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How Many Times a Year is Too Many to Buy?
March 30, 2008
With the launch of InStore Magazine’s trade show next April—that’s just one more show you might want to add to your list. Four hundred booths compared to JCK’s 183 booths in just the Hong Kong Pavilion.
Living close and not having to fly far to any show is always a plus--Dan Kisch, InStore publisher boasts, “Not only are there more than 3,100 independent jewelry stores within a 350-mile radius of Chicago, but no jeweler in the country is more than a three-and-a-half hour flight away from our event.” But—how many shows are too many? How many times should you really be buying a year?
Talking to “old schoolers” (meaning my parents generation) they bought only twice a year—once in January, usually at JIS Miami (because it was driving distance), and then at the JCK show in the beginning of June. Sometimes they also bought right before Christmas, taking advantage of replacing and refreshing fashion forward pieces and price points pieces for the upcoming holiday season. I noticed this trend amongst many first generation jewelry store owners and unfortunately ones who have taken over their parents businesses are falling into the same trap.
Wayne Levy’s article, Setting Inventory Levels and Controls talks about the reasons refreshing inventory and buying inventory on a regular basis is important—such as:
- Higher gross margins on things like simple gold chains which should be stocked and reordered at all times.
- Buying more often helps you manage payables.
- Helps maximize inventory turnover.
But again—how many times a year is too many to buy? Over buying can create a large problem when managing accounts. Many vendors loosely throw out offers of six months no payments but then January rolls around and your vendors are hounding you about every little dime. For ones with great credit—vendors send boxes of merchandise telling them to keep it on memo and pay when you sell. When I opened the store I took advantage of many of these offers—but now the store has begun to pick up and I’ve realized establishing relationships with few vendors is more beneficial to my business. Those few vendors are ones that offer me terms and have helped my business grow.
How many times should you really be buying a year? How many times are helping you to increase turnover, take advantage of higher gross margins, and manage payables?
Posted by Shanu Singh Guliani on March 30, 2008 | Comments (0)
