I’ve spent many hours on the phone with my customers and it’s my greatest pleasure to be of service. But the special moments are the break through ones when the customer suddenly “gets it”. When that light goes on and they realize that it’s time to stop supporting the reps and manufactures and start turning their inventory and supporting themselves, it makes my day!
Sadly, too many retailers continue to add more and more merchandise to an already over stuffed inventory because they think that more inventory will mean more sales. More inventory only means more invoices and more markdowns.
Also, retailers tend to love what they buy and feel invested in it and don’t want to mark it down and get rid of it. But, if it’s not selling, it’s costing you in overhead and profits. Inventory is not an asset no matter what your accountant puts on your balance sheet. It’s a liability and the longer it sits in your store, the more it depreciates.
The most recent conversation I had with this particular customer was about her need to buy more inventory to fill a manufacturer’s display. She actually had enough product to support her sales for TWO YEARS, but there were holes in the display. The display was provided for the manufacturer’s benefit, not the retailers. Don’t allow yourself to be taken in by their schemes. Create your own displays that spread out the merchandise, but call attention to it. The watch word here is to be creative. It’s much easier to just buy more than to think more.
The truth is that small retailers are really very creative people that tend to forget about that aspect of their business because they get burdened with the many decisions they need to make on a day to day basis. Then, when it’s time to buy, they just buy and therein lies the problem.
Creativity should come out in displays, promotion, generating exciting sale ideas and in merchandise selection. But the merchandise selection MUST be guided by projected sales and desired turn rates, not on what looks good or what the reps are pushing. An “open to buy” system will develop the buying numbers that become the basis for you to apply your creativity. Without open to buy, you will always overbuy and be constantly chasing your tail trying to pay the bills.
And that’s the truth! Can you handle the truth?