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Reorder Your Way to a Profitable Year | August 16, 2017 (0 comments)
Omaha, NE--At times, it may seem that more cash is flowing out than flowing in to your business. In an effort to keep the bank balance under control it is tempting to not reorder good sellers at this point, justifying the decision by the level of debt.
Now, more than ever, it is important to make sure those best-selling pieces are bought back in. Even catalog items that may have been featured during holiday or other sale periods should be restocked if they were fast sellers. If the item has been a good seller at a catalog special price, it should still be given the opportunity to sell at its full retail. The reality is that if the style suits your customers during the holidays or other sales times, there is no reason they will dislike it just because it is now August or September. The only issue may be one of price – and without testing the market how will you know what your customer is prepared to pay?
By not reordering your best seller, the only choice you are leaving your customers are the old items that they have seen before or new pieces you have bought in that are yet to be proven. The old items have been seen before, and realistically if they haven’t sold during the holiday time or other times of the year, they are unlikely to sell when things are a little quieter. Your new items are unproven. They may become fast sellers, although statistically more than 65% of them are likely to become old. New items are necessary to keep the selection revitalized, but they should never replace or in any way compensate for proven fast sellers.
Your daily sales sheet is like a wish list from your clients. It is their way of telling you what they like in your store. The length of time the item takes to sell, tells you how much they like it. If your sales sheet shows you sell a lot of diamond earrings that are worth between $500 and $1000, then this tells you what your next customers are likely to want to buy. It also tells you which styles your customers like – and chances are if they liked those styles your future customers will probably like them too.
So why not get these good sellers back in? This has never been more clearly illustrated than in the bead market, where good sellers repeatedly sell again as soon as they are reordered. I have witnessed very few store owners who have not reordered their fast-selling bead items; many of them couldn’t imagine doing anything else. However, when it comes to other product lines, the same philosophy goes right out the window--or if it is followed there can be a wait of up to a month before the reorder is done.
The effects of this can be disastrous. I have witnessed stores that have seen their sales volume cut in half in diamond rings because of a failure to restock the core items that were selling well from the catalog or during a holiday or sale period. The assumption was made that this product wouldn’t be required once the catalog/holiday/sale ended; however, without it, this key price point was not being met. The store was waiting until the next catalog to buy in fresh, new, unproven product to meet the market demand, but leaving customers who were seeking these sorts of items to shop elsewhere in between. Once the store owner realized the problem, he was able to ensure the good sellers were restocked at the end of the catalog, and was able to secure better margin to compensate for a slower stock turn. Take the following steps to ensure you have the good selling items your customers want to see:
- Print a stock list of fast sellers from the holidays, and any other sale or catalog (including items not currently in stock). Look to see which items haven’t been reordered back in, then immediately go to reorders and process an order for them.
- SEND THE ORDER. Ordering without sending the order is like going to the gym and not lifting the weights. You can’t leave orders sitting open indefinitely.
- Follow up on backorders outstanding. These are potential missed sales that you need back in store as soon as possible.
It is a proven fact that the most successful stores have a higher percentage of fast sellers than those that achieve lower sales levels. This is not because they are more successful at selling them, but because they are better at doing their reorders. Reordering your good sellers and sending the orders regularly is a recipe to seeing your business grow.
If we can help you analyze your inventory and fast sellers, to obtain a healthier level and selection, please do not hesitate to reach out. Our complimentary Business Opportunity Analysis may be helpful to you.
The Edge Retail Academy is a highly effective jewelry industry consulting company that provides customized strategies for retailers and vendors to increase profits, optimize growth, reduce debt, create profitable inventory solutions, build effective teams and enhance brand loyalty and profitability. The Academy is committed to helping jewelry businesses improve their bottom line while reducing uncertainty and stress. Edge Retail Academy software and the unique talent pool of their business advisors provide real world knowledge and advice for guaranteed results, all on a “no-contract” basis. www.edgeretailacademy.com.
David Brown is a native New Zealander who in three years tripled sales and net profit in a jewelry store he bought in Australia. He is an expert in the areas of inventory management, sales growth strategies, retail systems and staff management and, with the development of powerful industry- specific software, Brown can supply business owners with information and strategies to significantly improve sales, profit margins, control, and ultimately peace of mind. To reach Brown, call (877) 569-8657 or email inquiries@edgeretailacademy.com