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The Big Survey 2024: Performance

For those who like to check a scoreboard when they compete in business, here it is — with nearly as many statistical breakdowns as you’ll get at a Major League Baseball game.

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

The Big Survey 2024: Performance

A one percent exists among jewelers — literally. That was the share of jewelers who earned more than $1 million in 2023. The mid-point among the respondents was more modest at around the six-figure mark, with just over half (53%) of jewelry store owners earning more than $100,000 a year. That’s up from 51% in 2022 and puts jewelers comfortably ahead of the average American, who reported an income of $56,316 in 2023. The highest-earning store owners tended to operate in small to medium-sized cities, running large stores that offer a full range of services.

Are you now carrying more or less inventory compared with previous years?

Much less (>25%)
2.7%
Less
22%
About the same
44%
More than previously
26%
Much more than previously (>25%)
4.4%
NA
1.5%

What is the value of your average inventory (including memo) compared to annual sales?

Less than 1.0x
7%
About 1.0x
10%
About 1.5x
16%
About 2.0x
27%
About 2.5x
17%
About 3.0x
8%
More than 3.0x
8%
Don’t know
7%
Inventory is insignificant
2%

What is your GMROI on selling stock inventory?

Less than 50 cents
5%
51 to 65 cents
12%
66 to 85 cents
8%
86 cents to $1.00
8%
$1.01 to $1.50
14%
$1.50 to $2.00
8%
Greater than $2.00
6%
Don’t know
39%

A higher GMROI value indicates better performance and more efficient inventory management. And this was another area where our Thrivers significantly outperformed the Strugglers, with 51% achieving a GMROI above $1.00 compared to just 29% for the Strugglers. The underperformers were also more likely to not know their GMROI at 40% compared to 33% for the outperformers.

What were your total sales last year? (If you have more than one store, please tell us the average per store.)

The Big Survey 2024: Performance

Recent years have been good for jewelers, with 61% now doing more than $1 million in sales per year. That is up from 39% in 2019 and up from 57% in 2022. Note that in 2022 and 2023, about 1% of the respondents said they lost money, and at the other end of the scale, 4.3% of stores reported sales of more than $10 million.

How does your store’s performance, based on percentage of revenue, compare to the following benchmarks?

The Big Survey 2024: Performance

In all these KPIs, the Strugglers lagged their Thriving counterparts, with few achieving a gross profit margin above 50%, while paying more for their occupancy costs. They also invested less in advertising and in their staff. Moreover, the Strugglers were more likely to report they didn’t know these key statistics. It’s hard to improve if you can’t gauge your performance .

Compared to previous times, is your average bridal sale getting bigger or smaller (taking into account inflation)?

The Big Survey 2024: Performance

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

Around 75% or the majority
of profit
9%
Around half
31%
About one-quarter
37%
A minor amount
19%
It’s a loss-maker but brings in customers
1%
Don’t have a shop
3%

What is the average retail value of a repair sale in your store?

Less than $50
5%
$50 to $99
32%
$100 to $150
43%
More than $150
21%

The Thriving stores were less reliant on their shops to generate profit than their peers. For the Strugglers, 57% said their shop accounted for at least a half of their profit. For the Thrivers, only 34% were so dependent on their shops to generate a lion’s share of profit. Meanwhile, the second great engine for the independent jeweler — bridal — revealed another key disparity: 37% of Thrivers had managed to grow their average bridal sale in recent years (taking into account inflation), compared to just 11% for the Strugglers. Indeed, 61% of the underperformers had actually seen their average bridal sale shrink.

Do you have “bad profits”? (Profits that require too much effort, for which the margins are too thin, or that are in an uncompetitive segment)

By far and away, the most common answer here was watch repairs, particularly if they have to be sent out of the store for repair. One respondent shared that they earn about 15% margin on such repairs. Some said they had given up on the watch business completely. One said that they tried to give up watch repairs, but their clients became angry so they brought back the service.

The second most oft-mentioned category was loose diamonds, particularly mined. “There’s too much of a race to the bottom, but we profit from the mountings,” said one respondent. Another said that lab-grown diamonds were bad profits because they were stealing sales from mined diamonds, which take the same amount of time and labor but earn more cash.

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Other services like appraisals, engraving and pearl-stringing were mentioned as bad profit centers due to the time and technology investment required. However, some of these are seen as “loss leaders” to keep clients coming into the store.

Finally, a somewhat surprising “bad profit” center for some was custom design. Given all we’ve read about the high profit margins that custom design can provide, we were taken aback. However, some say that they often underestimate how much labor and/or material will cost and therefore essentially break even or even lose money in some cases.

Over your career as a jeweler, what have you found provided the biggest boost to productivity?

The Big Survey 2024: Performance

Gold is at historic highs. What proportion of profit has gold buying and trading contributed this year?

The Big Survey 2024: Performance

What’s been the main impact on your store from the surge in the gold price this year?

The Big Survey 2024: Performance

Excluding the pandemic, what unexpected expense/event had the biggest impact on your store’s performance?

Loss of a key worker
12%
Street closure/roadworks
9%
Unexpected tax liability
8%
Losses related to a crime or
cybersecurity
8%
Lost work days as a result of
a medical issue
6%
Equipment or software
failure
6%
Inventory loss/write-off
4%
Costs related to a natural
disaster
2%
Divorce in instances where
spouse was co-owner
2%
Being sued
1%
None of the above
30%

Ask a jeweler what he or she fears most and it’s often something related to security. And while armed robbery is terrifying to consider, it’s often mundane things such as those listed here that are more likely to deal a potentially crippling blow to your business. The answer? A contingency plan that covers “black swan” events — and comprehensive insurance.

What area of your store’s performance do you most need to improve?

Profit margin
8%
Sales volume
30%
Productivity
10%
Inventory turnover
37%
Operating expenses
5%
Product mix
2%
Balance sheet
1%
Closing ratio
3%
Responses Other
3%

The two big areas most jewelers said they needed to improve were sales volume and inventory turnover. Interestingly, these two areas also represented the clearest difference between Thrivers and Strugglers, with 40% of the outperformers saying they needed to improve inventory turnover (vs. 29% for the underperformers) and 46% of the Strugglers saying they needed to boost sales (compared to only 25% of the Thrivers).

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Retiring? Let Wilkerson Do the Heavy Lifting

Retirement can be a great part of life. As Nanji Singadia puts it, “I want to retire and enjoy my life. I’m 78 now and I just want to take a break.” That said, Nanji decided that the best way to move ahead was to contact the experts at Wilkerson. He chose them because he knew that closing a store is a heavy lift. To maximize sales and move on to the next, best chapter of his life, he called Wilkerson—but not before asking his industry friends for their opinion. He found that Wilkerson was the company most recommended and says their professionalism, experience and the homework they did before the launch all helped to make his going out of business sale a success. “Wilkerson were working on the sale a month it took place,” he says. “They did a great job.”

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