Shanu, Thank you for raising this important question. I myself was wondering about this. I could not find any particular information online either. I'll be watching this blog for responds. Best of luck to you, Gary www.therussianstore.com

Hi Shanu, great question. I was wondering myself too, about the appropriate percentage of sales one should take out of a jewelry store as a salary. The problem I'm sure many owners are facing is that, while the inventory value keeps on going up, it is difficult to take anything out of the business, especially when the goal is towards expansion. A simple example is when you have 10 new items for sale. It is highly improbable for you to tell all ten items (we usually achieve about 60%). Those four items eventually, become bad stock. The profits from the six items, you go on to prepare another 10 items for sale... and it starts all over again. So, inventory keeps on going up. We hold a yearly sale with significant discounts with the purpose of getting rid of the bad stock. And we make it a point to ONLY do this once a year, unlike many jewelers who unscrupulously hold 10 big sales a year to entice unknowing customers. Due to this, many customers anticipate this event and the bulk of our income comes in during this month. Only then do I take a percentage out of the business as my bonus, usually around 20-25% of gross. Other than this particular month, I have a fixed monthly salary. Any other jewelers here with their thoughts on this? Would love to hear everyone's response.

JCK's Annual Salary Survey (every November) lists a hugely disparate range for owners' salaries, starting as low as $20,000 a year, and going well into six figures. On the ultra-low end, one can only assume that the owners are writing off their basic living expenses to the store, rather than paying themselves a salary. I can't comment on the right or wrong, but I also can't see anyone wanting to own a business only to earn little more than $10 an hour.