Jewelry Store KPIs: The Numbers That Run the Store

Revenue explains the least

Most jewelers can tell you what they sold last month. Far fewer can tell you which part of the floor paid for itself. Revenue is the number everybody watches, and the one that explains the least.

If you track nothing else, start with five

If you track nothing else, start with five numbers: GMROI, what each dollar tied up in inventory earns, and aged inventory, how much of the floor has stopped moving, sell-through by category and vendor, and the average ticket, the cheapest lever you have on revenue, and the repeat purchase rate: whether you're building a business, or renting customers.

The inventory numbers

Inventory is where a jewelry store's money lives, so that's where the important numbers are. Inventory turn is cost of goods sold divided by average inventory. Compare it to last year, and each category to the others. GMROI is gross margin divided by average inventory cost. Above 1.00, a line is contributing; below it, it's consuming. Sell-through is the honest reading on a buy: of what you brought in, how much actually left. And aged inventory, in age buckets, shows how much capital sits where new goods should be.

The trap margin percentage hides

GMROI catches the trap that margin percentage hides. A line at 60 percent margin that sits in the case for three years earns less than a line at 35 percent that turns four times a year. A margin report crowns the first one. GMROI shows the truth. Run it by category and vendor.

The sales-floor numbers

On the sales floor: the average ticket, tracked by associate, because the spread is a training plan, and units per transaction, which shows how the ticket grew. The close rate tells a quiet week from a week when nobody asked for the sale, and sales per associate is fairest per hour scheduled.

Customer and operations numbers

Then the customer and operations numbers: the repeat purchase rate over two or three years, and repair-to-sale conversion: if repair customers never buy, the problem isn't traffic, wish list and quote conversion, and repair turnaround, with the share delivered by the promised date, plus layaway liability and default rate, and memo aging, in both directions.

How often to look

Don't look at everything at the same frequency. Sales and the average ticket daily; sell-through, repair promises and open layaways weekly; aged inventory, close rate and memo aging monthly; and GMROI, turn and the repeat rate every quarter or year.

Two numbers are better than twenty

And two numbers are better than twenty. Pick two you'll change this quarter, put them where everyone sees them, and write down what you expect before the period starts.

The numbers in WJewel

In WJewel, the numbers come straight from your point of sale, with built-in analytics such as best sellers and forecasting, sales and profit reports, and inventory reports, all filtered any way you want.

Contact us

You'll find the full guide on the WJewel blog. WJewel is fully web-based, and runs on PCs, Macs, tablets and phones. To learn more, visit www.wjewel.com, or call us at (646) 578-8300.