Edge Retail Academy Blog

What’s Trending

Edge Pulse and Aggregated Data

At The Edge Retail Academy, we aggregate data from close to 800 stores, through Edge Pulse. This allows us to give you up-to-date and meaningful reports and stats. Take a look at some of these stats below…

Diamond Engagement Rings

 

How do your Engagement Ring sales compare to the Average Store sales? This aggregated data indicates a decrease in sales by 1.7% with an increase in the average sale being $1,969 and average discounting down, at 28%.

 

Diamond Engagement Rings

 

How do your Diamond Wedding Band sales compare to the Average Store sales? This aggregated data indicates an increase in sales by 10% with an increase in the average sale being $1,146 and average discounting down, at 22%. Great News!

 

Future Growth Projections

by David Brown

This article will help you to create a roadmap so that you can measure your progress towards your sales and profit goals. It is important to achieve your future wealth and retirement goals.

Monthly Sales Analysis

Following our example of ‘GAP’ Sales of $1,062,265, we now need to break the annual budget down into realistic monthly targets.

Because not all months are created equally we need to divide the annual budget into relevant ‘seasonal’ proportions. For example, December sales for most stores represents between 20-22% of total annual sales whereas other months can be as low as 5%.

We suggest you look over at least three (3) years sales history trends to help even out any exceptional highs or lows – see Table 1 below.

help even out any exceptional highs or lows – see Table 1 below.

Month 2014 2015 2016 Average
$ % $ % $ % $ %
January          48,750 7.50      52,500 7.00      51,000 6.00        50,750 6.77
February          45,500 7.00      52,500 7.00      59,500 7.00        52,500 7.00
March          42,250 6.50      48,750 6.50      55,250 6.50        48,750 6.50
April          45,500 7.00      52,500 7.00      59,500 7.00        52,500 7.00
May          42,250 6.50      48,750 6.50      55,250 6.50        48,750 6.50
June          42,250 6.50      52,500 7.00      68,000 8.00        54,250 7.23
July          42,250 6.50      48,750 6.50      55,250 6.50        48,750 6.50
August          45,500 7.00      52,500 7.00      59,500 7.00        52,500 7.00
September          48,750 7.50      56,250 7.50      63,750 7.50        56,250 7.50
October          48,750 7.50      56,250 7.50      63,750 7.50        56,250 7.50
November          55,250 8.50      63,750 8.50      72,250 8.50        63,750 8.50
December      143,000 22.00    165,000 22.00    187,000 22.00     165,000 22.00
Total Sales:      650,000 100.00    750,000 100.00    850,000 100.00     750,000 100.00

 

In this table, you will notice that for the month of June (highlighted), sales have ranged from 6.5% in 2014 to 8% in 2016 with the average being 7.23%.

Therefore, if the average June contributes 7.23% of total sales then your budget for next June would be $76,802 i.e. 7.23% of $1,062,265 equals $76,802.

If you do not have history going back this far then either go back as far as you can and draw your own conclusions or use the Industry averages.

Please take into account any months with unusual trading patterns such as sale months, closed for remodeling, etc. as these can distort the normal seasonal breakdown.

 

Daily Sales Analysis

We would also suggest breaking the monthly goal into a Daily Goal. The easiest way to do this is simply to divide the total sales goal by the number of trading/selling days. For example, if the budget for June is $76,802 and your store is open for 25 days, then your daily budget is $3,072 i.e. $76,802 divided by 25 days equals $3,072 per day.

