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Education
Maximize Your Profits
At the retail level, "quality" is a buzzword used so
frequently that it has lost significant meaning. Customers have heard
the old "quality, selection, price" triad so many times they are immune
to it. So if saying it doesn't work anymore, what does? Showing it.
When a person holds quality jewelry in their hand, the weight and
integrity can be felt. Whether it is conscious or not, consumers respond
to higher quality with more confident buying. That translates directly
into greater return on investment and lower amounts of unsold or
returned stock.
Informal surveys with jewelry store managers revealed that nearly
50% of their low quality jewelry was returned or remained unsold, while only 5% of their higher quality
jewelry was returned or remained unsold. This can be further illustrated as "quality verses quantity."
Two wholesale buyers begin with equal amounts of money ($54.00),
but because lower quality jewelry costs less, the retailer begins with six
more pieces of low quality jewelry than high quality jewelry. The
immediate assumption is that more money can be made if there is more merchandise to sell; however, only about 50% of the low quality jewelry will sell. Conversely, nearly
95% of the higher quality jewelry will sell, leaving only about 5% of the stock unsold.
After fifteen weeks of re-stocking strictly with sales earnings, the
$54.00 originally invested in high-quality jewelry netted $634.00 and
only accumulated $72.00 worth of unsold stock. Meanwhile, the low-
quality jewelry only netted $24.00 and actually accumulated $228.00
worth of unsold stock. The most detrimental effect of sacrificing
quality for quantity is the accumulation of unsold and returned stock. In
the cases surveyed, consumers readily paid a few extra dollars for
quality.
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