Independents

On Data: A 5-Point Reopening Checklist

IndependentsApr 28, 2020

On Data: A 5-Point Reopening Checklist

Jewelers need to re-evaluate their sales forecasts, their inventory and their employees, writes Sherry Smith in this special edition of On Data.

sherry-smith.jpg
Sherry Smith is director of business development for data and consulting company The Edge Retail Academy. She can be reached at sherry@edgeretailacademy.com.
States are beginning to develop and roll out reopening plans, with some states collaborating on a coordinated, regional approach.

The reopenings are happening sooner than we anticipated, but you still have time to complete your preparation and planning for the post-coronavirus world.

When the future is uncertain, creating multiple forecasts helps us prepare for different possibilities.

Planning and forecasting can play a major role in driving your success or failure, and nothing will bring you more peace of mind than reopening with a well-thought-out and detailed plan.

While there are many things you still feel you need or may want to do, the following items should be checked off your list prior to reopening.

1. Sales Projections
It will be incredibly difficult to predict what post-COVID-19 business will look like as none of us have been here before, but this doesn’t mean you shouldn’t complete your sales projections.

Although a sales projection is basically an educated guess, it does set the standard for your expenses, profits and growth.

You should aim to have three sales forecasts completed: a conservative, a moderate and an aggressive one, and you should absolutely factor in your data.

Your aggressive sales plan should be the remainder of your 2020 forecast from when you reopen. While this was created prior to the pandemic, this represents our aspirational goal of fully returning to pre-coronavirus business.

Your conservative and moderate sales plans should factor in the many potential variables you will be facing, such as fewer number of employees, your area’s potentially restricted schedules (days and/or hours, number of people allowed in the store, etc.), and a decreased marketing spend.

A hypothetical conservative sales plan might be 30 to 40 percent of your aggressive or original 2020 sales plan, and your moderate forecast might fall between 50 to 70 percent of your original sales plan for 2020.

2. Cash Flow Worksheet
One of the most important things you can do for your business right now is to create a financial budget.

Budgeting, in its simplest terms, is an outline of expectations for what a business wants to achieve for a particular period of time and, as we stated above, it represents your financial position, cash flow and goals.

While budgets generally forecast an entire year, yours should focus on the remainder of 2020.

Budgets afford you the luxury of tweaking as necessary and that’s precisely what you will need post-COVID-19.

Create three cash flow plans that tie directly to your conservative, moderate and aggressive sales plans. 
Factor in your fixed costs as well as your variable costs.

Your revenue is made up of two components: your cost of goods sold and your gross profit. In theory, your cost of goods sold would cover your vendor payables and your gross profit should cover your operating costs.

If your sales plans (based on your gross margin) do not cover your operating costs, then you will need to look at either cutting some of the variable costs at least in the interim, or increasing your revenues or, preferably, both.

3. Savings
Hopefully, you’re a retailer who already saves a percentage of her or his revenue, but if you’re not, you must make this part of your business model moving forward.

Open a separate business account and determine the percentage you will start saving. I highly recommend 5 percent, but if you truly believe you cannot do that, start with 2 percent or 3 percent and work your way up to 5 percent, gradually ramping up to 10 percent.

The key is to start, and now is the perfect time. There are many benefits to having a business savings account, including being prepared for emergencies, budgeting for periodic expenses, and saving for future business projects.

4. Inventory Management 
Currently, there is a lot of advice out there when it comes to inventory management after COVID-19.
 
Simply put, one size does not fit all. Having said that, never has it been more important for a retailer to follow best practices when it comes to managing her or his inventory.

Start with performing a vendor analysis as well as a category analysis prior to reopening. 

This exercise typically shows that approximately 80 percent of your gross profit dollars are coming from as few as 10 to 15 vendors.

You’ll get the highest return on your efforts by starting with your top-performing vendors and categories.

Based on your findings, you should plan on remerchandising your store, not only to give your store a fresh look, but also to better align your top performers with your prime real estate.

One of your goals should be to work toward your optimum inventory level. Retailers can’t afford to have their working capital tied up in their inventory. 

Imagine if you had that several hundred thousand dollars (or more) as cash in the bank going into this pandemic instead of having it tied up in non-performing product in your store. This crisis would be a lot less stressful for you. 

When it comes to inventory, there are four areas to focus on and plan around.
 