Table 2 below shows what a monthly breakdown might look like:

Month 2016 Goal Running Totals Trading Days & Ave $
$ % $ % # $
January 71,915 6.77 71,915 6.77 25 2,877
February 74,359 7.00 146,274 13.77 23 3,233
March 69,047 6.50 215,321 20.27 25 2,762
April 74,359 7.00 289,680 27.27 25 2,974
May 69,047 6.50 358,727 33.77 24 2,877
June 76,802 7.23 435,529 41.00 25 3,072
July 69,047 6.50 504,576 47.50 22 3,139
August 74,359 7.00 578,935 54.50 23 3,233
September 79,670 7.50 658,605 62.00 24 3,320
October 79,670 7.50 738,275 69.50 24 3,320
November 90,293 8.50 828,568 78.00 22 4,104
December 233,698 22.00 1,062,265 100.00 23 10,161
Total Sales:    1,062,265 100.00    1,062,265 100.00 285 3,727

 

If you want to strive for ‘Best Practice’ then your daily goal can be broken down between the sales team. For example, if Mary typically does 25% of the sales then her personal goal for June would be $19,201or $768 per day.

Again, the easy part is setting the sales goal, the challenge is ‘how’ to achieve it consistently.

Action Steps:

  1. Calculate the average percentage contribution made by each Month using three years of historical sales data or Industry Benchmarks.
  2. Divide your annual sales goal by the percentages in Action Step 1 (as per Table 1) to arrive at a monthly goal.
  3. Get a Calendar out and work out the number of days you will be trading/selling in each month.
  4. Now divide your Monthly goal by the number of trading days (as per Table 2) to arrive at a daily sales goal.
  5. We recommend you split your sales goal between the sales people so you can manage their activities and measure their results.
  6. Implement a Daily Team meeting, to keep everyone in the loop and on track.
  7. ‘TMT’ it. Test Measure and Tune your strategies and results.

If you would like help with setting goals for maximum performance from your team as well as strategies in helping you achieve your sales goals, please contact Becka Johnson Kibby, 714-925-2456 or Becka@EdgeRetailAcademy.com

Are you Ready to Buy?

 

by David Brown

Purchasing stock is an ongoing task; However, the question most store owners don’t ask themselves is whether they are ready to buy. It’s worth brushing up on buying basics.

Whether dealing with sales representatives in-store or attending jewelry trade shows, the process of buying stock is ongoing. There are store owners who have a good handle on what they need when purchasing but there are plenty who don’t. In fact, retailers might find they are not well-informed enough to make strategic buying decisions when the time comes. So, are you prepared to buy?

Retailers are always prepared to buy new items – a look at their increasing product levels readily confirms that – but what it really means to be prepared to buy is whether retailers have done enough groundwork before heading to buying group meetings and trade fairs.

As a starting point, look at your stock reports for the last six to 12 months. Has your product holding increased? Do you have more stock now than at the beginning and if so, was it planned and have sales increased as a result? If not, this is a sign that cash flow could shortly become an issue. If you are holding more product – and you’ve paid for it and not achieved increased sales – then that also means a corresponding reduction in available cash or an increase in debt. This can only be sustained for a short period of time.

If stock levels are higher (than your optimum stock level) then you need to address how you will fund any new purchases. Do you have the money to do it or will you need to reduce your current levels of product to provide the cash for new product? If not, then you probably don’t need to buy. In fact, your cash flow may have already told you that. Unfortunately, when completing this exercise, most storeowners have a higher level of stock than they did six to 12 months earlier. Few have less.

In the majority of cases, this is not natural growth but an oversupply of product that hasn’t moved, which is jamming up the works and preventing a business from growing. If you don’t control the old product, it will soon choke the new like weeds in a garden.

PREPARE THE RIGHT WAY

In preparation for buying group meetings and/or trade shows, retailers need, at the very least, a buying plan and budget that matches their sales plan. By all means, research new product lines and suppliers, but if you buy product that wasn’t included in your original buying plan you will need to increase your sales plan accordingly. For example, if you invest $20,000 in a new entrepreneurial line that isn’t part of your existing sales budget, then you need to increase your sales budget by say $50,000 ($20,000 x 1.2 stock-turn = $24,000 x 110 per cent mark- up = $50,400) to include it. Either way, the buying plan needs to match the sales plan or the sales plan needs to match the buying plan.

