As you look around your store do you see a rainbow of colors? Or do you see GREEN? Let’s hope you see green, because it’s not merchandise you see, it’s your MONEY!
You’re a merchant and you love your store and your customers and your merchandise. And that’s all good. But as we all know, love is blind. If you want to succeed as a retailer, you cannot be blinded by the love of your merchandise. You need to recognize it for what it is – a means to profits.
The only way to make money in retail is to turn over your dollars. The more you turn, the more you make. Each sale provides money to pay the vendor, contribute to overhead and leaves a profit. Sounds good, but if there’s not enough sales to cover all the invoices, you’re in trouble. As soon as markdowns are taken, your contribution to overhead and profits disappear!
The answer is to buy using an open to buy plan. It’s the only way to insure that you buy the right amount of merchandise, in the right categories for delivery at the right time to support your sales, give you the turnover you desire, keep markdowns low and leave you with a profit each month.
So, while a rainbow of colors may be attractive, keep in mind that you’re in this for the green!