  1. Fast-sellers. Commit to replenishing your fast-sellers. This is the very product driving revenue and creating cash flow.
  2. Memo. If memo is currently a successful part of your business model, then do not just blindly send it all back. You could find yourself starving your top-performing categories and vendors. Instead, do an analysis. Make sure your memo doesn’t compete with your assets, and never have aged memo except for the pieces generating orders.
  3. Aged. Given that cash flow is king, have a plan of action in place to aggressively target your aged inventory. Plan a clearance sale for your non-performing product. Your goal should be to recoup as much of your investment as possible and as quickly as possible. You should have a list of strategies ready to go for both reopening and ongoing management of aged inventory.
  4. Have conversations with your vendors. Collaborate on a preliminary sales plan and inventory goal for the remainder of 2020 you both feel comfortable working toward under these current circumstances.

5. Talent Management 
Our people are our biggest asset as well as our biggest liability, and there is no better time to evaluate your team than right now. 

When you reopen, you cannot afford to reopen with anything less than a really strong team, and that means having the right people in the right roles. This applies to both front and back of house. 

RELATED CONTENT: What Will Retail Look Like After COVID-19?
 It is imperative you have salespeople with the correct wiring. These are the very performers who will give your business the best chance of fulfilling your customers’ needs and wants by closing the deal, thus driving revenue and creating cash flow.

If you have a sales team member who is dependable, reliable and has a great work ethic but simply cannot close a sale, consider shifting them to a different role, but only if it’s the right fit and is beneficial to your organization.

If you’ve done all these things and they’re still not a fit, you’re not doing your business or that employee any favors by keeping her or him.

Wrap-Up
To recap, while there are many things you could be working on, you should focus on completing this five-point checklist prior to reopening.

1. Create your sales plans.
2. Create your cash flow plans.
3. Open a business savings account.
4. Perform a vendor and category analysis and draft a remerchandising plan.
5. Evaluate and assess your team.

Do the work now. Tackle one item per day and you can complete your to-do list in as little as five business days.

Having your completed plan and contingency plans will help you reopen in the strongest position possible.

And, stay positive and continue to focus on the controllable.

I wholeheartedly admit I’m an optimist or, at the very least, a pragmatist. Therefore, I believe there are many people like myself—anxious to dine out, see a movie, frequent my favorite brick-and-mortar stores and, first and foremost, book an appointment at my local hair salon.

I leave you with this from quote from “Reengineering Retail” by Doug Stephens: “In a world where almost every aspect of our lives has been somehow digitized, experiences that engage our bodies, our senses and our souls are at a premium.” 
Sherry Smithis director of business development at Edge Retail Academy, the leading jewelry business consulting and data aggregation firm.

The Latest

agta-sb-0925.png
Supplier BulletinSep 18, 2025
Will Your Design Define 2026? Enter The Spectrum & Cutting Edge Awards

Sponsored by American Gem Trade Association

Stock image of a woman shopping online with credit card
SurveysSep 18, 2025
Deloitte Thinks the Holidays Will Be Merry, PwC Isn’t So Sure

In its holiday report, PwC said the season will be more like jazz—improvisational and less predictable—than an easy-to-follow melody.

Pandora distribution facility Maryland rendering
MajorsSep 18, 2025
Pandora to Open New Distribution Center in Maryland

The jewelry giant will relocate its existing facility to a larger space in Anne Arundel.

reDollar-fine-jewelry-department.jpg
Brought to you by
reDollar.com Is Rolling Out the Next Level Jewelry, Diamond & Watch Consignment Program

With their unmatched services and low fees, reDollar.com is challenging some big names in the online consignment world.

Garçon New York Campaign Imagery
CollectionsSep 18, 2025
Ashley Zhang Launches Garçon New York

The designer, who is the creative force behind her namesake brand, has now started a new mini line focusing on chains for fathers and sons.

Weekly QuizSep 12, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Swiss Gemmological Institute SSEF
SourcingSep 18, 2025
SSEF Opens Applications for 2 Gemology Education Scholarships

The awards include tuition for a course at the Swiss lab, economy flights, and hotel accommodation.

Hill & Co. AI Strategy Graphic
TechnologySep 18, 2025
Hill & Co. Launches AI Strategy Program

The 21-day program was designed to help jewelry retailers identify opportunities and eliminate inefficiencies with AI.

japac-btyb.png
Brought to you by
Rallying Call for the Jewelry Industry on Tariffs and Other Key Issues

Jewelers of America is leading the charge to protect the industry amidst rising economic threats.

Set of four Patek Philippe “Star Caliber 2000” pocket watches
AuctionsSep 17, 2025
Mythical Set of Patek Philippe Pocket Watches Expected to Sell for $10M+

A set of four Patek Philippe “Star Caliber 2000” pocket watches is part of Sotheby’s upcoming auction in Abu Dhabi.