Print out a supplier report by gross profit for the last 12 months. Are there any suppliers on the first page that have a closing inventory that is level with or greater than their sales? That’s a problem to address urgently. If they are on the first page of the report then they are amongst the better performers so there is an opportunity to discuss ‘stock balancing’ – replacing fast-selling items and returning for credit current models that haven’t sold. Retailers should focus on the top 10 to 12 lines for reasons that will be later explained.

Are there any suppliers that have similar closing stock levels but significantly different sales? Look at this example: Supplier One has sales from you of $85,038 with a closing stock of $13,049, while Supplier Two has sales from you of $20,836 with closing stock of $13,017.

Why is there such a huge variance in performance? Isn’t this something to discuss with both of them? Supplier One has a stock- turn of 2.4, which is great (and no, they are not a bead supplier)

With this in mind, should retailers broaden their Supplier One range a little? Should you re-order twice weekly rather than once a week? Does Supplier One consistently have a high-order fulfilment percentage? This occurs when most of the orders are completely filled. Is there anything still on backorder? Why?

Supplier Two has a stock-turn of 0.6 and much of their stock is on consignment and unpaid. Being on consignment is not an excuse; customers don’t know that and knowing it wouldn’t influence them to buy more anyway. That product that hasn’t worked – for you or them – needs to be exchanged as it isn’t doing either of you any good.

Retailers don’t need to analyze this for all suppliers. Focus on the top 10 as these suppliers are probably providing you with 80 per cent of your store sales anyway. Your report may contain three or four pages, but the majority of information is in the top few lines and this is where your attention needs to be.

This comparison of where product is sourced is a very useful exercise. Naturally, suppliers whose products sell well at a good margin are the ones you should reorder from, while those whose product doesn’t sell well should be paired back.

The 80/20 rule is alive and well, when it comes to stock purchasing. Jewelers need to concentrate their efforts with those suppliers that provide them with the bulk of their sales. The idea is to become more and more important to fewer and fewer suppliers.

By being suitably armed with correct information that supports the sales plan, retailers can ensure they are in the best position to make those choices.

If you would like more information on how we can help you buy better, for more success, please contact Becka Johnson Kibby, 714-925-2456 or Becka@EdgeRetailAcademy.com

 

What’s Trending

At The Edge Retail Academy, we aggregate data from over 755 stores, through Edge Pulse. This allows us to give you up-to-date and meaningful reports and stats. Take a look at some of these stats below…

 

Watches

 

How do your Watch sales for both Gents and Ladies compare to the Average Store sales? This aggregated data indicates an increase in sales by 28% with an increase in the average sale being $1,389 and average discounting down, at 20%. Fantastic news!

 

Diamond Product

 

How do your Diamond Fashion Rings, Diamond Earrings, Diamond Pendants, Diamond Necklace, Diamond Bracelets and Diamond Other sales compare to the Average Store sales? This aggregated data indicates an increase in sales by 7% with an increase in the average sale being $1,221 and average discounting down, at 33%. Great News!

 

Is Recruiting / Hiring Your Fear or Your Friend?

 

by Brian Madson

When you ask an expert, what the top three considerations are, when purchasing real-estate, you always hear, “location, location, location”. In the same way, when asked “how can I increase my store’s sales volume?” the simple answer is “people, people, people”! And not just any people, but the right people.

How do you get the right people?

You can put an ad out or use a recruiting website. But realize, that you will sort through a lot of calls, emails, and resumes from many people who aren’t qualified. You get a lot of “not the right people”.

What about a head hunter? That can cost you up to 30% of a year’s salary. It can be tough to find a good company that can find a sales person for a local independent jewelry store.

Then you go through it all over again the next time you need to hire someone.

No wonder we put up with poor sales performances, less than adequate customer service, or staff that undermine your authority and don’t follow your instruction. It’s easier to suffer through it, than to do something about it. Recruiting is often times a business owner’s fear, so let’s examine how to make recruiting your friend!

When do you need to recruit?

