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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

Big Survey: How Many Women Make More Than $150,000 in Retail Jewelry?

For the most part, men are the higher earners.

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FOUR IN 10 independent jewelry stores in America are now run by women according to the 2018 Big Survey. However, for the most part, it is the men who continue to be the highest earners, with 80 percent of the jewelers making $150,000 or more a year being male.

A part of this discrepancy can be explained by the fact that many of the women owners and managers are relatively new to the industry and their stores have yet to reach the scale that rewards their owners so handsomely. In 2009, the first time we specifically asked about gender, the split between male and female owners was 65/35.

It’s also undeniable that women face bigger hurdles in business, whether it’s accessing credit, being accepted in business networks or just operating in a still male-dominated field.

Having said that, the women jewelers in our survey are doing well. Forty-three percent of the jewelers who said they’d had their best year ever since 2016 were women, suggesting they are outperforming their male counterparts.

As the Store Owner, What Did You Earn (Salary + Share of Profit) Last Year?

What Is It Your Gender?

COMMENT: The number of women owners or managers has been steadily rising since we started doing these surveys more than a decade ago. The first time we specifically asked about gender, in 2009, the split was 65/35. For the record, 43% of the thriving jewelers were women, suggesting they are outperforming their male counterparts. That said, it should be noted that male-owned stores overall tend to be older and thus the owners are often comparing those last two years against a historical record that goes back decades.

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Big Survey

Manmade Diamond Legal Quiz: Can You Do Better Than the Jewelers in the 2018 Big Survey?

Test your knowledge.

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ON JULY 24, the Federal Trade Commission’s jewelry guidelines were revised to include laboratory-grown diamonds in the commission’s definition of diamonds.

The FTC’s previous definition of a diamond was: “A natural mineral consisting essentially of pure carbon crystallized in the isometric system.”

The new listing does not include the word “natural.” “When the commission first used this definition in 1956, there was only one type of diamond product on the market — natural stones mined from the earth,” the FTC said. “Since then, technological advances have made it possible to create diamonds in a laboratory. These stones have essentially the same optical, physical and chemical properties as mined diamonds. Thus, they are diamonds.”

Which of the following terms are you allowed to use to describe laboratory-grown diamonds, according to the FTC. (The figures in parentheses reflect the answers of your fellow jewelers who took the Big Survey)

Laboratory-grown
94%
Manmade
56%
Laboratory-created
47%
Synthetic
35%
(Manufacturer-name)-created
34%
Cultured
20%
Simulant
7%
Imitation
6%

 

The descriptions in orange are fine, based on the FTC guidelines, while those in red are not. How did you do?

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Big Survey

Big Survey: How Many Hours Do Jewelers Work Per Week?

More time at work doesn’t always spell success.

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CONVENTIONAL WISDOM SAYS there should be a direct correlation between hours worked and performance. But the 2018 Big Survey failed to find such a clear link. The takeaway? Working smart and other variables like being in an economically strong part of the economy matter more, because when you look at the numbers, just about all jewelers work hard.

To be sure, the strugglers in our survey (defined by those who said one of the last two years had been their worst in business) tended to be over-represented at the “fewer hours” end of the band, but they were also among the jewelers putting in the longest hours at the other end of the spectrum (16 percent of the strugglers were working more than 60 hours a week compared to 12 percent for the thrivers). Overall, just about everyone was working hard: 58 percent of the respondents to the 2018 Big Survey, which attracted the participation of more than 700 independent jewelers, reported working more than 45 hours a week.

Average / Thrivers / Strugglers

Less than 30 3% / 3% / 5%

30­-39 15% / 15% / 22%

40­-45 23% / 25% / 12%

46­-50 23% / 20% / 22%

51­-60 22% / 24% /22%

61­-70 9% / 8% /12%

More than 70 3% / 4% /4%

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