08172017Thu
Last updateTue, 15 Aug 2017 9pm

Bob Epstein

Aging inventory - Tired store

Aging inventories can burden even the most prosperous store.  Merchandise that doesn’t sell must be insured. There are also storage costs, taxes and the fact that you have your working capital tied up in a resource that isn’t making money for you.  Since these costs continue to rise, tight inventory control is still one of the best investments you can make.


Successful retirement sale strategies

For many store owners, 2013 will be the year they decide to retire, close or sell their store. This decision is a very emotional one, especially for store owners whose business has been their life, often for a period of several decades. Many owners hold on to their properties and miss the optimum window of opportunity to turn their inventory and customer goodwill into what could be a nice retirement nest egg.

As they approach retirement age, many store owners let their inventory dwindle down to next to nothing. Understandably so, they’ve been reluctant to go out and spend money on new merchandise, so what they do have is old and unwanted. Customer traffic has slowed. The store just isn’t what is use to be.  The advice I give to store owners who are contemplating retirement is to go out at the top of your game. No doubt there’s plenty of emotion surrounding this decision, but there’s a critical point where you can reap the rewards of all the time you spent building your retail business.

Of course selling your store is an option, but the major difficulty with this strategy is the lack of qualified buyers. Many buyers do not have adequate financing and may want you to hold a note. The note may become useless if the jeweler does not run a successful operation, meaning you never get paid. Many buyers will only offer you a percent of your cost for the inventory, claiming that they would just as soon invest dollars in fresh inventory of their own choosing rather than in your dated stock. 

A professionally conducted retirement or store closing sale will often generate as much as 1.25 on the dollar for inventory and achieve close to your annual volume in as little as 8 to 10 weeks. With a retirement sale you have the opportunity to convert all that customer good will you’ve built up throughout the years into cash.

With a retirement sale you only get one shot at success. There are no do-overs. Once the sale is finished, it’s done. With this in mind it’s extremely important to maximize this once-in-a-lifetime business opportunity and to do some advance planning.

Running a retirement sale is a unique business proposition, different from any sale event you may have conducted previously. For example, you must take time to make sure you are in compliance with both state and county laws regarding store closing sale events. These statutes regulate such things as the maximum length of time an owner can run a store closing sale and the ability to bring in or augment inventory during the sale. County laws may be different from state laws but take precedence. Determining what the laws are and where and when to file is an essential first step and will determine the timing of your sale. 

Typically a third of annual jewelry sales are generated during the November-December holiday time frame and much of that volume is done 10 days prior to Christmas. Store closing sales do well no matter what time of year, but the holiday shopping season is best. Plan to start your retirement sale on or shortly after Black Friday in mid November and you will be able to run the sale through January - also a strong sales month as many shoppers look to spend work bonuses. Again, local and state laws determine the maximum time (usually 90 days) you can run the sale.

Making sure you have enough inventories in stock to last throughout the sale is critical. Many state and local laws prohibit the buying of additional inventory once the sale starts, so part of the planning process is a thorough inventory review. Your retirement sale will draw in many people who are not your normal customers. You should provide your customers with the opportunity to buy something for every occasion, every taste and every budget. You may stock up on merchandise you’ve never carried before. Make sure you have all price points covered and that you carry everything from unique gemstone jewelry, diamond jewelry, custom jewelry, necklaces, estate jewelry, earrings, pendants, pearls, bracelets and watches.

Advertising and marketing will play a critical role in the success of your retirement sale. You will want to reach out through direct mail and appeal directly to your loyal customer base offering private sale incentives to them as a reward for their patronage over the years. Having an updated mailing list is essential.

Beyond your loyal base of customers you’ve got to get the word out about your sale and the discount savings available to the general public. Every market is different. You must determine the most cost effective means of advertising in your particular market; perhaps a mix of space ads in local papers, and/or radio spots on morning or evening drive programs.  Appropriate signage in your store window and in-store sale signage is also vital. If you are in a mall, there may be restrictions as to what you can advertise in your store window.

