LustreMag.com |

When it comes to buying and merchandising high-end jewelry and brands, no consultant knows as much as the top independent jewelers. They learned how to buy the hard way—by putting their money and reputation on the line, again and again, to push their businesses to the next level.

To bring you that hard-earned advice on how the best stores buy, we employed sophisticated tactics. We asked them. And so they would feel comfortable sharing what they really think, we agreed not to quote them by name. They told us how and where they buy, what their plans are for next year, what’s really hot, and gave us some key metrics for judging success. They also let us know, in detail, what vendors do that drives them crazy. What follows is an opinionated, unscientific guide to the best practices of some of the nation’s best retail jewelers.

BY THE NUMBERS

Let’s begin at the bottom line. To judge whether or not you are maximizing the potential of your merchandising strategy, you have to run the numbers. The best stores tell us they watch these numbers closely. Most could rattle them off when asked without referring to their inventory systems (and, yes, they use those systems to their maximum capacity and many are looking for better software, with more capabilities).

Here’s a broad-stroke quantitative snapshot of the luxury jewelry retailer. First of all, most jewelers report that sales this year are up, from 6 to 18 percent. The average sale in the stores we talked to was between $500 and $1,300, although one store had a single location with a $5,000 average sale. Sales per square foot were, for the most part clustered between $2,000 and $3,000.

The average markup as a whole, for all categories, is still around 100 percent, with higher mark-up on bridge items balanced out by a smaller markup on diamonds. Mark-downs vary much more, from 5 percent to 25 percent. The average was 18 percent. Gross margin was pretty consistent, ranging from 40 to 45 percent. The average was 43 percent.