In our last article we discussed how to manage aged inventory while attempting to recover full price on the item. This month we look at strategies that involve selling it at a discounted price.
Selling an old item at a reduced price is always easier than trying to sell it for full retail, and most jewelers have options available to help clear that old product in this way. Today we’ll explore some of the trusted favorites, plus offer some alternatives that may help keep them moving.
1. Have a special discounted showcase for them. Give the case a name. My colleague, Lynn Baldwin, normally gets a smile by signposting his, “Say Goodbye to Our Old Friends”
2. Offer the discount to staff. A $500 reduction on a $3000 piece is nice for a customer, but, let’s face it, they don’t have to go far to find a similar offer. Offering the incentive to staff (in other words they keep whatever part of the discount they don’t give away) can be much more effective. $500 extra in the pay packet is pretty motivating for most employees. You can offer this to the individual who sells it or have it paid into a pool for all staff to share. You could offer a bonus incentive to the person who sells the most old items for the team. There are a number of variations to this that can be both rewarding and fun for the staff.
3. Hold a Sale with a difference. Rather than just offering a standard discounted sale, include an extra incentive. Have one day or one hour (if you can measure) of the sale that is a lucky day/hour where everyone who purchases that day/hour gets their money refunded. It may sound generous, but if you run it for a month and refund on one day then you are really only giving an extra 3% (1 day out of 30) in discount. Most people love the gamble. Alternatively, offer to refund everyone if a certain event occurs (e.g. hits 100 degrees or snows). Insurance can be gained for an event like this if you don’t want to take the risk yourself.
4. Consider an auction. Either in-store or with an auction house.
5. Put it on E-Bay.
6. Bargain with it. Use old inventory as negotiating pieces when the customer is seeking a deal on a new piece. It can be an extra gift rather than a cash discount.
7. Barter it. There are companies that will exchange product in return for trade dollars that you can use to buy other product.
8. Use it as giveaways. Old inventory can make ideal competition prizes for radio stations – you may be able to purchase air time in return for providing inventory that the station may use for their own competitions.
9. Bargain with service suppliers. How about your cleaning service or printer? Some may accept jewelry instead of cash payments. This may not work with an existing relationship so well, however if someone is seeking your business you may be able to request part payment in product. It doesn’t hurt to ask!
10. Exchange it. You need to be up front with the vendor and negotiate this when you purchase. It not only gives you greater strength when buying, but means you aren’t trying to change the terms once bought.
11. Remake it. Change it into a style that may sell better for you.
12. Melt it. Given the increase in the price of gold and silver, you may be able to recover your cost by melting it down and selling the raw material.
13. Be charitable. Give the item away to a charity auction or organization running a fund raiser. The goodwill can be worth it, and the feel good factor is pretty nice too!
So there you have it, 13 further ways to clear that old inventory. Some you may already use and others may be new to you, but all are worth exploring. After all you can never be short of alternatives for clearing aged inventory – no matter how hard you try you’ll never get rid of all of it!
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 firstname.lastname@example.org or phone, toll free, 877-569-8657.