“The Final Cut”
Monday, 12 January 2004
Now as we “Shake” Off” all that was the last century, we should be looking at the future with “Modern Eyes”. What we have done in the past wasn’t wrong…far from it and we all can congratulate ourselves for still growing in business, but we must look at business with a fresh approach.
Over the course of the year I will present a number of “New Look” ideas.
Is My Diamond inventory Organized to Sell?
When we approach our earring or chain inventory, isn’t there a master plan involving what we want to carry and where the “holes” are? I’m sure the answer is yes. If you carry pearl strands don’t you have certain “key” lengths and ”mm’s “ stocked. Now…what is the status of you diamond stock? Some will say they gave a “Good/Better/Best” system, but I believe most stores are missing the key element and that is… PRICE POINT!
When you or your wife stops at the gas pump are you buying technical “data” of octane or “price”? When we purchase airline ticket are we more concerned if the plane is a Boeing are or Airbus (do we even know or care) or we buying by price and schedule?
What if we had the following conversation? Please read the questions and imagine the typical responses you might give give.
- If you had no 1ct round diamond inventory and started to build, would you like to have a diamond to sell for $2500pct? Yes
- What would the next step up be? $3000
- And next up? $3500
- Don’t think about a certified diamond that you can get on memo, but your stock, Would you like one more step up. Yes $4200
- Is $2500 the lowest diamond you would like, or do you need a promotional place to start. Yes, probably $1800-$2000, but I probably won’t sell it too often.
- What % do you want to mark up your “stock” of 1 cts? Hard question, but I guess I need to work on 60% on the cheaper ones and 40% on the top 2
- Good so you need diamonds that have the following costs and selling prices.
Cost of diamond Selling Price
- How many of the diamonds you already own match to your list? Good, you are starting to build an inventory based on logic! If you believe the list makes sense, then as you sell a diamond and have “fresh” money, fill in the “holes” in your Price Point Matrix. Now when a customer comes in, you will know exactly what you have and how the diamonds relate to each.
Think what this would mean to you if you built an inventory in this manner and think how you would use your inventory in a sales presentation.