Hooray for April! The beginning of the second quarter snapped a three-month decline in sales at independent jewelry stores, with same-store sales surging 22 percent on-year to an average of $103,418. If this keeps up, 2014 sales could come in 12 percent ahead of last year’s total. Overall, it was a strong set of numbers with average sale, units sold, and total profit dollars all showing a nice improvement. The only black spot was margin, which shrank to 44 percent from 48 percent in April 2013. Had margin been maintained at the 2013 level, the jewelers in our survey group would on average have banked an extra $3,840 at the end of the month. Obviously there is some correlation between lower margins and higher sales but for the most part, preserving margins is often about being creative, and strong. Here are a few things you can do to protect your profitability:
- Ask enough for the item in the first place. Make sure you give yourself some cushion to fend off discount-hungry consumers.
- Leverage your stars. If an item is a good seller, ask more for it.
- Don’t forget the cents. I know a store that made an extra $6,000 in net profit during the year simply by adding $0.95 onto the price of everything under $200.
- Try saying no. Around 50 percent of people will accept it. As for those who push, try offering an alternative slow-selling item or negotiate some terms to offset some of the cost of discounting.
For the full story and more ideas to improve your store’s performance, visit instr.us/7142