There are FOUR retailer problems in the jewelry business as I have
seen it.
- TOO MUCH INVENTORY: You hear me preach it, you see me post it and
you read it in the articles I write for various magazines. Even
stores making money have too much inventory. Hey, how about 1 million
dollars too much inventory? Saw that recently. This is something that
can take 18 months to get under control. Takes a lot of hard work but
a LOT of dedication to the task. Paying sales people BIG spiffs to
move it, take it apart purely for the melee for repairs and slowly
using the rest of the ring.
If you ORDER melee, you have to pay for it and you therefore get to
keep only half of what you charged the customer. Take it out of a
waterfall ring that’s 3 years old and you get to keep 100% of the
money and don’t have to pay a bill for it.
-
SHOP PROFITS TOO LOW: Well hey; do I need to go further? Raise
your prices, less than 5% of customers will leave the store and your
money will go into your pocket. The solution is my price book:
www.jewelerprofit.com. OR just raise your prices! -
SALES PEOPLE DON’T CLOSE ENOUGH CUSTOMERS: All I hear across the
USA are these three statistics:
Out of 10 people who come into the store, a typical store will sell:
2 out of 10 will agree to buy a piece of jewelry. 7-8 out of ten will
agree to leave something to be custom designed. 9 out of 10 will
agree to leave a repair.
That’s a 10-20% closing ratio from the showcase. If you sell 2 out
of 10 and could get a better closing ration, you’d make money. If you
got ONLY 3 out of 10 to buy, the “3rd” person would increase PRODUCT
SALES BY 50%. For that solution go to: www.thefriedmangroup.com. I
have their sales book I can send you “No Thanks, I’m just looking”.
($29.95) At their site you could order their selling video tapes.
It’s the book only with live people.
NOT ENOUGH CUSTOMER TRAFFIC: This area is wide open and everyone is
searching for the “holly grail”. Advertising people say they know and
they usually don’t. They are just there to sell. Yellow page people
are the worst. I visited one store that spent over $80,000 on yellow
pages, FULL PAGE AD! They told me lots of people came in from the ad
and this was over 80% of their budget.
I found out later that the yellow page ad brought in mostly shop
sales, lots of custom work. This was crazy! Shop sales were only 20%
of total sales. Why spend nearly 80% of advertising on a medium that
only brings in 20% of sales. I told them to reduce their yellow pages
next year by MORE than 60%!
I recently visited a store with Steve Conn, the Marketing Maniac at
www.postcardmania.com (sign up for his free Tuesday marketing
newsletter.) I learned a lot while with him for three days. This
store had Shopkeeper, so he told me what to do and I made it work.
In Shopkeeper there’s a place to ask this question:
“Tell me who bought gold chains for over $500.00 in the last 12
months.” After you get the answer, Steve says to send these people a
letter stating:
“Hey customer, you bought a gold chain last year, a nice one. We got
in special some really cool bracelets that might look great with it.
Give us a call.”
Shopkeeper can do that and it can save the list to an Excel file so
you can use Microsoft Word to mail-merge the file and print the
letters yourself.
Or just contact your customer list every MONTH and sales will
increase a lot. He even suggested getting emails on repairs and
E-MAIL them when the repair is ready. Steve told me to not go fancy.
There are too many computers that won’t show graphics well. E-mails
should look like a post, text! Capitals and such, but text. Like his
is.
Send postcards, newsletter, etc. Going to a buying trip? Print up
postcards to your customers. Place a stamp on them and mail them
FROM THE CITY you’re in. Your customers will love getting a postcard
from Vegas or N.Y. from you.
I spoke to one guy who through in the towel in January 2000 for ALL
advertising. He started January 2001 sending all 5000 customers a
monthly postcard about SOMETHING!
2001 had September 11th in it. His sales were up 35%.
So see what you can do to address these four key issues. After you
have a handle on it then we dive into:
“How to make a store run without you.”
Good night.
David Geller