Advertised savings and discounts will draw traffic into your store. Over the last decade the American buying public has been educated and has been accustomed to looking for deals - especially in the recent economy. Store closing or retirement sales are the best in terms of getting the public’s attention and moving significant amounts of merchandise. There is a precise art and science in progressive discount strategy during your retirement sale event. A store that has a history of continually discounting or running promotional sales will have a tough time running another significant sale event targeting price points even during a store closing sale.  It’s a matter of credibility with the buying public. By contrast a store that rarely runs a sale and is not known for discounting will have a far better chance of success in getting a customer’s attention. I strongly suggest that you not run any sort of promotional sale event six months or even a year prior to planning your final retirement sale.

There are many important details and lots of moving parts, but a well planned and professionally run retirement sale event can generate significant revenue, cash and profit. Remember, you only get one shot at this. Make sure your retirement sale is set up for success and enjoy your well earned retirement!


Bob Epstein is CEO of Silverman Consultants, LLC.  Offering a legacy in sales strategies for jewelers since 1945, Silverman Consultants provides guidance to store owners seeking to turn around a business, sell off unwanted inventory, or liquidate an entire store. With offices located in Charleston, SC, New York City and Saskatoon, Canada, the company helps jewelry store owners and chains formulate strategies designed to maximize revenue in times of transition, whether due to retirement, store closing, or simply when needing a boost in sales. For more information visit www.silvermanconsultants.com or call Bob direct at 800-347-1500.

 

The Price is Right

In this post-recession era, there is little doubt that the average consumer remains extremely price sensitive.  While it’s important to provide great customer service, have a store and staff that are warm and inviting, and maintain a inventory variety that is artful and distinctive, price matters. In fact it’s usually the key factor in a purchase decision.

Competing against Internet sales

Once upon a time, not so very long ago, young love-struck couples would visit their trusted jeweler looking for an engagement ring.  “Look how it sparkles. It’s beautiful,” she’d say with a giggle. “Yes, it certainly is,” he’d reply, thinking quietly about the balance in his checking account and if he had enough to make a down payment and what the monthly bill might be.

These days the conversation is often much different. “I’ve been on-line and I’ve been looking at 1 carat, Princess Cut, VS1, near colorless diamonds. In fact I’ve got an Excel spreadsheet with bids. Can you match these prices?”

Welcome to the world of bridal sales in 2013.

After 98 years and 3 generations in business, Floyd Silver recently closed his family owned store: Berger and Silver in Northeast Ohio. “The romance and excitement is gone from the business,” reflected Mr. Silver in a recent phone interview. “Diamonds have become a commodity. And how do I explain to a customer that there are phony certs out there? A little knowledge is a dangerous thing.”

We hear comments like these from store owners around the country as they try to re-invent themselves and adapt to the changing consumer landscape - especially with regard to bridal sales.  As the old saying goes - you can curse the dark or light a candle. Here are a few strategies to combat shrinking margins and on-line competition.

Probably the most important thing to do when the young man hands you his Excel spread sheet and asks you if you can match the  prices he’s found on-line is to SMILE and say, “YES WE CAN.” You’ve got to realize that if he were intent on finding the cheapest diamond, he’d still be sitting in front of his computer screen. But he’s not - he’s standing in front of you in your store.

Take advantage of the situation to make the point that while price is certainly important, comparing grading certificates on a computer screen is no substitute for seeing and comparing actual diamonds in person. Remind your customer that in spite of the “4-Cs” grading system, ultimately each diamond is unique. Diamonds of the same carat weight, quality and cut when viewed side by side have their own character and only one will capture her heart (this is your cue to turn your head in her direction, make eye contact, and smile). With this conversation you’ve set the stage to show a variety of loose diamonds from your inventory. You do have an inventory of loose diamonds don’t you?

