Have you ever stopped to consider how much of your profit comes from Special Orders? It’s a certainty that they cost you more than selling something out of your cases. Taking time and resources to hunt down, order, inventory and follow-up on special orders can put strain on your already overtaxed resources.
No one would complain about taking time to find a three-carat natural blue diamond (a truly special order) or bring in a specific size wedding ring sold from the sample in your case. What we mean here is those items that are ordered from a catalog or magazine ad because your customers cannot find what they really want in your cases. Here are some things to think about with regard to minimizing effort and maximizing the value of special orders:
- Do you have a system for compiling information about sales of special orders? If not, get one.
- How does the average sale of special orders compare with the average of what you stock? This can indicate if you are aiming too high or too low with what you normally buy.
- Do they have a higher margin than your regular stock? They should. They certainly cost you more in overheads.
- Do you have something similar in your cases? This may indicate that your salespeople are not covering all the bases before jumping to the catalog.
- What patterns exist among the orders? For example, are you regularly special ordering white gold because you normally stock more yellow?
- How many of these items should be considered for normal stock?
Answering these questions and paying attention to special orders can help you be a better buyer. Not only did someone come in and pay double what you would for an item, they waited for it and risked being added to your mailing list to get it! So what’s so special about special orders? They all provide insight into what your customers want. Are you listening?