  1. To increase sales: Selecting a recruit with strong sales abilities can increase your store’s sales.
  2. When you are short staffed: If you have an employee, who has left or is going to leave, or your store sales or store traffic has increased and you need more salespeople.
  3. Top Grading: You need to replace underperforming salespeople or divisive, problematic employees.
  4. Leverage: If you can go out and recruit a top salesperson at any time, it will be leverage for you with your staff. If you can’t, or if you hesitate to go out and recruit a top salesperson to replace someone, then that can be leverage against you, to put up with bad behavior.

Make recruiting your friend and do it successfully.

Start by knowing how to attract the right candidate. You’re selling you and your store, your store’s reputation and culture. If you have a good culture and a positive reputation, that will be the strength to lead with.

Culture

Everyone has a culture, some are purposeful and are driven by the owner, manager, the staff, and reflects in the customer’s experience. Other cultures default to the dominant personality in the store. This results in self-serving behavior, delivering a compromised customer experience. If yours is the latter, you won’t be focusing on your culture, but you’ll definitely need to change some of your staff.

Benefits

What are your benefits? What can you offer a recruit? As an independent Jeweler, you have some distinct advantages and some disadvantages. You need to lead with your strongest advantage – shorter hours of operation, maybe closed on Sundays, friendly, family work atmosphere, less of the corporate politics and pressure. It’s not all about money. Time and work/life balance is very important to experienced, successful sales people and managers.

Compensation

How do you compensate? Hourly? Salary? Do you offer commission or bonuses? Do you give a guarantee? What will you be willing to offer a top producing performer? How much could someone make in your store? If they sell more, will they make more?

Any Disadvantages?

What could be a disadvantage? What will you need to minimize in your approach? If you don’t offer health insurance, 401K, vacation or offer limited income if they sell more, you’ll need to address and overcome these issues. It may just limit where you look and who you can attract. And remember, the right people are an asset and an investment whereas the wrong people are a cost.

You want role congruency. That’s the overlapping of what a recruit needs and can offer along with what you need and can offer. You don’t need a lot of people, just the right people. They’re out there!

Where should you recruit?

This is the big question! Where should you recruit? Based on your culture, benefits, compensation, training and the level or ability of the recruit you need, you can determine places that are more likely to have a person that will fit your store’s needs. However, there are exceptions! You can find a great person at a job that they are poorly matched for. This can occur anywhere in many different industries.

To make recruiting your friend and not your fear, you can begin with these general recruiting steps, outlined above. If you would like help with…

  • developing a strategy for your store’s specific recruiting needs,
  • knowing where you should go,
  • deciding the exact steps you should take
  • determining the specific questions you should ask,
  • learning how to pick out the right person, and
  • getting the right person to come to your store

…We can certainly speak with you, to give you more customized strategies and advice.

In the meantime, start using these tips, to make recruiting your friend and learn how to recruit the right people for your store. If you would like additional help in recruiting for your store, please contact Becka Johnson Kibby at Edge Retail Academy: 714-925-2456 or Becka@EdgeRetailAcademy.com

 

Edge Retail Academy has a recruiting expert on their team: Brian Madson. Brian has over 30 years of experience in the jewelry industry. He began his career in Southern California at a small three store chain that had $3 million in annual sales. Brian became a top sales person, then a manager, and helped grow that company to 14 stores with $15 million in annual sales. As General Manager for one of the company’s stores, Brian attained the #1 volume store in the company and held that position for the next 12 years, reaching a company record of $18 million in sales in one year. While there he built a team of over 60 employees, including 10 managers, multiple million-dollar sales writers, customer service associates, and master jewelers. Brian achieved this by personally recruiting, training and mentoring/coaching sales associates and managers to reach record sales and success. Brian next teamed with an independent jeweler with annual sales of over $7 million, where he became part of the executive staff. There, Brian also recruited, trained, and mentored talented sales associates, with one recruit repeatedly surpassing $1 million in annual sales. Brian later rejoined the Southern CA jewelry company, as the Outside Sales/Management Procurement and Assimilation Company Recruiter. He identified and recruited top sales associates and managers in the company’s effort to expand. Brian recruited multiple candidates that grew into million-dollar sales writers and accomplished managers. He also mentored and trained new and existing managers on how to develop successful recruiting habits. He conducted store meetings to broaden recruiting participation of staff and to promote company culture.

