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3 Things To Do When Business Is Down

Each of these tips could save you substantial expense.

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WE ARE EXPERIENCING a period of unprecedented contraction in the retail jewelry business. In 1997, we had almost 28,000 retail jewelers; in 2017, it was down to 21,000 and by the end of 2018 was likely below 20,000. You could make the argument that the strongest will survive and become even stronger, but the big question looms, what do I do now that business is down? Here are three tips that may help.

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Rooftop Burglars Take Everything from Jewelry Store

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Video: No, I Won’t Help You Commit Fraud … But Thanks for Throwing Water in My Face

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1. RENEGOTIATE EVERYTHING. You know the old saying that everything is negotiable? Well, everything can be renegotiable, if you try hard enough. The above-market lease that you signed years ago may be ripe for renegotiation at a lower, more realistic rent if you sign a new longer-term lease. The last thing your landlord wants is another empty space in his strip mall, especially when you’ve been a good long-term tenant. I’ve had great success in lowering my fixed monthly expenses for basic things like Internet, cable, phone, even garbage pick-up and window washing. In most cases, all I had to do was ask. Look at lowering all your fixed expenses and you’ll be amazed how much money you can save.

2. TRIM THE FAT. Take a hard look at your variable expenses. There are so many useless things jewelers spend money on. $300 a month for fresh flowers is a great example. I’m sure you won’t lose that bridal sale by displaying silk roses. One store I know used to spend $500 a month on ice cream and snacks for their employees, a nice gesture but not necessary. You can always cut back without cutting things out entirely. When you look at what you spend money on, you’ll be amazed at what just doesn’t make financial sense anymore in our current business climate.

3. ANALYZE YOUR STAFFING. When your gross sales are down, you must adjust your staffing levels accordingly. When you analyze your sales hourly, you may find it doesn’t make sense to have three people on in the final half-hour if you don’t do very much business then. You may even want to consider closing a half-hour earlier. Your staff probably won’t mind, and you will save thousands of dollars a year with just this small adjustment. If your customers aren’t shopping in the evenings anymore, perhaps a total overhaul of your hours are in order.

All of these suggestions may not work for everyone, but the goal is to get you to think about how you can save money and remain profitable. “Business as usual” just doesn’t work in today’s business climate.

Evan James Deutsch is founder and president of Evan James Limited, a 30-year-old AGS Fine Jeweler located in Brattleboro, VT.

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David Geller

Why David Geller Says You Should Sell Lab-Grown Diamonds

You’re a merchant, so sell the customer what they want.

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ONE OF THE JEWELER pages on Facebook has been discussing whether a store should stock and sell lab-grown diamonds. The dad says no, while the millennial son says, “I think we should try it.” The reader vote is split about 50/50.

Can we talk about making a living here for a moment? And selling consumers what they want?

Rooftop Burglars Take Everything from Jewelry Store
Headlines

Rooftop Burglars Take Everything from Jewelry Store

Video: No, I Won’t Help You Commit Fraud … But Thanks for Throwing Water in My Face
Cullen Wulf

Video: No, I Won’t Help You Commit Fraud … But Thanks for Throwing Water in My Face

Video: When Should a Jeweler Fire Someone?
Jimmy Degroot

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Customers want to know their options and make their own decisions. Be their personal shopper.

I started in 1974 as a trade shop. I used to do work for a store at our mall, Wellington Jewels. I sized the gold rings they sold and set stones.

What stones? Strontium titanate. It’s a diamond simulant that has colors like an opal. Hardness on Mohs’ scale? About 5.5! But sparkle, oooh weeee!

The store was mostly black walls and showcases, with bright lights to make the stones pop. They made great money, and these are diamond look-alikes with the hardness of an opal. The mountings were 14K gold with real melee diamonds. They didn’t sell much fashion, which I told them was crazy, because a woman can only buy so many engagement rings.

I became friendly with the store manager and she agreed. So I ordered a dozen at a time in fashion mountings from a catalog, furnished the mountings and diamond melee, and she gave me center stones, which I set. They’d sell most of each dozen I gave them within five weeks.

