Do you get excited just thinking about going to a trade show? I used to. Each
show is a chance to find new merchandise, get new merchandising ideas, and learn
from the educational seminars. But shows can also cause problems. You’re under
the gun to place orders so you can get first shot at the “good stuff”. There are pre-
books and dating and other ways the manufacturers get you to write orders. But
are you buying the right quantities? Will those orders come back to haunt you as
you proceed through the year?
The trick is to be prepared before you ever set off to the show. The most important
item in your preparations should be your open-to-buy plan. While some retailers
oper-ate with productive open-to-buy systems, the majority are still “shooting
from the hip”. Buying without any regimented planning is a sure route to financial
disaster. Overbuying is epidemic among all retailers. There is no possibility that
the right amount of mer-chandise will be purchased for each area of a store without
proper planning based on anticipated sales and desired turn rates. Conse-quently
retailers find themselves out of balance – short in areas where merchan-dise is
needed and heavy in areas where sales are weak.
Here are ten ideas to help you maximize your trade show experience.
1. Pre-register. It saves time and hassle when you get there.
2. Wear comfortable shoes. Focus on the job at hand not your feet.
3. Take lots of business cards. An attractive business card says a lot about you and your store.
4. Take credit reference sheets. Show them that you pay your bills and that you are in no way a credit risk.
5. Plan your route around the show floor in advance. Wandering aimlessly will cost time and make you miss out on good products.
6. See everything before you buy anything. It’s a big job, but you can only make good decisions with all the information.
7. Rate the desirable items on a merchandise comparison form. Ratings will help you distinguish between the good and the best.
8. Go back and review the highest rated items. Take a second look. Things change as your information grows.
9. Buy on your own order form. This shows the reps that you are treating your store as a business and not a hobby. This also lets you cover all the information important to your store each time you write an order.
10. Don’t overbuy. Bring your open-to-buy plan and stick to it! It’s built around the needs of your store, not those of the manufacturers.
Here are five questions that may help your thinking as you prepare your buying plans.
1. Is inventory an asset? If inventory is an asset it is a rapidly depreciating one. Retailers should think of their inventory as a liability. Not only must merchandise be paid for, housed, kept clean and safe, but it must also be sold before it passes into that rapidly approaching time zone of customer disinterest. Inventory may be an asset at the moment it is removed from its shipping container, but it becomes a liability as soon as it is placed on the sales floor.
2. Does more inventory mean more sales? Don’t put the cart before the horse. The sales generated in your store will be primarily a result of location, season, display, community economics, competition, advertising and service. Of course it is important to have enough merchandise available to support these sales, but having more than the proper quantity of inventory will not mean extra sales. But, it will mean extra payables which cannot be met through normal cash flow. Sales and turnover must be properly projected and then inventory purchased to support anticipated sales – not to fill space!
3. Can accurate buying be done without open-to-buy planning? “Shooting from the hip” implied a certain skill in the Old West, but it implies the lack of any intelligent planning when applied to buying. It is important to have a feel for your merchandise and a rapport with both your customers and sales personnel, but it is imperative to play the game by the numbers. Open-to-buy calculations must be done if excess inventory is to be avoided. There are too many desirable merchandise choices for a retailer to function accurately without proper buying systems.
4. Will markdowns stimulate business? Over the years retailers have developed a “sale” mentality in their customers. Do customers give any credence to a “regular” price? Retailers are constantly reducing prices in order to compete with one another but also because they have too much merchandise. Almost everyone has forgotten about service. Of course there is always going to be the price shopper, but reduced prices are not the main interest for the majority of customers. The right items in the right quantities in the right atmosphere with the right service will bring retailers the kind of sales and profits they are looking for.
5. Is it better to invest in inventory than in sales personnel? Money spent on inventory will sometimes create a profit and some times a loss, but money spent to improve sales personnel is never lost. The greatest asset you can have in your store is your people. Good sales people not only create and maintain a positive image within your store, but they can sell all kinds of merchandise that would otherwise sit dormant. An investment in personnel is one that will pay dividends immediately and in the years to come. Over-investment in inventory will only result in excess payables, customer confusion and markdowns.
Here is your final quiz before you set off for your next trade show.
1. Do you have a specific retail dollar buying plan for each merchandise
category for each delivery period for the next 12 months?
2. Do you have a method for comparing and rating all available merchandise
by category and delivery period before you actually place your orders?
3. Will you maintain control of the buying process by writing orders on your
own order forms?
3. Will you keep running totals on all of your purchases relative to your
buying plan so you will not overbuy?
The most expensive thing you can put into your store is inventory. You need
to buy to support expected sales at the turn rates you want to achieve in order to
maintain a positive cash flow. The only way to insure that this will happen is to
work with open-to-buy planning. Anything else is just guessing – and guessing
When a potential customer enters your store, he should be lead through the store
by your exciting displays. Displays take more space than merchandise and are
very important sales tools. They sell by themselves and they help the salespeople
by giving them a starting point to begin their relationships and sales with the
If you work your open-to-buy before you work the next trade show, you will
have greater control over the entire process. You will know your needs, shop till
you find the best available merchandise, buy on your own order form, and buy to
your dollar plan. When you return from market you will know that you did the
absolutely best possible job for your store. Sure, you’ll be tired, but you can now
sleep every night without worrying how the bills will get paid. What could be better?