Ramble On Ron - Latest Comments

Re: Dealing in Recycled Diamonds

diamondboy — Wed, 11 Apr 2012 10:14:27 -0000

but what about clarity of such diamonds? are this the same as in lab diamonds?

Re: Message To Retailers: Buy Diamonds For Stock!

diamondboy — Tue, 28 Feb 2012 08:22:33 -0000

The points above Ok when we talk about mounted gems but when business comes to standalone gemstone the system described above is not working correct. The first thing when some body purchase the diamond is to find something special. Every person has own thinking about what kind of diamonds they are need. Some times the people don know what they are looking for. And this thing is turn off all stock system.

Re: Message To Retailers: Buy Diamonds For Stock!

umesh. g.chavan — Wed, 01 Feb 2012 04:52:31 -0000

Diamonds, Gold, & other metals are appreciating assets.. Inventory management coupled with designs specifically targeted to sell the goods is very much essential. The cost of the funds used to buy the diamonds has to be taken into consideration. The biggest advantage with inventory is your reaction time is very little with respect to manufacturing jewellery thereby the customer can be assured quality at a competitive price. Throughput Turnover time improves.

Re: Message To Retailers: Buy Diamonds For Stock!

Ron Samuelson — Tue, 31 Jan 2012 18:38:45 -0000

Thanks David for your comment. I agree with you - my point was that if jewelers were to stock diamonds, chances are they can get their money back if they haven't sold the stone in a year. There are VERY few jewelry lines where this is true...

Re: Message To Retailers: Buy Diamonds For Stock!

David Geller — Mon, 30 Jan 2012 15:05:44 -0000

Making better margins are always a good thing. But jewelers typically don't have money problems because they don't make good margins. "Typically". The real reason for having money problems is having too much old inventory.
If you buy a diamond for $1000 and sell it for $1500, fine.

But if you can buy it for $800 and sell it for $1500, even better, right?

But not if every time you sell a $1500 diamond you buy TWO MORE. No matter if you bought the original $1500 diamond for a buck, you'd still wouldn't have enough money in the $1500 to pay for two $800 diamonds as they cost $1600.
The more margin/money you make the better off you are but you can make money and go bankrupt.

So how much inventory should you have?

Look at TOTAL sales (without memo's) of PROUCT for 2011. Exclude buying/selling gold and repairs and memo.
Look at TWO numbers.

Gross profits from product sales
and
cost of goods for those sales

(cost of goods for 2011 is NOT what you PAID for stuff, it's the cost of what you sold. BIG difference).

So lets say you sold in jewelry in 2011 $1,000,000 in sales and your profit margin was 48%. Therefore your two numbers would be:

Gross Profit (48%) = $480,000
Cost of Goods = $520,000

The correct amount of inventory to have is either $480,000 or $520,000 or any number in-between.

Inventory levels should really be no higher than your gross profit dollars. In this example $480,000.

If you had this inventory level you'd have less debt and more money in the bank and fresher inventory.

Here's a secret. Add up inventory over 1 year old in your store. Multiply it by 80% (multiply by ".80"). Now look at your total debt:

Accounts payablesCredit Card DebtLines of CreditBank LoansMoney owed to owners.

Add it up and typically 80% of the value of aged inventory is equal to your stores total debt.

Get rid of aged inventory and
1. You'll have the right amount as stated way above.2. You'll have much less debt.3. Because you have much less debt you'll have the ability to buy newer stuff and your store will have fresher merchandise.
Going back to the right amount of inventory from above:

Gross Profit (48%) = $480,000
Cost of Goods = $520,000

If you keep the Gross Profit number ($480,000) as I suggested you'll have a little lower inventory selection level and MORE money in the bank.

If you keep the Cost of Goods number ($452,000) as I suggested you'll have a little higher inventory selection level and LESS money in the bank.

Your choice but both are good choices. This is how GMROI is figured (Gross Margin Return On Investment).

So make good margins but if you want to know how many jewelry stores are doing well in this economy is because how well they handle inventory. If you'll do this you'll also increase your TURN, the amount of times product moves in and out of your store each year.

So make your margin but don't lose sight of inventory levels.

And yes my fellow jewelers diamonds way over a year old is dated merchandise. Just because it’s a diamond doesn't mean squat. If a $1000 cost item would sell for $1600 and its 2 years old, does it matter if its earrings, a jade ring or a diamond? No as when it sells it only generates money. There's nothing special about diamond money versus earring money. If it takes over a year to generate money, it’s a sad thing.

David Geller
Director of Profit

Re: If You’re Gonna RIP Someone, Make Sure They’re Dead!

Jmgimbel — Tue, 24 Jan 2012 17:00:48 -0000

I really can't stand those people the most. To many, FB or Twitter et al, seem a public forum to hear themselves talk and feel important. So if u disagree with a conspiracy theorist, re the twin towers, fir example, you were not invited to that conversation and can just blank off...!???

So it's not a conversation, simply a contest to see how much ass kissing that person is going to receive!!!
Joy M G

Re: If You’re Gonna RIP Someone, Make Sure They’re Dead!

Ron Samuelson — Tue, 24 Jan 2012 14:08:59 -0000

Thanks Jennifer for reading - glad you enjoyed!!

