Out With the Old, In With the New Inventory

Q: What is the best way to get rid of old inventory for a fresh start in 2011?
—David Necker, co-owner, Necker’s Jewelers, Davenport, Iowa, and DeWitt, Iowa

A: “We have good relationships with our vendors to return merchandise that isn’t doing well. But we do everything we can to sell old inventory. We have the ‘retirement’ case for jewelry that hasn’t sold for one year to 18 months. We’ll start with an initial discount—on average about 30 percent. If it isn’t selling, we discount further. When the discount reaches 50 percent, it gets a color-coded tag and becomes part of a sales-team spiff program. If associates can sell a piece above the 50 percent discounted price, they keep the difference—in cash. As a last resort, we repurpose the piece for our repair and custom departments.”
Bill Carstens, owner, Schnack’s Fine Jewelry, Alexandria, La.

“I’ve started sending ‘Make Me an Offer’ e-mails. [I send] a picture of the item with product details, and I ask for a reasonable offer. We also have a ‘Make Me an Offer’ case in the store. A spiff program I developed is selling the ‘old dogs.’ In the staff area, I have a board showing cards with pictures of actual dogs and the old jewelry. The cards are pinned to the doghouse. When the item is sold, the card is taken out of the doghouse and moved to another part of the board with the receipt to reward the salesperson. We also work with ARMS [software] to run two-day, 50-percent-off sales. It’s an event that attracts sales shoppers, so we promote it differently. On average with these sales we do $30,000 to $50,000.”
Stephenie Bjorkman, owner, Sami Fine Jewelry, Fountain Hills, Ariz.

“Throughout the year we attack the issue head-on with vendors, but do what we can to settle old inventory matters in-house. It’s nothing structured. If the group does well in selling old inventory, then we have a group outing. I’ve even noticed that an ‘attaboy’ works well—people respond to praise for a job well done. I’ve also done inventory swap meets with other retailers in other markets. But you have to work with like-minded ­retailers—store owners who sell similar merchandise who realize switching jewelry is simply switching assets. I still operate under the mindset that my inventory is an asset and that I should get something in return, be it profit from a customer sale or an even exchange for ‘new’ inventory from another retailer.”
Lucian Lee, owner, Hale’s Jewelers, Greenville, S.C.

“Sell it before it gets old. We don’t run sales. If something gets old enough, we send the gold to the refiner to get the value out of it. Jewelry must be two to three years old before we pull it out of stock.”
Bernie Butterfield, CEO/owner, Butterfield Jewelers, Albuquerque, N.M.

“We’re creative using old inventory in the remount section—taking a ring and turning it into a necklace. We also give added value. For example, if you buy a piece out of our closeout case, we’ll give you a gift certificate for a future purchase or for our café or home-goods store— depending on the piece. We’ll also donate a portion of sales from the closeout case to charity. I don’t want anything in the store that’s over two years old. We’re trying to get into an 18-month cutoff, then a 12-month cutoff.”
Dean Brinker, owner, Brinker’s Jewelers, Evansville, Ind.

“[We’ll] offer a featured value of the week. We promote that in a monthly newsletter, telling customers to come in or contact us to find out what the weekly piece is. The majority of the pieces are over a year old; sometimes we mix in a newer piece so it doesn’t seem like it’s always something that’s not selling.”
Laura DeWoody, owner, Laura DeWoody Jewelers, Pittsburg, Texas

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