These days store owners must become astute diamond buyers - not only from wholesale sources but from the general public as well. Many owners buy gold - some advertise their gold buying services more aggressively than others. If you buy gold, consider buying diamonds off the street. You’ll need cash to build your inventory, but ultimately you’ll be able to make much better margins on the re-sale of those diamonds. Plus, there’s nothing like showing off a table top full of diamonds to get a customer’s attention.

Having chosen just the right diamond you can then talk about settings. Maintaining a good inventory of different designs and metals from which to choose will help close the sale. There are consumers who are bargain shoppers, but you can offset the allure of deep discounts offered online with quality and again by making sure you have a wide selection of merchandise that covers all price points. Even better, have the capacity to design and custom manufacture a setting just for her. 

“Before the designer brand names came on the market everyone was a custom jeweler,” commented Floyd Silver. “A young woman wanted something unique - not what her girlfriend might be wearing.”

Like clothes and all other fashion items, jewelry items go in cycles. Lately we’ve noticed a resurgence in demand for one-of-a-kind piece heirloom-quality engagement rings over designer name brands. Take advantage of this market trend and consider repositioning yourself - especially with regard to bridal sales. Jewelry is a creative personal expression and a personal adornment. Art is not a commodity, there is intrinsic value in the design - beauty goes beyond the published price of gold and diamonds.  Jewelers are still artisans and craftsmen.

Finally, while online diamond dealers may be hard to compete with on price, they generally get low marks on service. Making a point to educate, pamper and pay attention to the wants and needs of each customer will help make the sale. Price matters, but so does service - before and after the sale. Things such as in-store financing, no-hassle returns and free ring cleaning, gift wrapping, repairs and shipping all make a difference. 

Create a warm and friendly atmosphere. Strive to create a different store look.  Be different. Be quirky. Have some personality. Ultimately, a store’s atmosphere is not determined by the choice of music or the attractiveness of your decor or displays. It is your attitude and that of your staff that establishes atmosphere.

Above all, make the buying experience a fun one. You can put the romance and excitement back into the buying experience.  In spite of - or in many cases these days because of - the Internet, people still do fall in love and get married. There’s really nothing romantic about sitting at home in front of a computer screen. When it comes to bridal sales, store owners really do have the sales advantage.

Bob Epstein is CEO of Silverman Consultants, LLC.  Offering a legacy in sales strategies for jewelers since 1945, Silverman Consultants provides guidance to store owners seeking to turn around a business, sell off unwanted inventory, or liquidate an entire store. With offices located in Charleston, SC; New York City; and Saskatoon, Canada; the company helps jewelry store owners and chains formulate strategies designed to maximize revenue in times of transition, whether due to retirement, store closing, or simply when needing a boost in sales. For more information, visit www.silvermanconsultants.com or call Bob direct at 800-347-1500.

 

Sale event success factors

So you’re thinking about running a sale event in your store. Maybe you want to move dated or slow moving inventory. Maybe you need to increase store traffic. You might even be thinking about retirement and closing your store. All good reasons for a sale. So, if you run a sale, how well will it do? What impact will it have on cash flow and your bottom line?

Planning for success

The new year is off and running. Have you taken the time for reflection, resolutions and goal setting? Losing weight. Planning a vacation. Taking up a new hobby.  What about your store? What are your goals and objectives for your business this year?  Now is a good time to sit back, reflect and gain clarity about where you’ve been, where you are now, and where you want to go.

Competing against the big chains this holiday season

The election is over - but just when people are starting to think it might be safe for them to turn on the television, there’s a whole new slew of ads bombarding viewers. Not politicians, but retailers, many of them the jewelry store chains competing for holiday shopping dollars. “Hurry in to one of our 1,000 stores and get this mass produced ring. Sparkling love placed in a tiny cushioned display box - now at huge savings up to 60%.”

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