When you’re in front of a rep or vendor and see an item you think would be great in your store, what’s the first question you ask? Of course, it’s “how much is it?” That’s a great question and one that’s necessary for you to properly evaluate the item’s potential in your store, but it really should be your SECOND question.
When you go to a show or a merchandise mart you should plan for extra time to do research. As a buyer, you’re supposed to be a major snoop and stick your nose into everyone’s line. The more you see, the more you know. The more you know, the better decisions you will make for you store’s merchandise.
You should take the time to see everything before you buy anything. It’s a really bad idea to go to a show or a mart with appointments. To begin with that automatically gives the rep the upper hand as he is “working you in to HIS schedule”. Always remember that you are the customer and therefore, at the very least, and equal in the merchandising process. As you look at merchandise and see great items for your store, you should make notes but not write orders…yet.
And when you see the great items, BEFORE you ask the cost, determine for yourself a selling price based on the items intrinsic value and what you feel your customer will pay for it. By doing this, you’ve established what you feel the item should sell for in your store. Now ask the cost. If the cost supports the margins you’re looking for at the selling price you’ve just established, it’s probably a good item, but don’t buy it yet. Like I said, make notes and give the item a rating. Use something simple like 1, 2, and 3, with a 1 being an item that will fly out of the store as soon as it’s put on the floor. A 2 would indicate a strong seller, and a 3 would be an item you really like, but are unsure as to how well it will sell.
If your usual practice is to ask for the cost and then apply your markup, and that resultant selling price is higher than you would have established without knowing the cost first, there’s a very good chance that you’re buying a markdown.
So, you’re working your way through the show making notes of all of the great items you see and you finish all the aisles. OK, now it’s time to get off your feet, have a beverage, and organize your thoughts. When you’re ready you can retrace your path stopping to look once again at the items that rated a 1. It is very important that the second time you see that item is back in front of the vendor, rather than in your store. Seeing the item a second time (now that you have had an education as to everything available at the show) may make you wonder why you thought the item was so great the first time around. In that case, change the rating. But if you still feel the item is a winner, go ahead and place an order.
And when you write the order, write it at retail since you’re building a retail dollar inventory to support your retail dollar sales. Since everything you do is for your customers and all they see are “retail” dollars, you should think, plan and buy in retail. Yes, your accountant wants to see your cost, but your accountant works for you, even though you sometimes feel you work for him.
Finally, be sure that any buying is in line with your open to buy plan. Be sure you have an open to buy plan and when you do, stick to it. You choose the items, but let your open to buy determine the numbers. If you’re not working with open to buy, myotbplan.com is your best choice for so many reasons. Even if you have an open to buy, you should consider switching to myotbplan.com for those same reasons. Look around our web site, learn how myotbplan.com will help you, subscribe, and be a better retailer.