One thing all retailers enjoy is buying. And why wouldn’t they? It’s a chance to fill their stores with wonderful, new, exciting merchandise. Every vendor and rep is primed and ready to help you with your quest, to let you know that each item of merchandise is “hot” and will sell fast, so you better buy MORE lest you miss a sale.
Not only are they oh so helpful, but they are your best friends. We all know how hard it is to say no to our best friends and they bank on their relationship (real or supposed) with you. But these are your suppliers, not your friends! And while some of them may warrant your friendship by their actions beyond selling you merchandise, it is imperative that you keep them at arm’s length. It’s not easy, but it’s important to your store’s financial health.
In order to be able to deal properly with vendors and reps, you need to know exactly HOW MUCH you are able to buy. Your open to buy plan will develop information as to how much you should buy in each of your merchandise categories, each month for the next 12 months. This information must be based on your anticipated sales and your desired turn rates – the two elements that drive your business.
Once you have your open to buy numbers, you are ready to face the vendors and reps at a show, a trade mart or in your store. Now your research begins to find the best available items at the best prices for delivery when you need them. Having done your research by walking the corridors of a mart or the aisles of a trade show and looking at everything to build your knowledge, you are ready to commit orders according to your open to buy plan.
So effectively, you will be buying the best available merchandise in the right quantities to meet your open to buy plan. That means you will be able to support your sales, achieve your desired turnover, minimize markdowns, and create a positive cash flow.
When it’s about your money and your store’s financial health, knowing your limits will allow you unlimited success.