Continued from Part 1 How Not To Go Broke In Your New Jewelry Business. We'll continue examining an important component of a new jewelry business and how to figure your "open to buy".
Now you need to look at your inventory on hand and purchases to come up with your "Open to Buy". So we'll come up with new figures and say that you have $1000 in inventory at the end of the month. You sell $400 at your cost of jewelry that month and you purchase $300 of new beautiful wholesale silver jewelry also that month.
Let's calculate that: beginning inventory $1000 minus $400 of sales at cost plus $300 of new wholesale silver jewelry. Your "open to buy" is $900. I am taking into account wholesale costs. Some companies do this based on their retail prices and take markdowns into account. I found this formula easy to use and follow.
Keep your running list on an excel worksheet or in a notebook. I'll be glad to send you an excel worksheet to with formulas. All you have to do is plug in your figures. Please email me and I'll get it right out to you.
This explanation is a very simple way of looking at this. You may have to take other things into account, such as seasonal trends or upcoming sales you are planning. But this will help your silver jewelry business or costume jewelry or any jewelry business solvent. Please post any questions or comments. In the meantime, please visit my website www.JoJewelry.com to see an amazing assortment of discount costume jewelry and discount silver jewelry at fabulous prices.
