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.
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.