To retail successfully, a jeweler must track inventory regularly, say jewelers and business experts. “That’s the key,” says Terry Ianuale, director of merchandising for Scull and Co. and a veteran jewelry retailer. “Monitor them closely for key items, best price points, and fast sellers and restock quickly. Many jewelers don’t really study their [inventory and sales] numbers. If they can’t, they should designate someone to keep them informed.”
To identify best sellers and inventory turns, a jeweler needs a system, says veteran jeweler and retail consultant Janice Mack of Performance Concepts Inc. “Identify your inventory categories and the products in them,” she advises. “Under ‘precious metals,’ for example, is ‘gold jewelry.’ Under that is ’14k jewelry’ and under that, items like ‘earrings’ or ‘chains.’ When you have the categories and a reasonable breakdown of their products, see how much inventory and investment is in each. Look at each one’s turn and calculate your ROI (return on investment).”
Monitoring. There are many ways to monitor merchandise. Inventory control computer software can be programmed to generate reports by day, week, month, and year and by department, category, price, or item. Reports can let a jeweler see, for example, how well emerald rings sell and at what price, and alert him when to reorder.
Sales and turnover also can be tracked manually. One simple way is to put date codes on merchandise tags as inventory arrives, says retail consultant Lori Askew of the Vantage Group. When an item is sold, remove the tag and tape it to the store’s daily receipt. In a short time, when recapping, a jeweler sees how long items are in stock, and which are fast sellers.
Salespeople also can monitor inventory, notes Askew. “Ask them individually and in staff meetings what customers want, what’s selling, and what isn’t. Be sure they pay attention to what customers want. Give them small notebooks to jot down sales not made because items are out of stock, not available at prices requested, or not carried by you.”
MBWA. Another effective monitoring method, says Jeff Buzbuzian of Knar Jewellery, Waterloo, Ontario, Canada, is MBWA—”Management by Walking Around.”
“With inventory and sales reports in hand, spend an hour a day walking around your store to see what’s in now, missing, or not selling,” Buzbuzian advises. “Focus on one department at a time. Talk to staff. Look at its inventory. Look at displays. Does a light need changing? Is merchandise unpolished? Is it in the wrong showcase?”
Turn and reorder. Reorder fast turners promptly. “Many jewelers reorder only when a vendor calls or at trade shows, because they’re bogged down in daily business,” notes Terry Ianuale. “But if you neglect merchandise turns, you lose sales. As soon as you see something turning quickly, reorder it!”
A jeweler should reorder fast sellers at least every two weeks. Every two or three days is better. Jeweler Tom Light in Hattiesburg, Miss., for example, is “on the phone [reordering] two or three times a week, especially bread and butter items like four-prong Tiffany settings.”
Prompt restocking “maintains the turn rate of—and ensures your inventory dollars are invested in—merchandise that works best for you,” says Ianuale. One Northwest jeweler’s review, for example, showed gold earrings were selling quickly, thanks to women who worked in nearby offices. She reordered often and was never out of stock. Result: They turned nine times in a year.
While turnover rates differ among stores, “the average overall turn for most jewelry stores is about 0.8,” says retail consultant Janice Mack. “If a jeweler stays on top of his or her fast sellers, that can increase up to 2.5 annually in some categories.”
We asked the JCK retail panel the following questions about their best sellers:
When times are tough economically, either locally or nationally, what are your best-selling products and services?
|* Equals more than 100% due to multiple answers. Source: JCK Retail Panel, February 2002|
|Diamond stud earrings||25.4|
|Resizing, remounts & redesign jewelry||17.7|
|What products or services sell more slowly?|
|Big ticket color||25.7|
|High-end large diamonds||21.9|
|High end watches||19.0|
|Large diamond bracelets||17.1|
|Large diamond rings||16.2|
|Large diamonds – stones||13.3|
|High couture type fashion baubles||13.3|
|Big ticket items||12.4|
|Large gold necklaces & bracelets||11.4|
|Large diamond necklaces||8.6|