As part of The Edge Retail Academy Team, Brian is the Business Growth Strategist. He is expert at developing comprehensive selling systems and “closing the sale” strategies, recruiting and training talented sales people, training store managers, and designing actions plans to increase customer traffic, closing percentages, and average sales. Having walked through the process personally, Brian fully understands what it takes to develop a successful team and works with our clients to help them do the same.

Merchandising Checklist for the Upcoming Show

 

Creating the perfect product mix is an elusive goal. But it is certainly worth shooting for! The high energy of a show is not always conducive to strategic purchasing –factors such as poor lighting, rushing around, late nights, etc. – can affect smart buying decisions. In addition, we always see more compelling product than we have dollars for, which is why you want to have a plan and stick to it.

1 month before the show:

  • Review your Strategic Plan and your Merchandising Plan to refresh your memory as to your objectives
  • Or, brainstorm with your staff on unclosed sales and missed opportunities
  • Compare your YTD results with your objectives – at five months you should have a pretty good idea if you are on track
  • Ask yourself what you are trying to accomplish at the show. Think about what type of product will fulfill your objectives
  • What buying strategies will get you to your 2017 goals? A few examples:
  1. Attract female self-purchasers with bold, fun fashion rings
  2. Expand your bridal clientele with new bridal product
  3. Increase margin with in- house branded collections

3 weeks before the show:

  • Calculate your Open to Buy (OTB), making sure that you allocate dollars to replenishment (don’t forget to factor in your on-order, accounts payable commitments, GL inventory adjustments, and pending return to vendor)
  • The Edge Retail Academy can help you create your OTB, if needed.
  • Start running the appropriate reports that you will need for your buying decisions – by vendor and by classification – to get a general idea of what you need to procure
  • Determine what are your top selling products, and what are your best performing vendors
  • Equally important, review your aged inventory visually – you want to learn from these buying mistakes
  • Start setting up your vendor appointments – don’t count on “swinging by”

2 weeks before the show:

  • Now it is time to get specific! If you have determined a need for bridal semi mounts – drill down in your reports – what metal, shape melee, head shape/size, price point range?
  • Lower your risk by leveraging your top selling product – is it available in another diamond total weight, with a different size/shape center stone, in a different metal?
  • Print out your Vendor Appointment forms for your existing vendors that you will be seeing at the show
  • Run reports so you can fill in the Vendor Appointment form completely
  • Print out several sets of the New Vendor forms, and any of the Agreement forms that you think you may need – remember negotiate upfront

1 week before the show:

  • Re-calculate your Open to Buy – based on sales and receiving your dollars may have gone up or down
  • Do not underestimate the importance of being organized and professional in front of your vendors – prepare all your reports and forms
  • Re-confirm your appointments, and get cell phone numbers so you can contact if you need to

At the show:

  • It is pretty easy to get behind schedule at times, but do call your vendors for a heads-up or to reschedule
  • Ideally, get pictures and pricing, so you can review back at your office or store
  • Gather information on potential new vendors, even if you don’t have the OTB dollars this season – start a file for the next show you will be attending

Post show:

  • Once you have all your pictures and pricing, fill out a New Purchasing Analysis Form for each designer, collection or group of like product
  • Review the forms with your manager, or with your staff and decide what kind of a fit you have with the vendor and which product will help you accomplish your goals
  • Send in your purchase orders with specific ship dates
  • Develop a Product Launch plan, or schedule trainings to ensure the successful sell through of the wonderful product you have just purchased!

What’s Trending

Edge Pulse and Aggregated Data

At The Edge Retail Academy, we aggregate data from over 750 stores, through Edge Pulse. This allows us to give you up-to-date and meaningful reports and stats. Take a look at some of these stats below…

Mother’s Day is right around the corner – Here are a few suggestions.

