BEEN A REAL roller coaster of a ride since 2016, wouldn’t you say? Things are so different now. Yes, inflation has hit everyone around the world, not just us. Gas and groceries are all costing more. But consumers are still buying, assuming the goods are there, and jewelry is no different.
INSTORE had a piece from its Big Survey last month showing jewelers’ profitability is now hinging on:
- Adding lab-grown diamonds
- Embracing online sales
- Hiring staff
- Concentrating more on custom design
- Charging more for repairs
- Upgrading equipment: lasers, 3D printers, microscopes
Dumping Aged Inventory
Notice the ones I listed in bold? I like to think just maybe I’ve had something to do with that, although any good jewelry consultant or buying group has been telling jewelers to get rid of old inventory (just like other retail industries do).
A few short years ago, a store owner could “possibly” get by running a store by the seat of his or her pants. I help stores with the shop and QuickBooks accounting, so I’ve seen lots of people with their pants on FIRE financially!
Numbers 4 though 6 are not as difficult as you’d think. Number 7 (dumping inventory) is harder because it’s hard to change a jeweler’s mindset. It’s a numbers game, but jewelers don’t think so. It’s the No. 1 reason for low cash and debt in a store. Always has been.
Advertisement
Number 3 is now a big problem for almost every company and store in America. There are three positions in a store, and all three are harder to fill:
1. Bench jewelers
Many talented bench people are baby boomers who are either retiring or just want to work less hours. They are tough to connect with. Newspaper in my day was the No. 1 way to attract employees. Not anymore. There’s no central location to find them.
Stores are unwilling to train bench people and at the same time pay a wage that is attractive to them while they learn. Like Rapaport pulled back the veil of secrecy of the cost of diamonds to the public, Facebook and other social media sites share what other bench jewelers are asking and getting for pay. Not uncommon to see “$50,000 to $80,000” as a salary. It’s simple. Bite the bullet and raise your shop prices and pay better. It still has a 90 percent closing rate.
2. Office and bookkeepers
In some stores, you might be able to get by with part-timers in this position. Need a bookkeeper? Google “Bookkeeping Staff Service” (a temp service for bookkeepers). After 90 days, most will let you buy them out and hire them as your own.
3. Sales staff
Probably the most valuable asset. Doesn’t matter if it’s a retail store or restaurant, everyone has a problem hiring. One big complaint is getting newer employees to show up for work as scheduled. I hear all the time, hiring new people-they might call in “I just don’t feel like working today”. One store told me they have MORE employees than before the pandemic because they need extra people to cover for those who don’t show up. Like stand by employees.
The way I see it, the pandemic has shown workers that if they want it, they can have:
A. A life
B. A job they like
C. Better pay
Advertisement
As a store owner, you are going to have to adapt. You’ll be expected to make A through C happen. More flexible hours, better pay, better training than before.
Their compensation package will have to be parts of base salary, commissions and/or percent of gross profit of what they sell. Not everything is about money. Help make our numbers this month? Great! Take an extra day off with pay or a weekend vacation.
Many stores I’ve talked with have given nice raises to the staff to keep them in their store, bigger year-end bonuses, quarterly bonuses. Yes, based upon performance, but if you have any dead wood working for you, replace them. Better for them and you. It’s not how hard is it if they leave, it’s what if the dead wood STAYS?
Pay a bonus to any employee who brings you a friend or acquaintance after the new employee stays at least six months.
Here’s betting 2023 will be great for your store!
