By Don Greig, Owner, Focus Business Management Institute
“Failing to plan is planning to fail”. – Unknown
Having an helpful buying plan is one of the keystones to retail diamond jewelry store prosperity. Keep in mind that each month ends a previous 12 month trading cycle and begins a brand new one. How nicely you plan your buying for the next 12 months will control 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 vendors should be producing 80% of your sales. Consequently, if you want to increase your annual sales by 30%, you’ll want to improve the sales of your top suppliers by the exact same amount. What supplier wouldn’t want a 30% annual increase in sales? Let them be aware of what your ideas are and what you may require from them as a way to make it occur (e.g. quicker distribution time, greater terms, a lot more aggressive balancing).
Moreover, it is best to be updating those providers that may not be giving you what you need – even if they’ve been a tried and accurate provider for several years. We have discovered that as business cycles alter, so do the company models and customer service levels of the wholesale suppliers. You should make the adjustments to your small business which will help you succeed now. Go out and uncover distributors who’ve attractive merchandise in a price point (over $1000 average retail sale) that may enable you to move to the next step. You also want to discover a couple of extra diamond vendors who’ve the quality, cut, and price you need to pay. You are going to uncover these suppliers at the Luxury Show, the JCK show, the Continental Acquiring Group, Centurion, and also the IJO show.
SPENDING “You’ve got to spend money to make money.” This is true, but it is how you spend your money which is the essential element to success. Retail jewelers take a look at their monthly spending and tend to feel, “Wow. I don’t wish to invest that a lot this month on stock because I have this and that to pay” and then they don’t stock their store correctly. Bear in mind, a retail jewelry store doing $1 million in annual sales will spend a minimum of $500,000 on items over the next 12 months. When you don’t invest cash on the stock, you won’t have it within 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 easily extrapolated; a $2 million store will spend $1 million ($80,000 per month); a $3 million store will spend $1.5 million, ($125,000 per month), and so on. This is a lot of income and how wisely you invest it’ll completely control your prosperity.
PURCHASING Spending is not buying. Spending is having income leave your bank account. Purchasing is the process of knowing what you need and then spending the money necessary to obtain it. After you go to the tradeshows these figures need to be foremost within your mind. You are not heading to the shows to peruse; you might be checking out the shows to buy really stunning diamond semi-mounts, diamond pendants, bracelets and earrings one piece at a time. You ought to also know what cost points of what item you have to properly stock your store and also have the wholesale cost already calculated so that you’ll be able to ensure an intended target of 130% everyday markup.
Diamonds and color must yield 80% of your sales, with the diamond departments making up 62% of business as well as the color departments comprising the remaining 18%. The rest of your store will account for the remaining 20% of your enterprise, but your focus requirements to be on how you get the items in this 80% group. You should 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 stop by the Chinese and also 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 is going on within the jewelry industry today.
What is your planned open to purchase? The diagram listed below shows how much it is best to be looking to carefully invest at the trade shows, together with the quantity of old stock that you simply really should attempt to stock balance (or exchange) with your vendors.
A solid acquiring plan is essential to the success of your retail jewelry store. Keep in mind: 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 is going to be attending the following trade shows in 2011, and attends most of the key trade shows in the US on a yearly basis. Please be sure to come visit us at IJO Nashville – 2011.
We welcome you to come by our booth for a custom purchasing analysis strategy.
Focus Business Management Institute is considered the worldwide pioneer in retail jewelry business consultation services. Through a proprietary statistical service which has been improved upon over the past three decades, the staff at Focus BMI are able to offer everyone with a clear report on the inventory you really require inside your company as well as what cost points, so that you can increase your prosperity.
