Back to Home

Leo Hamel Fine Jewelers Policy Letter

  • 05 March 2003
Rev1
  • Revised 07 August 2006

Inventory Basics

All Employees
  1. How do you tell if a diamond dealer is lying? (If his lips are moving!)
  2. Our profit is determined on the buy, not the sell.
  3. If we bought everything for even 1% less that would give us $65,000 per year extra.
  4. The stable datum on pricing is “what’s the most a retail customer will pay for this specific item.”
  5. On items that are not selling ask, “How can we make this piece more saleable?”, not “We need to lower the price.” Then make it more saleable NOW!
  6. On display ask, “How can the piece be made to appear more attractive for someone to buy?”
  7. A good relationship with the vendors is better than money.
  8. The best indicator of a good relationship with a vendor is, “They are happy with us even when we don’t buy!”
  9. Never tell vendors we don’t have the money. You can say we are over stocked and need to reduce in some areas before we buy more or his product isn’t moving as it should and perhaps they can help us with that.
  10. Get the merchandise in the case as fast as possible. The quicker it is in the case the more times per year we can sell it and the quicker you will have more money to spend.
  11. The urge is to take the easy way in buying and selling. The driving factor should be to maximize profit.
  12. Buy for as little as possible and sell for as much as possible.
  13. The relation between inventory turn and profit margin should be known cold and applied daily.
  14. Inventory always has money to buy new pieces. Sometimes the money is tied up in old inventory. The effective inventory manager figures ways to move this old inventory continuously.
Leo Hamel, Founder