By Don Greig, Director, Focus Business Management Institute

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

Having an effective buying program is one of the keystones to retail jewelry store profits. Remember that each month ends a previous 12 month trading cycle and begins a brand new one. How well you strategy your acquiring for the next 12 months will influence your success.

SUPPLIERS We’re all familiar with the Pareto principle: 80% of the effects come from 20% of the causes. The exact same holds accurate for your companies. Your top 8-10 suppliers ought to be producing 80% of your sales. For that reason, if you would like to boost your annual sales by 30%, you are going to need to improve the sales of your top suppliers by the very same quantity. What supplier wouldn’t want a 30% annual improvement in sales? Let them fully understand precisely what your plans are and precisely what you might want from them to be able to make it occur (e.g. quicker delivery service time, greater terms, extra aggressive balancing).

Additionally, you must be updating those suppliers that may not be presenting you what you will need – even if they’ve been a tried and accurate provider for many years. We have found that as market cycles alter, so do the corporate models and customer service levels of the wholesale suppliers. You must make the changes to your organization which will assist you to succeed now. Go out and discover vendors who’ve attractive merchandise in a selling price point (over $1000 average retail sale) which will help you move to a higher level. You also have to have to find a few extra diamond vendors who have the good quality, cut, and price you need to pay. You’ll discover these suppliers at the Luxury Show, the JCK show, the Continental Buying Group, Centurion, plus the IJO show.

SPENDING “You’ve got to spend money to make money.” This is true, but it is how you spend your dollars which is the important element to success. Retail jewelers examine their monthly spending and tend to think, “Wow. I don’t desire to spend that a lot this month on stock for the reason that I have this and that to pay” and then they don’t stock their store correctly. Bear in mind, a retail jewelry store doing $1 million in annual sales will invest at least $500,000 on products over the next 12 months. When 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 buy for the year, an average of $40,000 per month. This is quickly 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), and so on. This is really a lot of funds and how wisely you spend it’ll entirely control your prosperity.

BUYING Spending isn’t buying. Spending is having income leave your bank account. Acquiring is the process of knowing what you need and then spending the cash necessary to get it. When you go to the tradeshows these figures really should be foremost in your mind. You are not travelling to the shows to peruse; you are planning to go to the shows to buy quite stunning diamond semi-mounts, diamond pendants, bracelets and earrings 1 piece at a time. You must also know what cost points of what item you’ll want to sufficiently stock your store and have the wholesale price already calculated to ensure that you are able to make certain a goal of 130% average markup.

Diamonds and color need to yield 80% of your sales, with the diamond departments making up 62% of revenues as well as the color departments comprising the remaining 18%. The rest of your store will account for the remaining 20% of your organizatio, but your focus requirements to be on how you acquire the items in this 80% group. It’s best to be seeking to obtain gorgeous pieces that fall into the $3,750, $6,500, $15,000, and $25,000 retail price ranges.

When attending the trade shows, make sure to stop by the Chinese along with the Indian pavilions to see the new exciting trends which are coming into the United States. Visiting these sections also gives you a broader worldwide perspective of what is going on in the jewelry business today.

What is your expected open to buy? The table down below shows how much it’s best to be seeking to correctly spend at the industry events, along with the amount of old inventory which you really should try really hard to stock balance (or exchange) with your vendors.

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A solid acquiring strategy is vital to the success of your retail jewelry store. Bear in mind: What you do obtain at these shows is dictating what you will sell, and how nicely you might profit, within the next twelve months.

Focus BMI will 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 the IJO show in July.

We welcome you to drop by and see our booth for a custom acquiring analysis strategy.

Focus Business Management Institute is considered the industry leader when it comes to retail jewellery organization advisory services. By means of a custom-made statistics platform that’s been enhanced over the last 30 years, the staff at Focus BMI can offer just about anyone with a clear writeup on the products you actually require in the business as well as at exactly what price points, for you to supercharge your prosperity.