Journey of a Jeweler by Silvia Furmanovich
TrendsSep 17, 2025
Silvia Furmanovich’s Book Tells the ‘Journey of a Jeweler’

The Brazilian jeweler’s latest book marks her namesake brand’s 25th anniversary and tells the tale of her worldwide collaborations.

1978 Rolex Submariner Ref. 1680 Tiffany Dial
WatchesSep 17, 2025
Bob’s Watches Acquires Vintage Rolex Won on ‘The Price is Right’

The Submariner Ref. 1680 with a Tiffany & Co. dial came from the original owner, who won it as a prize on the game show in the 1970s.

Jewelers Mutual Group logo
TechnologySep 17, 2025
Jewelers Mutual Launches Shipping Solution App for Shopify

The new integration allows users to manage shipments directly from the Shopify dashboard.

Shot of one of the pools at the Omni La Costa Resort & Spa in Carlsbad, California
EditorsSep 16, 2025
Out & About: 7 Great Quotes From Converge in Carlsbad

At Converge 2025, Editor-in-Chief Michelle Graff attended sessions on DEI, tariffs, security, and more. Here are her top takeaways.

Crime police cars
CrimeSep 16, 2025
2 Robbery Suspects Killed in California Pawn Shop Shootout

Six people were shot last week at an Oakland cash-for-gold shop as employees exchanged gunfire with individuals trying to rob the store.

Chopard Ice Cube Modular Necklace
CollectionsSep 16, 2025
Chopard Adds New Designs to Its ‘Ice Cube’ Capsule Collection

The jeweler has expanded its high jewelry offering, which launched last year, with new pieces featuring its cube motif that debuted in 1999.

Natural Diamond Council Retailer Accreditation Program seal
SourcingSep 16, 2025
Natural Diamond Council Launches Retailer Accreditation Program

Ben Bridge Jeweler and Lux Bond & Green were a part of the pilot program. 

Kristen Bell, Angela Bassett, Lisa Manobal
EditorsSep 15, 2025
Skipping the Necklace, Embracing Snakes: The Best Jewelry From the 2025 Emmy Awards

Associate Editor Natalie Francisco shares eight of her favorite jewelry looks from the 77th annual Primetime Emmy Awards, held Sunday night.

Holiday presents in gift boxes
SurveysSep 15, 2025
Resilient Shoppers to Boost Holiday Retail Sales, Says Deloitte

It’s predicting a rise in retail sales this holiday season despite economic uncertainty and elevated inflation.

Buffalo Emerald
SourcingSep 15, 2025
Gemfields Achieves $32M at High-Quality Emerald Auction

It included the sale of the 11,685-carat “Imboo” emerald that was recently discovered at Kagem.

8.33-carat emerald-cut no-oil Brazilian emerald, A. Kleiman & Co.
SourcingSep 15, 2025
AGTA Elects 8 Members to Board of Directors

The newly elected directors will officially take office in February 2026 and will be introduced at the organization’s membership meeting.

Rough montana sapphire
EditorsSep 12, 2025
Out & About: Mining Sapphires in Rock Creek, Montana

Associate Editor Lauren McLemore headed out West for a visit to Potentate Mining’s operation hosted by gemstone wholesaler Parlé Gems.

Arunashi Fordite and Rhodolite Earrings
TrendsSep 12, 2025
Piece of the Week: Arunashi’s Fordite and Rhodolite Earrings

Fordite is a man-made material created from the layers of dried enamel paint that dripped onto the floors of automotive factories.

Susan Jacques and Al Gilbertson
Events & AwardsSep 12, 2025
Al Gilbertson Wins 2025 Robert M. Shipley Award

Gilbertson has worked as a researcher, jeweler, lapidary artist, appraiser, and business owner throughout his decades in the industry.

Supreme Court stock image
Policies & IssuesSep 11, 2025
Supreme Court to Hear Tariffs Case in November

A decision likely won’t come until January 2026 at the earliest, and the tariffs remain in effect until then.

Tabayer’s Nordstrom Shop-in-Shop
MajorsSep 11, 2025
Tabayer Opens Nordstrom Shop-In-Shop

Located in the revamped jewelry hall at the retailer’s New York City flagship, this opening is Tabayer’s first shop-in-shop.

De Beers education app on mobile phone
SourcingSep 11, 2025
Need to Sell More Natural Diamonds? De Beers Has an App for That

The new, free app offers accessible educational content, like games and podcasts, for U.S. retailers.

Gold jewelry on a scale
MajorsSep 10, 2025
Stuller to Swap Gold Scrap for Full Credit to Account

As the gold price rises, the manufacturer is offering a 100 percent payout through Sept. 30 for gold clean scrap.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy