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Gems Inventory Management 101 (+ 7 Best Practices)
gems inventory management

For jewelers, maintaining an organized and efficient inventory is the difference between thriving in business and facing substantial losses. Whether you're running a small boutique or a large chain of jewelry stores, understanding the fundamentals of gems inventory management is important to your success.


In this blog, we dive into the basics of inventory management tailored specifically for jewelers. We’ll also share seven best practices that help you optimize your inventory processes, ensuring that your stock is accurately tracked and secured against potential risks. 


Let's uncover the secrets to gems inventory management, so you can propel your jewelry business to new heights.


Gems Inventory Management 101

Inventory management is the systematic approach to sourcing, storing, and selling inventory — both raw materials and finished goods. 


In the context of jewelry stores, inventory management isn't just about keeping track of products; it's about managing assets that hold substantial financial value and significance for customers.


Meticulous tracking is essential given the high value and small size of jewelry items. Each piece, whether an individual diamond, ring, or a gold necklace, represents a significant investment. So, precise inventory management helps prevent loss, theft, and misplacement, ensuring that every item is accounted for at all times. 


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Effective inventory management also aids in maintaining the right stock levels, avoiding both overstock and stockouts, which directly impact sales and customer satisfaction.


Let’s look at four of the most commonly used models of gems inventory management

Just-in-Time Management (JIT)

JIT is an inventory strategy where materials and products are only ordered and received as they are needed in the production process. This minimizes inventory holding costs and reduces waste.


Why choose JIT for jewelry stores: Your jewelry store might opt for JIT to reduce the costs associated with holding large volumes of inventory. This approach is particularly useful for high-value items where excessive stock ties up significant capital.

Materials Requirement Planning (MRP)

MRP is a system used for planning the production, scheduling, and inventory control of materials. It focuses on ensuring that materials are available for production and products are available for delivery to customers


Why choose MRP for jewelry stores: You may choose MRP to ensure you have the necessary materials (like gemstones and metals) available for custom orders and repairs. This system helps with planning and scheduling, reducing the risk of stockouts that delay production.

Economic Order Quantity (EOQ)

EOQ is a formula used to determine the optimal order quantity that minimizes the total inventory costs, including ordering and holding costs. The goal is to order the ideal amount of inventory that reduces costs and maximizes efficiency.


Why choose EOQ for jewelry stores: Your jewelry store might use EOQ to balance the ordering and holding costs of their inventory. This method helps in maintaining optimal inventory levels, ensuring that popular items are always in stock without overinvesting in inventory.

Days Sales of Inventory (DSI)

DSI measures the average number of days that a company takes to sell its inventory. It’s an indicator of how efficiently a company manages its inventory.


Why choose DSI for jewelry stores: You may choose to use DSI to monitor how quickly your inventory is turning over. This metric helps in understanding sales velocity and inventory efficiency, allowing jewelers to make informed decisions about stock replenishment and inventory management.


Choosing the Right Gems Inventory Management Model

You should select an inventory management model based on your specific needs and business goals. For instance, focusing on custom jewelry might benefit from MRP to ensure timely availability of materials, while a store with high turnover of popular items might find EOQ or DSI more beneficial for maintaining optimal stock levels. JIT could be ideal for minimizing holding costs, especially for high-value inventory.


By understanding and applying the right inventory management model, you improve operational efficiency, reduce costs, and enhance customer satisfaction.


7 Best Practices for Gems Inventory Management

Effective gems inventory management is the cornerstone of a successful jewelry business, ensuring that every precious piece is meticulously tracked and readily available. 


Let’s explore seven best practices that elevate your gems inventory management, from detailed item tracking to advanced reporting and analytics.

1. Detailed Item Tracking

In the jewelry business, the importance of detailed item tracking cannot be overstated. Unlike other retail products, each jewelry piece is unique, often carrying specific attributes such as type of gemstone, carat weight, metal type, design intricacies, and even sentimental value. 


Detailed item tracking involves cataloging and monitoring these individual pieces meticulously, which enables jewelers to maintain an accurate and up-to-date inventory.

Implementation Tip

To achieve effective detailed item tracking, investing in comprehensive inventory management software is essential. Look for software that supports the following features:


  • Unique identification: Identify each piece of jewelry with a unique SKU that distinguishes it from the rest of the inventory.
  • Descriptive attributes: Allow for detailed descriptions including type of gemstone, carat weight, metal type, and any other relevant characteristics.
  • Real-time updates: Update inventory status in real time as items are sold, returned, or moved.
  • Historical data: Maintain historical data on each piece, including purchase dates, sales history, and any repairs or custom modifications.


For instance, Jewel360, a specialized point of sale (POS) and inventory management system for jewelers, offers robust features that support detailed item tracking, ensuring that every piece in your inventory is meticulously documented and easily accessible.

2. Automated Reordering

Automated reordering works by using sales data and preset thresholds to trigger reorder actions. 


For example, once the inventory of a particular type of diamond ring drops below a specified level, the system automatically generates a purchase order to replenish stock. This prevents stockouts, which lead to lost sales, and helps manage cash flow by avoiding overstock situations.

Implementation Tip

To effectively implement automated reordering, selecting the right inventory management software is key. Here are some features to look for:


  • Min/max stock levels: Set minimum and maximum stock levels for each item. The system should automatically calculate when to reorder based on these levels.
  • Sales data integration: Integrate with your sales data to monitor inventory levels in real time and predict future needs based on past trends.
  • Vendor management: Manage vendor information and purchase orders to streamline the reordering process.
  • Customizable alerts: Receive alerts or notifications when reorders are triggered so that you can review and approve as needed.


Jewel360 offers advanced features such as min/max stock tracking, automated reorder calculations, and vendor management, making it an ideal choice for jewelers looking to streamline their inventory processes.

3. Integrated Receiving

Integrated receiving is a best practice that streamlines the process of adding newly received inventory into your system, ensuring accuracy and efficiency. 


For jewelers, managing incoming shipments can be a complex task due to the high value and small size of items. Integrating the receiving process with your inventory management system significantly reduces errors, improves data accuracy, and enhances overall operational efficiency.

Implementation Tip

To implement integrated receiving effectively, look for inventory management software that supports the following features:


  • Purchase order integration: Create and manage purchase orders within the system, ensuring that all orders are tracked from creation to fulfillment.
  • Automatic data entry: Update inventory levels automatically, reducing the need for manual entry and minimizing errors.
  • Multi-PO by vendor: Handle multiple purchase orders from a single vendor simultaneously, ensuring that large or staggered shipments are managed efficiently.
  • Discrepancy alerts: The system should flag any discrepancies between the ordered and received quantities, allowing for timely resolution.


Jewel360 is a perfect example of a solution that offers robust integrated receiving features, including multi-PO by vendor and detailed discrepancy reporting. This ensures that your inventory records are always accurate and up to date.

4. Value-Based Security Measures

Effective value-based security measures include enhanced audit trails, theft prevention mechanisms, and secure access controls. 

Implementation Tip

To implement robust value-based security measures, consider incorporating the following features into your inventory management system:


  • Detailed audit trails: Ensure that every transaction and interaction with inventory is logged, providing a comprehensive record to be reviewed in case of discrepancies.
  • Access control levels: Implement role-based access controls so that only authorized personnel handle high-value items or sensitive information.
  • Theft prevention mechanisms: Utilize both physical and digital security measures to protect your inventory. This includes secure display cases, safes, CCTV, and alarm systems.
  • Regular security audits: Conduct regular audits of your security protocols to identify and address potential vulnerabilities.


Jewel360 offers advanced security features tailored to jewelers, including detailed audit trails, and role-based access controls. This ensures that your high-value inventory is always protected.

5. Custom Orders and Repairs Management

For jewelers, custom orders and repairs management is an important part of providing exceptional customer service and maintaining connections with your customers. Both services require meticulous tracking, transparent communication, and efficient workflow management to ensure customer satisfaction and timely delivery.


Effective management of custom orders and repairs involves tracking the progress of each order or repair, managing associated costs, and keeping customers informed throughout the process. 

Implementation Tip

To manage custom orders and repairs effectively, incorporate the following features into your inventory management system:


  • Order tracking: Use a system that allows you to track the status of each custom order and repair from initiation to completion. This should include key milestones like design approval, production start, quality checks, and final delivery.
  • Cost management: Track all costs associated with custom orders and repairs, including materials, labor, and any additional charges. This ensures accurate billing and helps in maintaining profitability.
  • Customer communication: Implement tools that facilitate clear and timely communication with customers. This could include automated updates via email or SMS, as well as a customer portal where clients check the status of their orders.
  • Workflow management: Streamline the workflow by using a system that integrates all aspects of custom order and repair management, from initial consultation to final delivery. This ensures that every step is coordinated and nothing falls through the cracks.


Jewel360 offers comprehensive features for managing custom orders and repairs, including detailed order tracking, cost management tools, and customer communication modules. This helps jewelers provide a seamless and efficient service to their clients.

6. Advanced Reporting and Analytics

In the modern jewelry business, leveraging advanced reporting and analytics is essential for making informed decisions, identifying trends, and optimizing inventory management. Advanced reporting and analytics provide in-depth insights into sales patterns, inventory performance, and customer behaviors, which significantly enhances your business' efficiency and profitability.

Implementation Tip

To effectively implement advanced reporting and analytics, consider using inventory management software with the following features:


  • Comprehensive dashboards: Look for software that offers intuitive and customizable dashboards where you view key metrics at a glance.
  • Real-time data: Ensure the system provides real-time updates on sales and inventory levels, allowing for timely decision-making.
  • Detailed reports: Utilize software that generates detailed reports on various aspects such as sales by item, category, location, and customer demographics.
  • Trend analysis: Analyze historical data to identify trends and patterns that inform future business strategies.
  • Customizable reports: Choose a system that allows you to create custom reports tailored to your specific needs, focusing on the metrics that matter most to your business.


Jewel360 offers powerful analytics and reporting features, providing jewelers with the comprehensive data needed to make strategic business decisions. With tools to track daily on-hand quantities, cost values, and shrink inventory features, Jewel360 ensures that you have a clear and accurate picture of your inventory and sales patterns.


Related Read: How Do Jewelry Stores Get Their Inventory? 7 Insights

7. Training and Professional Development

Effective training and professional development reduces errors, improves efficiency, and enhances employee satisfaction. It ensures that your team is well-equipped to handle sophisticated inventory management tools, improving accuracy and operational efficiency. 


Plus, it helps to build a knowledgeable and confident workforce that can adapt to new challenges and technologies.

Implementation Tip

To implement effective training and professional development programs, consider the following strategies:


  • Regular training sessions: Schedule regular training sessions to keep staff updated on new features and best practices in inventory management systems. This could be monthly or quarterly, depending on the complexity of the system and the pace of technological advancements.
  • Role-specific training: Tailor training programs to the specific roles and responsibilities of your staff. For instance, sales staff might need more training on customer interactions and product knowledge, while inventory managers might need in-depth training on system functionalities and data analysis.
  • Hands-on practice: Provide hands-on practice opportunities where employees work with the inventory management system in a controlled environment. This helps in building familiarity and confidence in using the tools.
  • Professional development plans: Create individual professional development plans that align with both the business goals and the personal career aspirations of your employees. This could include attending industry conferences, enrolling in relevant courses, or earning certifications.
  • Feedback and assessment: Assess the effectiveness of your training programs through feedback and performance metrics. This helps in identifying areas for improvement and ensuring that the training meets the needs of your business and employees.


Jewel360 supports training and professional development by offering user-friendly interfaces and comprehensive support materials, making it easier for employees to learn and adapt to the system quickly. 

Mastering Gems Inventory Management for Success

Effective inventory management is the backbone of a successful business. 


Jewelers can ensure their operations run smoothly and efficiently by implementing:


  • Detailed item tracking
  • Automated reordering
  • Integrated receiving
  • Value-based security measures
  • Custom orders and repairs management
  • Advanced reporting and analytics
  • Continuous training and professional development


Embracing these strategies transforms the way you manage your gems inventory, allowing you to focus on what truly matters — delivering exceptional jewelry and unforgettable experiences to your customers.


Discover how Jewel360‘s comprehensive inventory management solution can help you streamline operations, secure your inventory, and boost your business performance.

Ready to take your gems inventory management to the next level? Schedule a demo today!