Change is coming...like it or not

So the jewelry industry is going through some tough times. That's what I've been hearing; that's what I've been reading; and, yes, that's what I've been experiencing too. The common questions to the retailer have been things like, "How's your business? You doing OK? What are you doing to weather this and how long do you think it will last?"


The questions to vendors are, "Are you selling anything? Is anyone buying? Do you think anyone will show up in Vegas? How much longer before people start buying again?"


You know the questions and probably know there are very few real answers. Our industry has been poised for a serious correction for some time now. Years, really. The business model under which we have operated for about a century has run its course. No longer can vendors continue to spend hundreds of thousands of dollars on product development and advertising to entice jewelers to buy from them. The reason? Jewelers aren't buying. Or more accurately, they can't. And shouldn't. At least not the way they have been in the past.


A fundamental problem with our industry's model of business is most vendors have treated the jeweler as the end user, relying on the jeweler to continue to make significant and regular stock purchases in order to keep their revenues growing. This isn't to say the retail jeweler is blameless in this flawed formula. On the contrary, the jeweler is an active participant constantly searching for the next best and soon-to-be-hot jewelry trends to set them apart in their market and attract customers. And they are often too willing to move away from existing vendors in favor of that greener grass.

So what happens? The jeweler adds yet another to the vendor list while adding to the store's inventory, hoping a good decision has been made; the product will sell; and the vendor will fulfill it's promises.


The vendor hopes so too, except hoping the jeweler will also be fulfilling promises. But through it all, the vendor constantly searches for more ways to get more product in the store---and keeps searching for yet another jeweler, knowing this or another business relationship won't last.


The jeweler rarely ends up selling everything purchased for inventory and the cycle is repeated year after year, vendor after vendor, causing an overstock of the wrong stuff. And this causes a problem when economic times are tough like they are now because the jeweler is not making enough sales over the counter to justify adding new inventory---even if it is from a vendor who has had success through the store.


So what can be done to break the cycle of co-dependency which has been created over so many years? It needs to be broken completely, then fixed in a whole new way so both retailer and vendor can benefit in long term, meaningful, and mutually profitable partnerships. Not only can it happen, but it must and will.


Clearly we all need to become better, smarter, more efficient, and more effective at what we do in the jewelry industry. Where would you start?