Whenever we talk to jewelers there are always two issues that are first and foremost in their minds and create the greatest anguish. The first is problem staff and how to hire the right people, and the second is what to do about aged inventory.
There are two major problems with aging inventory.
- First and foremost, it stops you from buying the stock that does sell.
- Second, it monopolizes resources that could be put to better use. After all you don’t need to clean it if you can sell it first!
You didn’t acquire this problem in one day and you can’t solve it in one day. The process of “Managing Your Aging Inventory” is a part of your ongoing responsibilities, just like buying inventory and making payroll. Be systematic about this. Put it in your schedule, and target a department each week – most important departments first, (the ones with the largest holding of old product).
Review each piece that has been in the store over 18 months (or certainly two Christmases). Get it out of the cases, put it in a tray or box, and determine piece by piece – “What went wrong?” (This is not about assigning blame; it is about learning to do a better job so we don’t keep making the same mistakes over and over). Decide what should be done to make the best possible recovery. Put at least as much effort into this process as you did into buying it in the first place. If 70% or more of your stock is old, you can’t justify ignoring this issue, it’s costing you money every day!
Of course the best cure is prevention, and avoiding buying badly in the first place is half the battle. One of the hardest things for any jewelry buyer is to reduce the temptation to buy on emotion. It’s easy to pick pieces at a show that we like – only to return to the store and discover you already have two other items like it; and they didn’t sell either!
Purchasing is a science more than an art – you still need the ability to apply a bit of entrepreneurial spirit, but narrowing things down and stacking the odds in your favor can strongly increase the chances of getting it right. Using existing information to reorder fast sellers is the most important step – but you can also access data of what sells elsewhere to help you select new product; and what product is better to buy than what is selling elsewhere?
Your options will generally fall into the broad categories below:
Sell it for full price!
1. Clean, Polish, Retag and Redisplay! Make sure the inventory and the display looks good enough that you would not hesitate to feature it in your advertising. Each item needs enough personal space to make it look important.
2. Make sure that the inventory is in good “Ready to Sell” condition. Ask yourself, “Would I accept this item from my vendor if it were in this condition when it arrived?” Are the stones tight… level… a good match for color, etc? Is it in proper condition for the customer to try on? If not, then get it fixed up and return it to the sales floor.
3. Un-clutter the showcases. The typical jewelry store showcase has twice as many items in it as it should. Look at the articles and ads in the trade magazines. Look at the photos in the articles about successful jewelry stores. Which ones are appealing? Visit successful stores – what are they doing that would work for you? Make your showcases look like SHOWCASES, not a refuge for unwanted inventory.
4. Leave half of your old product in the safe. Have this stock “Ready to Sell.” Arrange it in trays by category and price. Whenever a customer asks “Is this all you have?” tell them “No, I have some special items put back in the safe that not many people get to see. Would you like to have a look?” You’ll be amazed how well this works!
5. Train the Staff! Frequently we order a new line or assortment, and when it arrives we just shove it in the case and expect it to sell itself. (Not a very good strategy.) Enlist the vendor’s sales representative to help your staff learn how to make a proper, knowledgeable sales presentation. Have the best salesperson in each category assist with ongoing in-house staff training to build the selling skills of the other associates. If a lack of training is the reason for the poor performance of the stock you may be able to completely recover from this oversight or neglect.
6. Teach the staff to include a piece of aging inventory, whenever possible, in each sales presentation.
7. Exchange a given number of pieces or a specific dollar value with one or more cooperative fellow retailer(s) for 3 to 6 months. Keep good records and settle up on a prearranged schedule.
David Brown is President of the Edge Retail Academy, an organization devoted to the ongoing measurement and growth of jewelry store performance and profitability. For further information about the Academy’s management mentoring and industry benchmarking reports contact Carol Druan at email@example.com or call 877-569-8657.