By Don Greig, Director, Focus Business Management Institute

“Failing to plan is planning to fail”. – Unknown

Having an powerful procuring program is among the keystones to retail jewellery store success. Remember that every month ends a previous 12 month trading cycle and begins a brand new one. How well you strategy your buying for the next 12 months will influence your success.

SUPPLIERS We’re all acquainted with the Pareto principle: 80% of the effects come from 20% of the causes. The identical holds true for your providers. Your top 8-10 suppliers really should be producing 80% of your sales. Thus, if you would like to enhance your annual sales by 30%, you might need to boost the sales of your top suppliers by the same quantity. What supplier wouldn’t want a 30% annual boost in sales? Let them know just what your ideas are and what exactly you’ll need to have from them to be able to make it occur (e.g. faster distribution time, far better terms, additional aggressive balancing).

Additionally, you must be updating those suppliers that aren’t giving you what you need – even if they’ve been a tried and true provider for lots of years. We have discovered that as business cycles alter, so do the enterprise models and customer service levels of the wholesale suppliers. You need to make the modifications to your organization that may allow you to succeed now. Go out and come across vendors who have wonderful merchandise in a price tag point (over $1000 average retail sale) that will allow you to move to the next level. You also want to come across several much more diamond vendors who’ve the quality, cut, and cost you want to pay. You will obtain these suppliers at the Luxury Show, the JCK show, the Continental Purchasing Group, Centurion, and the IJO show.

SPENDING “You’ve got to spend money to make money.” This is true, but it is how you invest your money that is the critical element to success. Retail jewelers take a look at their monthly spending and tend to believe, “Wow. I don’t would like to spend that much this month on stock due to the fact I have this and that to pay” and then they don’t stock their store effectively. Remember, a retail jewelry store doing $1 million in annual sales will invest a minimum of $500,000 on product over the next 12 months. In the event you don’t spend dollars on the stock, you won’t have it within the store, and you can’t sell it.

This $500,000 is your open to purchase for the year, an average of $40,000 per month. This is effortlessly extrapolated; a $2 million store will spend $1 million ($80,000 per month); a $3 million store will invest $1.5 million, ($125,000 per month), etc. This can be a lot of money and how wisely you spend it’s going to entirely control your prosperity.

BUYING Spending just isn’t buying. Spending is having dollars leave your bank account. Acquiring is the procedure of realizing what you will need and then spending the cash required to get it. Once you go to the tradeshows these figures need to be foremost in your mind. You might be not signing up for the shows to look; you might be travelling to the shows to buy very beautiful diamond semi-mounts, diamond pendants, bracelets and earrings 1 piece at a time. You need to also know what price points of what item you must properly stock your store and have the wholesale cost already calculated to ensure that it is possible to make certain a goal of 130% standard markup.

Diamonds and color ought to yield 80% of your sales, with the diamond sections comprising 62% of revenues and the color departments comprising the remaining 18%. The rest of your store will account for the remaining 20% of your business, but your focus needs to be on how you purchase the items in this 80% group. It’s best to be seeking to acquire gorgeous pieces that fall into the $3,750, $6,500, $15,000, and $25,000 retail cost ranges.

When attending the trade shows, be sure to stop by the Chinese plus the Indian pavilions to see the new exciting trends that are coming into the United States. Visiting these sections also gives you a broader worldwide perspective of what’s going on in the jewelry industry these days.

What is your expected open to buy? The diagram below shows how much you need to be seeking to prudently spend at the trade events, together with the quantity of old inventory that you must try really hard to stock balance (or exchange) together with your vendors.

A solid buying program is crucial to the success of your retail jewelry store. Remember: What you do obtain at these shows is dictating what you will sell, and how well you may profit, in the next calendar year.

Focus BMI are going to be attending the following trade shows in 2011, and attends most of the main trade shows inside the US on a yearly basis. Please be sure to come visit us at IJO 2011 in Nashville.

We welcome you to visit our booth for a custom purchasing analysis strategy.

Focus Business Management Institute is considered the nationwide expert when it comes to retail jewelry company consultation plans. By means of a proprietary statistics software package which has been mastered over the last 30 years, the staff at Focus BMI will give virtually anyone with an exact article on the stock you have to have in the store as well as precisely what cost points, to help you increase your profits.