Re: If You’re Gonna RIP Someone, Make Sure They’re Dead!

jheebner — Tue, 24 Jan 2012 14:05:08 -0000

You are hysterical, Ron! I love this!!! Thanks for making me laugh today ... :)

Re: Diamond Market Update: 2011, Q3

diamond prices — Sat, 08 Oct 2011 04:56:05 -0000

Thanks for sharing awesome information with us.

Re: JCK Las Vegas 2011 – Diamonds Are King!

buy gold — Thu, 07 Jul 2011 00:26:43 -0000

Hi,this is a great article.The information in this article is very informative and very helpful.I like this post so much.Its a great efforts.Very grateful to you for sharing this article with us.Keep sharing wit us.

Re: JCK Las Vegas 2011 – Diamonds Are King!

Jewel Track — Wed, 22 Jun 2011 10:53:56 -0000

The Indian diamond dealers are paying big money for stones and buying up as much as they can, often for extremely high prices. they will hold it for some day or may years , as the diamonds demand increases they sell for more and earn more profit than any other investment .

Re: My First Dead Show – RFK Stadium 7/12/1990

Pdevinerdi — Mon, 20 Jun 2011 21:09:49 -0000

My first dead show also.

Re: Facebook Page Creator Can Now Be Removed

Sossa — Sun, 13 Mar 2011 07:50:11 -0000

but as i creator of the page and the company manager can my employee remove my from the page . i cant imagine that?????????

Re: Treating Your Customers With Dignity and Respect

Ron Samuelson — Wed, 09 Feb 2011 09:56:55 -0000

pleasure, see you soon!

Re: Treating Your Customers With Dignity and Respect

Dan — Tue, 08 Feb 2011 19:13:22 -0000

Great post, Ron. Thanks for speaking at our business group last night.

Re: When Will The Big Jewelry Companies WAKE UP?

John Moseley — Wed, 02 Feb 2011 23:10:40 -0000

Mobile is definitely a big factor for the future in jewelry sales!

Re: Silver…The New Gold!

Jacoby Eyal — Fri, 14 Jan 2011 08:20:49 -0000

As long as the US prints new $$ notes & the
economy will not improve every thing will be bullish.

Re: Silver…The New Gold!

Peter — Thu, 13 Jan 2011 18:53:44 -0000

There is a shortage of actual silver on the market. We had to wait a couple of weeks recently to get delivery for our production.
Silver is used in lots of high tech items. Most of that silver is not being recylced. It is lost from the total supply.
I don't expect the price of silver to go down very much. The main cause of price variance is because of speculators.

Re: Silver…The New Gold!

Ron — Thu, 13 Jan 2011 10:44:52 -0000

Thanks for the comment David. I agree that we'll be seeing more jewelry manufactured in 2011 as gold continues to rise. We're seeing a lot of coins and flatware over the counter these days...

Re: Silver…The New Gold!

Davidgalpert — Thu, 13 Jan 2011 10:27:38 -0000

Silver is the 'hot' metal and from what I've been reading the demand for the metal will increase due to it's heavy demand in manuf as well as it's resurgence in jewelry.

Re: When Will The Big Jewelry Companies WAKE UP?

Ron Samuelson — Mon, 13 Dec 2010 07:50:44 -0000

Hi Adam, Thanks so much for your comment. I see you've copied BN's diamond search on your website so perhaps you can do the same with their app. I looked up GIA one carat E VS1's and VVS1's on your site and compared them to BN's - yours are anywhere from $2-$4,000 more. Are you selling a lot of them online only? I will say that Jared has done a fantastic job with their stores. I wish I saw more GIA's in store from Jared than IGI deep stones, (I buy a lot of them from customers) but you know where your profit is. My only question is why would your rep answer that way? Anyway, as head of investor relations, I'm sure you're doing a great job. After all, you have the biggest in the world and I am just a little guy calling it like I see it. I would also love to see you all with a facebook page, as Rob noted. Best of luck and thanks again for your comment and for reading my blog!

Re: When Will The Big Jewelry Companies WAKE UP?

Adam — Mon, 13 Dec 2010 04:03:01 -0000

Ron: you've clearly not bothered to actually look at the Jared website...they have many of the tools that BN have - and more. I guess their conservative culture stops them crowing about their achievements. Given their same store sales performance, I wouldn't be so quick to condemn them...

Re: When Will The Big Jewelry Companies WAKE UP?

Ron Samuelson — Sun, 12 Dec 2010 13:13:18 -0000

Zales earnings have been going down for quite a while now, and I personally have no idea what their brand is. Don't expect anything wonderful from them IMO...

Re: When Will The Big Jewelry Companies WAKE UP?

MSchechter — Sun, 12 Dec 2010 12:52:38 -0000

I doubt it is the headache, it is far more likely that they do not have a strategy or at team to make it meaningful and just decided that staying away is better than doing it wrong. Something tells me both companies will move into mobile and social, but that they won't just throw up a page. They are very intentional about their brand and I assume they will be very intentional about the way they handle these two essential online aspects.

Re: When Will The Big Jewelry Companies WAKE UP?

Ron Samuelson — Sat, 11 Dec 2010 12:39:36 -0000

Hi Rob - thanks for the comment. I think that they just haven't put the time into social media yet, that's all. If you have any contacts over there, send them my way - I can help them! :-)