By Don Greig, Owner, Focus Business Management Institute
“Failing to plan is planning to fail”. – Unknown
Having an successful procuring plan is among the keystones to retail jewelry store prosperity. Bear in mind that each and every month ends a previous 12 month trading cycle and begins a new one. How well you strategy your buying for the next 12 months will influence your success.
SUPPLIERS We are all acquainted with the Pareto principle: 80% of the effects come from 20% of the causes. The exact same holds accurate for your suppliers. Your top 8-10 companies ought to be producing 80% of your sales. Therefore, if you would like to increase your annual sales by 30%, you will need to have to enhance the sales of your top suppliers by the identical amount. What supplier wouldn’t want a 30% annual improvement in sales? Let them realize precisely what your plans are and precisely what you may want from them so as to make it occur (e.g. faster shipping and delivery time, far better terms, much more aggressive balancing).
Additionally, you must be replacing those suppliers that aren’t offering you what you will need – even if they have been a tried and true provider for numerous years. We have found that as trade cycles change, so do the organization models and customer service levels of the wholesale suppliers. You’ll want to make the changes to your company that will enable you to succeed now. Go out and come across suppliers who’ve stunning merchandise in a price point (over $1000 average retail sale) that will assist you to move to the next step. You also want to come across a few far more diamond vendors who’ve the good quality, cut, and cost you need to pay. You are going to discover these suppliers at the Luxury Show, the JCK show, the Continental Acquiring Group, Centurion, and the IJO show.
SPENDING “You’ve got to spend money to make money.” This is accurate, but it is how you invest your funds that’s the critical element to success. Retail jewelers look at their monthly spending and tend to feel, “Wow. I don’t need to spend that much this month on stock simply because I’ve this and that to pay” and then they don’t stock their store properly. Remember, a retail jewelry store doing $1 million in annual sales will spend at the least $500,000 on product over the next 12 months. When you don’t invest cash on the stock, you won’t have it in the store, and you can’t sell it.
This $500,000 is your open to purchase for the year, an average of $40,000 per month. This is very easily extrapolated; a $2 million store will spend $1 million ($80,000 per month); a $3 million store will invest $1.5 million, ($125,000 per month), etc. This is a lot of income and how wisely you invest it’ll totally control your prosperity.
BUYING Spending just isn’t buying. Spending is having funds leave your bank account. Buying will be the method of understanding what you will need and then spending the money needed to obtain it. If you go to the tradeshows these figures really should be foremost in your mind. You’re not checking out the shows to look around; you are headed to the shows to purchase really wonderful diamond semi-mounts, diamond pendants, bracelets and earrings 1 piece at a time. It is best to also know what price points of what item you must effectively stock your store and have the wholesale price already calculated to ensure that you are able to guarantee an intended target of 130% standard markup.
Diamonds and color will need to yield 80% of your sales, with the diamond divisions accounting for 62% of sales and the color departments comprising the remaining 18%. The rest of your store will account for the remaining 20% of your enterprise, but your focus wants to be on how you purchase the items in this 80% group. You need to be looking to acquire gorgeous pieces that fall into the $3,750, $6,500, $15,000, and $25,000 retail price ranges.
When attending the trade shows, be sure to quit by the Chinese along with the Indian pavilions to see the new exciting trends that are coming into the United States. Visiting these sections also gives you a broader worldwide perspective of what’s going on within the jewelry business these days.
What is your forecasted open to purchase? The table down below shows just how much you need to be looking to prudently invest at the trade shows, along with the quantity of old stock that you simply should actively stock balance (or exchange) with your distributors.
A solid getting 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 well you may profit, within the next calendar year.
Focus BMI might be attending the following trade shows in 2011, and attends most of the significant trade shows within the US on a yearly basis.
Luxury Las Vegas (Booth LUX998) :: JCK Las Vegas (Booth LUX998 ) :: CBG Las Vegas (Booth 519) :: IJO Nashville (Booth TBD) :: Centurion (Booth TBD)
We welcome you to pay a visit to our booth for a custom purchasing analysis plan.
Don Greig is founder and President of Focus Business Management Institute, the industry leader in retail jewelry consulting. By means of a custom-made analytics computer application which has been perfected over the past 30 years, the staff at Focus BMI are able to provide you with a pinpoint evaluation of the inventory items you will need inside your store and at what cost points, to be able to optimize your successes.
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Tags: Business, consulting, inventory management, Jewelry, Management, retail, stock balancing