If it is, it’s a rapidly depreciating one. Even with that in mind, most retailers feel that having more inventory is a good thing. Fill up the store with big quantities of great items. And they do just that. And then the invoices come in and the sales are not generating enough to cover them and the overhead as well. To say nothing of your profit.
There are so many vendors with so many items that it’s really hard to stop buying. Going to trade shows or merchandise marts is like being a kid in a candy store since we’re all product junkies. “I can sell that!” And of course, the reps are there rooting you on.
But too much of a good thing is a bad thing. Every retailer needs to buy to support sales, not to fill space. Too many retailers think the process is to buy and then sell. Really, the process should be plan, buy, and sell. If proper planning (open to buy planning) is done, merchandise will move in and out of the store leaving behind enough income to pay your vendors, your overhead and yourself.
What do you think?