Liquidity vs. Liquidation

Many jewelers think negatively of sales. They believe it hurts their image, tarnishes customer relationships, and casts a dark shadow over their business…

Many jewelers think negatively of sales. They believe it hurts their image, tarnishes customer relationships, and casts a dark shadow over their business.

REALLY? When you shop 5th Avenue in New York or Rodeo Drive in Beverly Hills and see a brand like Coach, Burberrys, or Chanel holding a sale, do you think negatively of them? Or do you realize these lauded brands have merchandise they want to dispose of where you and others can take advantage of their need to move product. You know the answer.

There is a big difference between liquidation and liquidity. No one likes liquidation, but everyone loves liquidity. Unfortunately, you can’t have liquidity without some form of liquidation. So instead of dreading the reduction of excess and aged merchandise that is choking you, realize it is simply a result of SMART business.

Which raises yet another question. What is the correct amount of inventory you should be carrying for the amount of business you do on an annual basis? My experience tells me that 95% of fine jewelers carry more merchandise than is necessary to do their regular volume of business. And it doesn’t even matter if we’re talking about a $2 million dollar store or one doing $10 million annually. Most stores carry far too much inventory.

If liquidity is what you need, especially as business slows down as we’ve seen in recent months, give us a call so we can help. Our support for your best interest is unconditional.  We look forward to hearing from you.


Sincerely,

Jeff Gordon, CEO