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Case 2:
Jewelry Business – Securing Margins in High-Value Inventory
The Challenge
A well-established jewellery business approached us with concerns about tight cash flow and reduced profitability, despite strong sales and customer demand.
On the surface, everything looked healthy — steady turnover, loyal clientele, and good market reputation. However, the owner constantly struggled with liquidity and rising financial stress.
Through initial discussions, we discovered a common mindset among many business owners — the fear of running out of stock. To avoid customer disappointment or price fluctuations, the company was holding excess gold inventory as a “safety buffer.”
This decision, though well-intended, was silently damaging their bottom line.
Our Intervention:
Our team conducted a comprehensive Gap Analysis, including:
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Reviewing financial data and stock records
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Interviewing key team members and decision-makers
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Studying purchase patterns and market demand
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Analyzing working capital utilization and interest costs
Findings
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Total stock held: ~1.5 kg of gold | Gold price at the time: ₹11,100 per gram | Capital locked: ₹1.66 crore |Annual interest cost (@10%): ₹16–17 lakh
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This meant the business was losing nearly ₹16–17 lakh every year on idle inventory — an amount that added zero value to operations or profitability.
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We then introduced:
✅ Inventory optimization systems with defined reorder levels
✅ Data-driven purchase planning aligned with real sales velocity
✅ Periodic stock audits for visibility and control
✅ Training for purchase and finance teams to track working capital efficiency
The Result
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Within just three months of implementation:
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Idle inventory reduced by 30%
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Working capital cycle improved significantly
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The company unlocked liquidity worth ₹50 lakh+
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Annual interest burden reduced by ₹16–17 lakh
“This case clearly shows that hidden inefficiencies like excess inventory can silently drain profits — identifying them early through a Gap Analysis can turn loss into opportunity.”