 10 things in order
1. Social media
2. Focusing on my online presence, including website and SEO
3. Clienteling and relationship building
4. More advertising in general
5. Driving customer reviews
6. Promoting and offering more custom jewelry
7. E-commerce
8. Direct mail
9. Email communication
10. Moving to a new location

 

38. What one thing were you doing to drive sales five years ago that you’ve stopped doing?

Print advertising:
More than half of respondents specifically mentioned newspaper advertising in this category. “Newspaper. It’s dead for us,” said one.

Radio and TV:
“Our market isn’t listening to radio like they once did. This had us pull out of our traditional mind-set and begin getting creative in a fresh way.”

Traditional advertising in general:
(Respondents mentioned a combination of TV, newspaper, billboard, phone book and radio, when they specified a category.)

Direct mail
Yellow Pages
Billboards
All paid advertising
Discounts (“Sale, sale, sale. Price, price, price.)
In-store events
Selling Pandora
Also mentioned: Wearing suits.

Over the years, INSTORE has won 76 international journalism awards for its publication and website. Contact INSTORE's editors at editor@instoremag.com.

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Big Survey

Here’s How Jewelers Knew They Had ‘Made It’

Jewelers share their most meaningful measures of success.

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RETAIL JEWELERS SAY they knew they had “made it” when they drove home a new Porsche or an Escalade. But they REALLY knew they had a success story when they could take a day off once a week, take a vacation, or their stress level “dropped to zero.”

  • My daughter wanted to work here.
  • I sold a $10,000 sapphire sight unseen over the phone to an established customer.
  • The mayor dedicated a day of the year in our name.
  • My customer base exceeded 5,000.
  • I got my store name printed on our plastic bags, our ribbon and our tissue paper.
  • My accountant said I have net worth and should make a will.
  • I could retire.
  • My stress level dropped to zero.
  • I hit my first million-dollar store.
  • Dad said he was proud of me.
  • I see my work around someone’s neck or on their finger and I see them show off their jewelry and point to me and tell the other people, “She is the one that created this for me.”
  • A four-day work week.
  • I consistently started selling 2-carat diamonds and larger.
  • I drove home my brand-new Porsche.
  • I bought my Escalade.
  • I bought my building.
  • When I heard the sleigh bells on the rooftop.
  • I stopped getting a tax refund.
  • I can take a vacation.
  • I was at a local restaurant and ran into a client. She began to sing the store’s jingle from our radio ads.
  • I reached my goal of a million dollars cost in inventory with no debt ever.
  • I pay my parents more than they have ever made in their lives not to come to work.
  • I was no longer concerned with December’s numbers. It’s not that I don’t care. I just don’t worry about it. Pay for your inventory during the year and you will have a relaxed December!
  • An engagement ring client said our store had been around his entire life and of course he was coming here to buy!
  • My customers and people I don’t know tell me how good of a jeweler I am.
  • I was sitting across the boardroom table from Nicholas Oppenheimer at the CSO in London.
  • I wake up smiling because I get to come to work. I’m unemployable anywhere else and I love (mostly all of) it!
  • Everyone wanted my job.
  • I heard the hammer fall on an empty chamber.
  • I don’t need to be in the store and sales happen and customers are happy.
  • I quit advertising and sales continued to go up.
  • We made it past our first 10 years in business.
  • I no longer did more wholesale than retail.
  • Customers were coming in from three states away.
  • I finished this survey.
  • My competitors came to visit our new store.
  • I didn’t have to worry about the rent.
  • The first year I had to pay taxes on the store profits!
  • I could afford to blow 100 bucks on dinner.
  • I saw the logo stamp.
  • New England Patriots come in my store for jewelry.
  • Big-name brands I couldn’t get to take my calls suddenly started calling me.
  • A local charity expected us to make a 6-figure donation.
  • People started handing me their jewelry in the grocery store to bring in for repair.
  • At a recent chi-chi charity fundraising event, four of the high-profile attendees are clients in the middle of big projects.
  • She put her hands on her hip and said to him, well.
  • When people introduce me as Rosanne from the jewelry store.
  • Gold prices went to $1,800 per ounce.
  • I survived 2010.
  • They were actually sad at my funeral.
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Big Survey

Here’s How Jewelers Are Driving Sales Today (Hint: Things Are Changing Rapidly)

‘Online, online and online,’ said one jeweler.

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IN THIS YEAR’S Big Survey, jewelers report increasing their digital footprint and throwing more time, money and thought into social media, especially Facebook, as well as their websites and dipping a toe at least into e-commerce. They also say they are recognizing the extreme importance of customer reviews, and contacting customers by email and text.

While even as recently as five years ago, some may have considered social media a passing fad, it seems clear that in 2018, retailers now recognize its importance and make it a priority.

Here are some comments:

  • “Online, online and online.”
  • “More internet.”
  • “We started putting together community events with local non-profits that have not only generated great publicity but also helped raise over $40,000 for local efforts.”
  • “Instituting interest free five-year financing and building the bridal line to be the largest in the county.”
  • “Online storefront via our website.”
  • “Paying close attention to what I buy.”
  • Financing (longer terms).

What are they doing less of? Traditional advertising, specifically traditional print advertising, and more specifically, newspapers.

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Big Survey

Big Survey: Here’s What Jewelers Are Doing To Prepare for the Next Economic Downturn

‘Making hay while the sun shines,’ said one jeweler.

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WHILE SOME JEWELERS are just “rolling with it,” and others are doing their best to manage inventory, stay debt free and market consistently, others (you know who you are!) are holding your breath, praying or bingeing on comfort food to banish those negative thoughts.

Here are a range of additional comments on that topic:

    • We have chosen to ignore it, just like Wall Street has.
    • Just riding the wave until it crashes into the shore.
    • Investing in equipment.
    • Making hay while the sun shines.
    • Still trying to get to the upturn.
    • We are shrinking our stock with faster moving and better selling items.
    • By doing more for the client than they ask for.
    • Banking it will last 10 more years.
    • Ride this pony for all she has left.
    • Making new inventory from gems I own.
    • Purchasing more real estate and more diamonds.
    • Keeping on top of trends.
    • Pushing the fashion category because bridal will come on its own.
    • Downsizing.
    • Trying to create meaningful relationships with our customers so they remember us later.
    • Renovating, training and hiring more experienced people to maintain an edge.
    • Plan to own the building by then so our monthly expenses are minimum. And there’s an apartment upstairs so we have a place to live — just in case.
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