Colored Stone Rings, Pendants, Bracelets, Earrings and Necklaces, Pearl Strands, Necklaces, Bracelets, Earrings, Rings and Pendants, Other.

The aggregated data indicates in the Average Store that the Average Sale is $542 up from previous year of $460 – Great news!

Diamond Fashion Rings, Diamond Earrings, Diamond Pendants, Diamond Necklaces, and Diamond Bracelets, Other.

The aggregated data indicates in the Average Store that the Average Sale is $1210 up from previous year of $1208 – Fantastic news!

3 Steps to Prioritizing your Profitability

 

by David Brown

One of the drawbacks of being a small business owner is the multiple hats that one has to wear. You will find yourself performing several roles at a time – company director, marketing executive, human resources department, sales executive, production and administration department. The allocation of tasks is easier for big businesses but for a small store with a limited staff, this is difficult.

Many small business owners get trapped in day to day activities and thus do not have time for doing tasks that will make their business more profitable. This is because customers are demanding and there is always a fire to be put out. However, very often, this isn’t the cause for store owners to be trapped sweeping the floor or fitting watch batteries. Frequently, it has to do with wanting to be in our comfort zone.

The first need we satisfy by doing odd jobs is that of certainty or comfort. We are comfortable fitting batteries. We feel less comfortable working on the marketing plan if that is not our strong suit and we are at a loss – hence we conveniently dump it in the “too hard” pile.

The second need we satisfy is that of making a contribution. We know that fitting batteries is an essential task – it is an important cog in the wheel that begins when the customer comes in and ends when they pick up the watch. Others can see our efforts in the daily business activities.

The third need is that of significance. If you create a business where everything depends on your decisions, it will need life support in your absence. But it also creates a sense of importance for you. Believing that “nobody is as good as you” is a good source of self-esteem. Fitting batteries can become an essential task that only you can do.

So how do you get rid of these habits?

  1. Raise the bar for yourself. This does not mean longer hours, but demanding more in terms of the quality of work you do. Imagine if you were working for someone else’s store, would they be happy with your performance as manager? Chances are you wouldn’t survive more than six months working for someone else – there are no consequences of your actions in your own store and neither is there any accountability. Let’s say you are being paid $100 to do your job. Would you still fit batteries? While you may not actually be fitting batteries, this is an example of a job a $10 or $20 per hour person would do. You may not have the staff for these jobs currently, but you can always contract out some of these services. Being too busy to plan your business means being too busy to make a profit.
  1. Plan your day the night before. Prepare a to-do list and include at least one task that helps to grow your business. As soon as you arrive at work, lock yourself in to complete the task; that way even if your day doesn’t go as planned, at least you will have completed your most important task.
  1. Doing the same things will not yield different results. The fact that you’ve read this far indicates you want more out of your business. It is important to take time out to do the tasks that really make a difference or you won’t make any progress.

 The Edge Retail Academy helps you be the most profitable company possible, through our customized business growth plans, built specifically for your needs. If you would like personalized advice on growing your business, please contact us.

Begin with the End in Mind, part 4 The ‘Inventory GAP’, cont.

 

by David Brown

Let’s recap what we have covered in the previous three articles:

Step 1                       –           The ‘GAP’ Analysis

Step 2                       –           The Gross Profit ‘GAP’

Step 3                       –           The Inventory ‘GAP’ – Part 1

Step 4                       –           The Inventory ‘GAP’ – Part 2

If you are serious about achieving your future wealth and retirement goals then please complete these steps before continuing with Step 4, Part 2.

Now that you understand how much inventory you need overall, i.e. across all categories it is time to calculate the inventory requirements in each category.

In order to understand how this works, you first need to understand GROI.

 

Understanding Gross Return on Investment (GROI)

GROI is a formula whereby Markup multiplied by Stockturn equals GROI. For example if your markup is 100% and your stockturn is 0.8 then your GROI is 80 (100 x 0.8).

