[Jewelry making - Article 00121] - Re: [Orchid] Inventory statistics?

[David Geller]

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Hi Neil

    Your question is the heart and sole of what I help jewelers do. It's
    best to have a program for jewelers that does this in a flash. The
    Edge is one (www.ajsllc.com) and the other one is Jewelry Shopkeeper
    (www.jewelryshopkeeper.com) 

    These reports are from jewelry shopkeeper. 

    What you want to find is your Gross Margin Return on Investment.
    This is your TOTAL sales from the cases with special orders from
    those vendors WITHOUT (taken them out of the mix) memo, repairs,
    custom design, etc. 

    Only sales of stuff you own. You find the gross profit for one year
    (go back 365 days). So you have this gross profit number for 365 days
    total. 

    Then you find your AVERAGE INVENTORY for the 365 day period. If you
    don't have these two programs, won't be easy. Easiest way is
    inventory level last November 1st added to inventory level this Oct
    31st (that's 1 year), added together and divided by "2". 

    Better would be inventory levels on the 1st of the month, add all 12
    together, get a big number, divide by 12 to get an AVERAGE. 

    Divide gross profit dollars by average inventory level. This should
    give you a number above $1.00. Above a dollar means you're making
    more money from inventory than you keep in stock, which is what
    people who make and have money in our business do. 

    I have setup for you a link to my website to download an Excel
    worksheet where I've done the work for you. 

    http://www.jewelerprofit.com/GMROI_Worksheet.html 

    The idea is to 1st find the GMROI for the whole store. 

    Then find the GMROI for each department. 

    Then look at each department by price point. 

    Even price points should have (more or less-can't be perfect) a
    GMROI above $1.00. 

    Orchid won't allow attachments otherwise I'd attach some screen
    shots. It you want some screen shots of the reports, email me at
    dgeller AT bellsouth.net 

David
David Geller
www.JewelerProfit.com
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