As soon as you realize you can no longer keep guessing about your buying if you want to succeed, you’ve made a gigantic step forward. Your next step is to set up an open to buy plan. The first bit of information you’ll see is how over loaded your inventory is. Next, you’ll see your buying plan and once your open orders are added, you’ see that you are seriously over bought.
The first thing you need to remember is why you are in business. You did not open your store to become friends with the reps. That probably happened because you bought a whole lot of merchandise. That would make any rep your best friend.
You opened your store to make money and the only way to do that is to sell through your inventory at full price. Markdowns rob you of your contribution to overhead and any profit. The only way to avoid markdowns is to buy the correct quantities and that will be the case if you follow your open to buy plan.
Will your reps be OK with your open to buy plan? If your rep is smart and into the relationship for the long haul, he will realize that even though you will be cutting back right now, over time you will be increasing your orders. But sadly, too many reps will jump right in and start pressuring you to continue your self-destructive buying habits and that’s certainly not in your best interest.
So, once you set up your open to buy, you’ll know what merchandise categories are over stocked and you should liquidate this inventory and turn it into cash as it is not needed to support your sales. You’ll know where your future orders are beyond your needs and should be canceled. Of course, this is where your rep will step up to support you or show his true colors and pressure you to keep the orders (and maybe buy more).
Remember who you’re doing all of this for and stand firm. Clean up your inventory and reduce your orders to the level dictated by your open to buy. Never forget that the numbers produced by your open to buy are based on YOUR anticipated sales and YOUR desired turn rates. It’s about YOUR money.
Now you’ll get to see which reps are actually your friends.