Connect with us

Commentary: The Business

Jeff Unger: Get On Base With Your Inventory

Read or watch Moneyball — it applies to your jewelry store.

mm

Published

on

I RECENTLY READ Moneyball: The Art of Winning an Unfair Game, by Michael Lewis — you may have seen the recent movie adaptation featuring Brad Pitt. If you’re not a baseball fan, the information below will seem foreign. But keep reading, it will make sense for your business.

Moneyball is the story of how Billy Beane took over as the general manager of the Oakland A’s, the team with the lowest payroll in the major leagues, and made it a winner.

He realized he must be a winner to keep his job, but he didn’t have the budget to buy players. So he scouted players overlooked by other teams whom he could sign cheap. But he also used statistical numbers such as on-base percentages instead of batting averages and home runs. Runs scored, he figured, were more important than batting average. What the information in the computer told him about the player was more important than what the scout saw on the field.

His team was winning with the lowest payroll in the majors and showing a return on investment and a positive cash flow. If the player did not perform, he was released. If the player wanted more money, the team sold him.

This true story sounds like the perfect jewelry store. I’m sure the folks at the Edge Retail Academy and Focus Business Management Institute and David Geller are jumping up and down at this moment. It’s the scenario they have been teaching stores for years.

Your inventory should be made up of items that have the highest return. If the inventory is not performing, release it or trade it! Yes, you picked the wrong styles, but you don’t have to live with the money invested. Purchase based on what your computer sales program is telling you, rather than buying everything you like.

Advertisement

When you go to a trade show, have your store sales data with you. You want to know what styles and price points are the top performers. If you can find a collection that has great markup and return and fits your store, take the risk. It’s the small investment that can have a large return. If the item does not perform, sell it off quickly. But don’t think you can get your exact cost out of the nonperforming inventory. Sell it or scrap it!

Work with your vendors to trade it or sell it as a closeout. Do whatever, but just get rid of it. It’s costing you money on a daily basis.

You don’t want to end up like the Yankees, spending too much money and then losing in the playoffs. Instead, spend your money only on proven winners, and watch your team win you the World Series — well, the World Series of profits.

Jeff Unger was the president and co-owner of B & N Jewelry (d.b.a. Alisa Unger Designs) and a long-time INSTORE contributor. He passed away in February 2019 after a valiant 10-year battle with cancer.

Advertisement

SPONSORED VIDEO

Wilkerson Testimonials | MSG Jewelers

Wilkerson Takes the Worry Out of Closing

MSG Jewelers has always treated its customers like family. When owner Mike George decided to retire and close the doors of his St. Louis, Missouri jewelry store, he selected a company to manage his going-out-of-business sale that treats its customers like family, too. That’s why he chose Wilkerson. “Wilkerson was able to do all the things that we needed,” says George. In the end, the bittersweet store closing was so much easier with Wilkerson at the helm. From marketing to pricing to inventory, Wilkerson does it all. “It’s a package deal,” says George.

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.)

Latest Comments

Most Popular