Retailing is the most competitive and demanding business that anyone could get into, with the exception of professional sports. There are enough retail businesses for over 500 million people but there are only 260 million of us. With thousands of retail stores, the Internet, discounters, changing trends, more selections and hot items, you must move your inventory or you will lose the game…big time.
So with that in mind, the economy, the credit crunch, stockroom space and the need to pay the rent, you must move or turn the inventory quickly! It’s about markdowns, sales, discounts, gift w/purchase, give-a-ways, and contests; but more importantly, controlling the inventory in the first place. If you are one of those that “hold on” and continually put out very old, carry-over items or keep discontinued lines, like Willits Carousels, your numbers are going down and your items are not earning their keep.
There isn’t a product line in the world that will sell out at full price. If you buy out of habit and personal taste and are not familiar with concepts like a budget or “open to buy”, I’m betting the farm that your inventory is too high right now!
Look at the big box stores; they are starting this season anywhere from 20% to 50% off. You can too, with very select items. If you bury your head and think of the bygone era of getting your full price until December 26th, you’ll lose for sure. For example, calendars should be discounted when you put them out. Grab that customer and let them know that you can compete.
Buying the right way… but what if I didn’t?
Control your business…not the other way around. Today you must use the computer reports and take them on buying trips and simply buy less and buy more often. (Nashville Wraps has eliminated their small order charge exactly for this reason.) By buying less you have a chance to reselect and react quickly to a bad item. Dump it and run! I all too often hear the expression, “I need my money back” and “there’s a customer for everything”. That may be true; however, I want that customer in this lifetime and cash in hand too.
We have actually experimented and found out the hard truth. You can take an item normally selling at $50.00, say a village house from Department 56, and put them on a sidewalk sale at $5.00 and you still won’t sell them all!!! And that’s after a three-day sale! It’s called “aging”. Why would anyone keep doing the same thing and expect different results? Get rid of it at any cost and jump into this millennium. Things are changing at such a fast pace that you will only keep up by being a very hands-on owner/buyer/manager.
Old inventory has caught up with everyone who didn’t see the slowing of the economy coming. Some retailers with large Department 56 inventories even built extra stockrooms to hold the inventory. They thought it would be their retirement, but have learned a hard lesson in basic retail, called inventory turn!
Old inventory may cost you your shirt
There are owners still holding on to these inventories, when in fact THEY WILL NEVER SELL! Dead wood is costing you your shirt! To pack it up after each season, move it and store it is amazingly expensive, and what about all the damage from too much handling?
Remember, we may be aging, but if your inventory is aging too, you will soon be outdated. Any money you get for older items is found money. And if you can avoid it, don’t have these items out now. Instead, put these items out December 26th and at sidewalk sales this Summer and ONE OTHER TIME ONLY, then dump them!!! Remember, CHEAP COSTS MORE!
How many times have you gone to show and bought a new item and it sold out so fast you didn’t remember it until the next show? Shame on you, that’s lost sales. That comes under the title of “Best Sellers”. Too many items come in and get lost in the shuffle. You can’t do it all, so assign staff to important areas of your store, so they can count it and write up an order for you. Better yet, use that computer for more than scanning; take the time to enter everything, so you are getting accurate and up-to-date reports. Entering can be done after you write the orders at the January, May & August shows. Some companies will even give you a disc with your order on it. Technology is changing every minute, but it works on you side, if you use it.
Have a wonderful Holiday Season.
Bill Sheldon, President
Creating Lasting Memories
Bill Sheldon Designs Corporation