Take two similar people and give them the exact same opportunity. One will succeed and the other will fail. Why?
Successful people do what unsuccessful people are unwilling to do.
Successful people have a desire to continuously improve themselves in life and in business. Their success is the result of small disciplines practiced every day. Unsuccessful people make small mistakes that are practiced every day.
Three important figures control your jewelry business:
1. the number of items sold
2. the average retail sale of those items
3. the mark-up you place on those items
The average jewelry store does about 5,000 transactions a year, including repairs. 5,000 transactions are plenty to maintain a very successful business. The best way to increase your revenue and profitability is to increase your average retail sale rather than the number of transactions. Consider the following chart:
Transactions Average sale Total sales Gross profit
5000 $100 $500,000 $250,000
5000 $200 $1 million $500,000
5000 $400 $2 million $1 million
5000 $600 $3 million $1.5 million
5000 $1000 $5 million $2.5 million
5000 $2000 $10 million $5 million
This chart illustrates how the average retail sale controls your business.
The average jewelry store is remarkably consistent in annual transactions, average retail sale, and mark-up. The reason? Jewelers tend to do the same thing over and over again, often expecting a different result. When we select a supplier, we tend to purchase the same price merchandise as our current average retail price because we cannot wander from our comfort zone. That’s what we’re accustomed to, so that’s how we think. And how we think is how we act.
In order to grow, we must begin to think differently so we can begin to act differently. We must change our philosophy and heed this call to action. We must decide to change in order to see improvement. Do you want your business to be more profitable? Are you willing to change?