Do you think of yourself as a retailer who likes jewelry or as a businessperson who sells jewelry? If you answered the former, then you’re in line with the 54.1% of Jewelers of America members who identified themselves this way in the 2008 Jewelers of America Cost of Doing Business Report. Just 12% called themselves business people.
While the survey doesn’t delve into how a retailer’s self-proclaimed identity relates to (or hinders) their success, Ken Gassman of the Jewelry Industry Research Institute notes that too many jewelers are in the jewelry business, but not in the business of selling jewelry. In today’s challenging environment, a retailer has to operate their business on a professional level to succeed.
Gassman provides the following tips to help you think like a business person and sell more jewelry your store:
Think Profits, Not sales: Too many jewelers think that sales are the key measure of success. As the JA Cost of Doing Business Survey showed, high-profit jewelers often had lower sales per store, but their profits were well above average.
Focus on margins: Too many jewelers think that cost cutting is the route to profits. While every penny in costs must be justified, jewelers should review their price-based promotions and discount policy. Offering automatic discounts and screaming 50% off cheapens this luxury product. Reduce price-based promotions and your margins will automatically rise, yielding higher profits.
Focus on target marketing: Your best customers are your current customers. It costs much more to get a new customer into your store than to get an existing customer to stop in and make a purchase. Existing customers are already loyal, leverage that loyalty.
Create a "little black book": Keep meticulous customer records. When a couple comes in to buy an engagement ring, make a note of their wedding date. Ask for the dates of their birthdays. Then, put this information into a database. Two weeks prior to each of these key dates, you should pick up the phone and remind those loyal customers that you "have just the perfect gift" for their loved one.
Analyze your financials: Too many jewelers simply toss their annual profit-and-loss statement into a pile to read one day. Go and find your P&L statement now. Read over the numbers; try to understand your business. Compare your figures to the JA Cost of Doing Business Survey averages. If you are below average, figure out why.
Take The Tip:
Take Part in the 2009 Cost of Doing Business Survey, to start improving your store performance, in key areas like those mentioned above. 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.
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