Jewelry Business Insight

Now's the time to plan on getting rid of those dogs in the case without "discounting".

Now's the time to plan on getting rid of those dogs in the case without "discounting".

You've heard "shoot while the ducks are flying". The month with the most traffic for your store is of course Christmas/December. This is the time to get rid of the dogs in the case. I've written a lot about old inventory in our business and "old" is anything over a year but a "dog" is easily anything over 18 months. So let's get rid of 18 month old dogs this holiday.

Take an array of "dogs" from the cases and place them in one case by themselves. Name the case "Saying goodbye to our old friends" case. Or as I've also seen labeled "Extreme Value" case. Don't place bridal in this case. It doesn't move as a greatly discounted item. That's another story. This special case of course should be discounted 24-60% depending upon its age.

But here's the real sweet spot. Plan your advertising for the holiday and especially in store signage to promote this idea: "Buy anything in the store for $500 and over and pick another gift absolutely free in our Extreme Value case".

You do have to set some dollar limits on it. A good idea would be to let them choose an item for free in the Extreme value case that is "tagged" at 50% of the price they are buying.

If they are buying a gift for their wife and its $1000 you should always be adding on. "Have you bought anything yet for your daughter/mother/niece/secretary?"

Start the add-on conversation. Then taken them to the Extreme Value case. "You have chosen this beautiful $1000 item. Now you can choose anything in our extreme value case for free. It can be anything up to $500 on the tag, which is half of what you're spending now."

Think how this works:
1. You get the regular price on the $1000 item. If you discount some to make a sale I'm not worried. 
2. You are giving away a $500 item but your cost is probably 1/2 of retail so your cost is $250. 
3. Considering the $250 cost item is 25% of the $1000 selling item it's a 25% discount. But the customer sees they are getting a $500 item for free and you can talk up the positives that it's like getting the whole she-bang at a 50% discount. 
4. Rather than discounting the $1000 item by 25% and only collecting $750 you actually get to keep $1000. 
5. In using the Extreme Value case as "bait" to help make a bigger sale you're getting ridof dogs that just possibly no one would buy on its own but do buy as an "additional" freegift. (Hey, it didn't sell in 18 month, it has a 75% chance of being here another 24months). 
6. Sell the free one at zero dollars in your point of sale system.

This is something the staff needs to be suggesting now to every customer. They won'tread signs, save your emails, it's a selling job. You should be elated that you've moved old merchandise and received full retail on the initial sale! Want to make this stick? Givethe sales staff $25 every time they make a sale using this technique. Don't worry aboutthe cost of $25; it's cheaper than anything else you've done to generate $1000 in sales.Yes I'd give the money even if the sale was $250, $500 or more. This is the time togenerate sales, cash flow and making customers happy. After all, they received 2 itemsfor the price of one.

Now go make your Extreme Value case.

David Geller, JewelerProfit | November 6th, 2012
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