Last updateWed, 27 May 2020 11pm

David Brown

Three good reasons why diamonds need to be the backbone of your business

If a jeweler returned from the 1950s, would he recognize the retail landscape that jewelers have to deal with today? Probably not. The consumer of the 21st century is a different beast to what they would have encountered, and technological developments, the development of the shopping mall at the expense of the strip, and Internet selling have all changed the environment almost beyond recognition – some of these changes for better and others, it might be argued, for worse!

When did you last ask yourself what you really wanted from your store?

Caught up in the day to day business of trying to make a living, it is easy to forget the purpose behind doing what you do – or even whether you still have a purpose anymore. The bright eyed enthusiasm of youth may have even given way to a hint of cynicism about how things have worked out! Don’t despair - you’re not alone. Everyone goes through this from time to time. But if it has happened you need to get yourself back on track.

We don’t always do what’s best for us

My friend’s daughter has a loose baby tooth. The other tooth has been trying to get through for a while and is pushing at it from underneath. Now, it would be easy to get rid of it if she would just give the baby tooth a little bit of a wiggle each day, but she won’t do it. She is reluctant to put up with the feeling she doesn’t enjoy, and the slight pain of the baby tooth coming away.

The problem is if she doesn’t get it sorted soon she will be in for a trip to the dentist which, in the end, will be more pain (for her) and expense (for the parents). She knows this, but prefers the short term gratification of not having to deal with it over the long term consequences if she does nothing.

Your customers don’t think “Cost Plus” and neither should you

One of the most controllable yet neglected areas of jewelry retailing is mark up. Most new product coming into a store is priced on a standard mark up percentage. The assumption is made that the customer wouldn’t pay any more for it than this. Although a good starting point, it can often mean, at best, that profit isn’t maximized on individual items that have represented good buying. At worst it may mean that thousands of dollars of profit are given away if the percentages used are too low.

Do you need to buy that item right now?

You know the situation. A vendor has just called and advised they will be in the area tomorrow and would love to show you their new range. You’ve just opened the bank account details that morning and the picture looks pretty grim –you are getting closer to the overdraft limit and you’re due a visit to the bank next month. You know you can’t afford it, but that vendor’s inventory is nice product and you wanted to beef up your selection in that area as the aged inventory has built up and nothing seems to be selling. Buying new product is the obvious answer to trade your way out of trouble.

The importance of staff communication

This may seem an unusual topic – after all, telling staff what’s going on in the store should be a forgone conclusion. But sadly, it’s one of those things that so often gets forgotten about during the daily process. Often you forget who has been told what and with many stores running casual staff on different shifts, not everyone is on deck at the same time.

Setting your retail price – what’s cost got to do with it?

Most retailers depend on a cost plus mentality when it comes to setting their retail price on goods. This week David Brown investigates a more profitable alternative.

Apologies to Tina Turner for the paraphrasing on her ‘80s hit, but it is a relevant question when so many jewelers use cost as a factor in determining their retail prices.