Increase Your Profits in Three Easy Steps: Part 1 – Average Retail Sale
When we are talking to prospective clients, we are always asked the question, “What are some immediate things that I can do to make changes in my store?” We have three very simple things that you can do to make an immediate difference:
1. Increase your average retail sale
2. Increase your mark-up
3. Stop discounting
In this newsletter we will discuss your average retail sale and the dramatic impact that small changes in this area can have on your store (and we will address the other two items in the next two weeks).
The average retail store does 5000 transactions a year (not including bead sales).
Transactions Average Retail Annual Sales
5000 $200 $1 million
5000 $400 $2 million
5000 $600 $3 million
5000 $1000 $5 million
Of those 5000 transactions, 5% of them (250 transactions) bring in half of your sales, so be sure to focus heavily on your diamond and color sales, as these departments will make the biggest impact on your bottom line.
The easiest way to increase your average retail sale is to show your best piece of merchandise first. When someone comes into the store, don’t start with what you think they can afford (you typically underestimate this figure), because it is very difficult to start to sell up. Nobody is ever offended by being shown the best piece of jewelry you have in the store – and it’s always easier to start moving down the price scale than it is to move up.
Remember — if you increase your average retail sale by only $10, you will increase your total sales by $50,000 per year and if it drops by $10 you will lose $50,000 in sales.