By Don Greig, President, Focus Business Management Institute
“Failing to plan is planning to fail”. – Unknown
Having an efficient procuring strategy is one of the keystones to retail jewelry store profits. Remember that each and every month ends a previous 12 month trading cycle and begins a brand new one. How well you plan your buying for the next 12 months will control your success.
SUPPLIERS We’re all familiar with the Pareto principle: 80% of the effects come from 20% of the causes. The exact same holds true for your vendors. Your top 8-10 companies will need to be producing 80% of your sales. As a result, if you want to improve your annual sales by 30%, you may need to have to boost the sales of your top suppliers by the exact same quantity. What supplier wouldn’t want a 30% annual increase in sales? Let them be aware of exactly what your strategies are and precisely what you may need from them so that you can make it happen (e.g. quicker delivery time, better terms, extra aggressive balancing).
Additionally, you need to be switching those suppliers that may not be providing you what you need – even if they’ve been a tried and true provider for many years. We have found that as industry cycles change, so do the corporate models and customer service levels of the wholesale suppliers. You need to make the adjustments to your enterprise that will help you succeed now. Go out and locate vendors who have attractive merchandise in a selling price point (over $1000 average retail sale) that will assist you to move to the next stage. You also have to have to locate a few additional diamond vendors who’ve the high quality, cut, and cost you need to pay. You are going to find these suppliers at the Luxury Show, the JCK show, the Continental Acquiring Group, Centurion, as well as the IJO show.
SPENDING “You’ve got to spend money to make money.” This is true, however it is how you invest your income that is the important element to success. Retail jewelers examine their monthly spending and tend to think, “Wow. I don’t need to invest that much this month on stock mainly because I have this and that to pay” and then they don’t stock their store properly. Bear in mind, a retail jewelry store performing $1 million in annual sales will spend at least $500,000 on items over the next 12 months. In the event you don’t spend revenue on the stock, you won’t have it in the store, and you can’t sell it.
This $500,000 is your open to buy for the year, an average of $40,000 per month. This is very easily extrapolated; a $2 million store will invest $1 million ($80,000 per month); a $3 million store will invest $1.5 million, ($125,000 per month), and so on. This is actually a lot of funds and how wisely you spend it is going to totally control your prosperity.
PURCHASING Spending just isn’t buying. Spending is having funds leave your bank account. Getting will be the method of understanding what you need and then spending the dollars required to get it. Whenever you go to the tradeshows these figures ought to be foremost within your mind. You’re not visiting the shows to look; you might be going to the shows to buy very beautiful diamond semi-mounts, diamond pendants, bracelets and earrings 1 piece at a time. You should also know what cost points of what item you’ll want to sufficiently stock your store and have the wholesale price already calculated to ensure that you could guarantee a target of 130% standard markup.
Diamonds and color must yield 80% of your sales, with the diamond sectors making up 62% of sales and also the color departments comprising the remaining 18%. The rest of your store will account for the remaining 20% of your business, but your focus requirements to be on how you invest in the items in this 80% group. You must be seeking to acquire gorgeous pieces that fall into the $3,750, $6,500, $15,000, and $25,000 retail cost ranges.
When attending the trade shows, make sure to quit by the Chinese along with the Indian pavilions to see the new exciting trends which are coming into the United States. Visiting these sections also gives you a broader worldwide perspective of what exactly is going on inside the jewelry business currently.
What’s your planned open to purchase? The diagram directly below shows just how much you must be looking to sensibly spend at the trade shows, together with the amount of old stock that you need to actively stock balance (or exchange) together with your distributors.
A solid buying plan is vital to the success of your retail jewelry store. Don’t forget: What you do purchase at these shows is dictating what you will sell, and how nicely you will profit, inside the next twelve months.
Focus BMI are going to be attending the following trade shows in 2011, and attends most of the major trade shows within the USA on a yearly basis. Please be sure to come visit us at the IJO show in July.
We welcome you to head over to our booth for a custom acquiring analysis plan.
Focus Business Management Institute stands out as the nationwide leader when it comes to retail jewellery company advisory services. Through a custom-made statistics service that has been perfected over the last 30 years, the personnel at Focus BMI can give almost any individual with a clear article on the merchandise you really require inside the business and at exactly what price points, to be able to enhance your results.