What this means in real terms is that for every $100 you have invested in inventory, you are generating $80 of gross profit per annum.

Here’s how GROI works in other retail sectors.

Retail Sector Stockturn x Markup % = GROI
Music 5 x 30 = 150
Clothing 2 x 100 = 200
Groceries 12 x 14 = 168
Jewelry 1 x 110 = 110

 

Important: We are not recommending the Jewelry figures above … they are however typical of what we see when making these sorts of comparisons. As you can see, it is the combination of both stockturn and markup that is important. Groceries have by far the best stockturn and Jewelry has the best markup but overall, Clothing has the best GROI with $200 of gross profit from every $100 invested in inventory.

 

Here’s how GROI works within a Jewelry store.

 

Category Stockturn x Markup % = GROI
Diamond Rings 0.5 x 90 = 45
Gold Chain 0.7 x 145 = 105
Watches 1.4 x 70 = 97
Silver Jewelry 1.1 x 150 = 165

 

Important: Again, these are not recommended figures nor are we suggesting you throw out your Diamond Rings and replace them with Silver because we also need to consider your Return on Effort (ROE) … more on that later.

So in real terms, your GROI is the only way to genuinely compare the performance of one category with another. We often hear retailers complaining about markup and threatening to drop a product line that in reality has a better GROI than other products with a higher markup.

So how does this help you calculate the OIL for an individual category?

Well, following our example of ‘GAP’ Sales of $1,062,265, let’s say 10% of your sales are currently coming from Diamond Rings and you want this to increase to 12% this year. 12% of $1,062,265 equals $127,472 of Diamond Ring sales.

Let’s also say that you intend to increase your markup on Diamond Rings to 100% and achieve a stockturn of 0.8 (meaning on average you expect them to take 15 months to sell). The OIL calculation would look like this. (Please note we can quickly, easily and affordably help you setup a Sales and Inventory Plan if required.)

Optimum Inventory All Categories Diamond Rings
Sales Budget (based on 12% of total) $1,062,265 $127,472
Budgeted Markup % 112% 100%
Budgeted Gross Profit (GP) $561,195 $63,736
Budgeted Cost of Sales (COS) (Sales less GP) $501,070 $63,736
Budgeted Stockturn 1.2 0.8
Budgeted Inventory (COS ÷ by Stockturn) $417,600 $79,670
Current Inventory $591,050 $68,545

 

So as you can see, in this example you would have $11,125 to invest in Diamond Rings … but alas there is a little more to it than that because you are already arguably over stocked by $173,450 overall.

Action Steps:

  1. Decide what your business is going to look like in the next 12 months. For example, decide which categories you are going to build and which ones you are going to reduce (if any).
  2. Take each Category and determine what GROI you expect (remember this is a combination of your markup and stockturn in each category)
  3. Using these figures, calculate your Optimum Inventory Level (OIL) in each Category. Important: Do one at a time and start with the Categories that can make the greatest amount of difference in the shortest amount of time.
  4. If you are already over stocked in a Category, decide whether you will increase your sales budget to match your inventory or reduce your inventory.
  5. If you are under stocked in a Category, look at other Categories that may be over stocked and work out how you can redeploy the investment where it’s needed.
  6. Before rushing out and buying blindly, think carefully about the price points and margin you want to achieve, the image you want to create and the vendors you want to partner.

This concludes our 4-part series on knowing what you need to have in place, to retire successfully and with ease. Please reach out if you would like more personalized advice on your retirement plans.

The Value Of Effective Team Meetings

By Becka Johnson Kibby, Edge Retail Academy

Omaha, NE–Meetings are a common practice in almost all businesses. That said, it is interesting that many retail jewelers do not hold them on a regular basis—or at all. Meetings are a powerful business weapon. Not only can they help you overcome any struggles individually or as a company, but to keep a team cohesive and working together fluently, they are essential!

Let’s take a look at the key elements of running effective team meetings so you can move into your busy season with some useful tips to help grow your business through meetings.