So let’s talk profits on this product. All merchandise was quadruple markup.

They gave a lifetime warranty on these stones. If the stone scratched or chipped or fell out, they’d replace them for 50 percent of the price (so they still made keystone).

This was junk compared to lab-created diamonds. Remember: a lab-created diamond will last as long as the human does.

What about resale value? Well, they can’t get their money out of what they spent on your natural diamond, so try lab-created, make a better margin and keep that young person from buying it someplace else.

When you quote a price to a customer for anything, you may be thinking, “They aren’t talking. Maybe I should come down on the price. OMG I need to make payroll this Friday.”

They may be thinking: “Darn, my student loan note is due at the end of the month. Maybe I should opt for a lab-created diamond. I can’t tell the difference and we need to save for a house.”

Be their personal shopper, make a customer happy and make some money!

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Editor's Note

These Are The Three Factors Driving Revolution in the Jewelry Industry

All three are technology-based.

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WHEN A BUSINESS REVOLUTION arrives, there’s no stopping it. Your only options are to ignore it and die a slow death, or join it and learn, quickly, how to do business within the new paradigm.

Three powerful pistons are driving revolution in the jewelry industry. The first is e-commerce. Some retailers have complained of manufacturers going direct to consumers, but many are now learning to compete in the online space as well. We just started judging this year’s crop of America’s Coolest Store contestants, and we are impressed not only by how many of the applicants sell online, but also by the quality of their websites. Read about retailers doing e-commerce right in our story, “E-Commerce For Everyone,” beginning on page 74.

The second piston is the lab-grown diamond phenomenon. The category continues to gain traction among consumers, and largely driven by consumer demand, not marketing. Read about Soha Diamond Co., a retailer who sells only lab-grown diamonds and gemstones, in our “Talkin’ ‘Bout a Revolution” story starting on page 63.

The third piston is social media, which offers retailers the opportunity to engage local consumers for very little monetary investment. Social media is where the people are; it’s just a question of how to reach them, and then how to interest them in your jewelry and your store.

A revolution is on your doorstep, whether you like it or not. Will you join it or be left behind?

Trace Shelton

Editor-in-Chief, INSTORE
trace@smartworkmedia.com

Five Smart Tips You’ll Find in This Issue

  • During slow times, take photos of all waxes not already in your CAD library and add them. (Manager’s To-Do List, p. 46)
  • Use an aggressive commission to incentivize salespeople to sell old items. (Ask INSTORE, p. 108)
  • Present customers’ kids with gift-wrapped presents to make them feel special. (Tip Sheet, p. 98)
  • Match the percentage of marketing dollars spent on a department with its store performance. (David Brown, p. 112)
  • Make a list of all verbal buying cues and have staff practice their question closes for each. (Sales Truths, p. 112)
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Dave Richardson

24 Verbal Buying Signals Your Sales Staff May Be Missing

Do this exercise to improve your team’s closing ratio.

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WHY IT IS TRUE: The customer will say things that indicate they are ready to buy, but many salespeople talk right through these cues.

PLAN OF ACTION: During a meeting with your staff, write these verbal buying signals on a flip chart and ask your staff if they can think of any to add to the list.

  • Do you take credit cards?
  • I really like it.
  • I think she’ll like it.
  • Do you have a warranty program?
  • Will you gift-wrap it?
  • You provide an appraisal?
  • What if she doesn’t like it?
  • What time do you close tonight?
  • Do you have it in white gold?
  • Will you be able to size it for me?
  • If I buy it, when can I pick it up?
  • I really like the feel of it.
  • I really like the way it looks on me.
  • Can I put it on my store credit?
  • Can you engrave it for me?
  • You have a layaway plan?
  • Since I can’t take until it is sized, do you deliver?
  • Does it come in a box?
  • How can I care for it?
  • Do you have the matching earrings?
  • Can I borrow a calculator?
  • If I buy the ring, will you pay the tax?
  • What is your return policy?
  • What do you think?

Then, divide your salespeople into groups of two or three and have them write the appropriate closing question to each one of the verbal buying signals. Then you can compare the results.

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