Inventory Turn: A Key to Profitability

Jewelers of America will soon conduct its annual Cost of Doing Business survey – which, starting this year, will be combined with National Jeweler’s America’s Best Jewelers survey -- but you can still gain valuable insight by looking back at last year’s numbers.

In anticipation of the new survey, we’ll be reviewing some of the key data points that help you run your business better. For instance, last year’s survey indicated that the most profitable jewelers turn their inventory 1.2 times per year, versus low profit jewelers who only turn inventory once. If your numbers are closer to low profits, brainstorm with your team on ways to improve your inventory turn – our survey shows even a slight improvement could improve your bottom line.

Tips for improving inventory turn in your store:

• Create display cases near the point of sale featuring inventory you’ve had at least three months or more, at impulse price points (based on your clientele).
  Have a “Classics” party to promote classic styles, which tend to move more quickly during challenging economic times. One idea is to hitch your promotion to the World Gold Council’s May is Gold Month campaign.
• Make it Fun: Depending on your target audience, you could choose a musical theme from the 1950’s onward, play only those classic songs and pair with hors d’oeuvres from the era.
• Commit to evaluating inventory control programs available to jewelers – or hire a retail consultant to help you improve inventory turn. It’s a cost that will pay you back in higher profits.

Take The Tip:

• Take Part in the 2009 Cost of Doing Business Survey, to find out how you can improve your store performance, in key areas like inventory turn. Visit www.jewelrysurvey09.com to complete the survey by May 15th and you’ll receive an immediate calculation of your financial ratios and a copy of the renowned benchmarking tool The Cost of Doing Business Report – both invaluable to analyzing your business performance.
• Click here to read “10 Best Practices for Selecting Retail Management Software”, an article in JCK magazine that provides an overview for evaluating inventory control software.
  

Comments

[Retail Management]

What would you say is the No. 1 cause of bankruptcy in most businesses today? It's not lack of sales. It's not overpaid executives. And it's not overstaffed operations. It is mismanaged assets. In inventory based companies, what is the No. 1 asset? That's right - inventory. Many times the paperwork affecting the value of this asset flies around the office like a whirlwind blew through the office window with some of the paperwork landing where it should, some landing close and some never landing at all.