As you read this article, think of your business. Gain ideas as to how you can change the way you currently run your meetings, to create team meetings that everyone looks forward to.

Why Have a Team Meeting? A team meeting is all about engaging your team. It is important to talk about general business – where you are at (previous day, week, MTD, YTD) and where your targets are. Operational details (attention to detail!) are also imperative, as you want your business to run the smoothest and most efficient as possible. Training is essential, as everyone on your team (whether they are new or a long-standing employee) can learn and feel refreshed after training.

Engage Your Team. A little non-business at first is always nice, but make sure you keep that to a minimum and maximize the time you have with your team, to enrich them and energize them for the coming day, week and month ahead.

When you share information about your business, it makes everyone feel a part of the company and empowered to help make a difference. Motivate them! Inform them! Focus them! Team meetings are a great time to share victories. Praise the team members that deserve a “job well done”. Showing appreciation is important and makes others want to strive for greatness.

At times, a team building exercise or activity can be fun and can present unity within the team.

General Business. Sharing company results month to date and year to date, against your budget or plan let’s everyone know where you are…and where you are headed in the coming weeks and months. This can include anything from sales volume, to average sale, discounting, repairs, customers that walked (didn’t buy), etc.

Operational Details. Meetings are a good time to discuss as a team, any issues that have come up recently or frequently. It is also important to note, that this discussion should be focused on solutions and not excuses! Possibly hold a rule that staff members can only report a problem if they come with a possible solution or ideas for change.

Another area that can be missed with the full team is an update on any marketing that is taking place. Share all current and planned marketing so everyone on the team is informed and knows the initiatives and upcoming events.

Training. If you want your team to be at their best, then training is an essential part of each team meeting. This time of year, a training on “back to the basics” can be good to ensure everyone remembers the key elements of your sales process and concepts.

Some training ideas:

  • Build out topics for a series to be presented, and built upon each week.
  • Product – Ensure the entire team can speak about each and every collection your carry and know the history, how it is made, something fun about the designer, features and benefits of each, etc… Maybe even select one staff member each week to present a line/collection/brand.
  • Show a sales training webinar and discuss it as a team.
  • Role-play is mandatory. Period.
  • Assign training topics to individual team members to present and facilitate. Each team member is strong in certain areas, so have them speak about the concepts they perform the best. This allows them each to research, prepare and be a part of enriching the team.

Guidelines for an Effective Team Meeting. Consistent meetings are important for growth. Have an agenda – always! (and circulate to the team before the meeting). Enlist a team leader for each meeting – and for each topic. Create a time-line for each topic to ensure you get through all you need to get through in your given meeting time. Start on time and don’t wait for tardy members. Ask for feedback every couple of months (how are the meetings going and what people would like to see changed?). Have a suggestion box for topics to discuss at upcoming meetings. Ensure each team member is responsible for reporting on some topic during the meeting (if possible and appropriate). Summarize important tasks to be accomplished. Document tasks that will be accomplished going forward, then ensure they are being accomplished (Assign person and give deadline). Remind everyone of the next meeting date and time.

But the most important…plan regular meetings and be prepared!

Becka Johnson Kibby’s 25+ years of experience in retail fine jewelry sales and training demonstrate her passion for jewelry and an understanding of today’s competitive marketplace. Her career path includes both training and management positions for Q Report, Robbins Brothers The Engagement Ring Store and Borsheims. Becka is a Graduate Gemologist (GIA), worked as an instructor with the Gemological Institute of America and is a past member on the Program Advisory Committee for GIA. She is also the VP of Chapter Affairs for the International Women’s Jewelry Association (WJA).

In addition, Becka has been an independent jewelry educator and consultant, offering specialized training in the areas of selling skills, jewelry product knowledge, communication, and retail management. She has conducted seminars and training programs for retail jewelers and various jewelry industry events and shows across the United States and Internationally. Becka is committed to using her expertise to help jewelers and sales associates build their selling skills and grow their business. Contact her at (714) 925-2456; becka@edgeretailacademy.com