PERSPECTIVES

From The Co-Founders

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Tips, Tactics & Strategic Insights and Commentary
from The ROI Co-Founders, Pat Johnson and Dick Outcalt
Outcalt & Johnson: Retail Strategists LLC; Retail Turnaround Experts

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Answers to Those Top Two Buying Questions

There is much enthusiasm coming out of the buying trade shows, and why not? 

Attendance levels have been near to or better than 2019. Energy levels are high, and very contagious. A sense of urgency persists, due to past supply chain issues, emboldening the pressures from the vendors to "Buy now!" 

Especially in today's environment, FOMO - the Fear Of Missing Out – can be a compelling sales pitch.

How to deal with this pressure, especially given all the headlines about a coming recession, or drops in consumer spending, or cautions about the need to control expenses, improve profits, maintain cash?

Here are two tactics to help you manage this. One helps monitor and control "How much to buy?" The other helps decide "What to buy?"

"How much to buy?"

As you prepare for a buying trip, have your Buyer's Tally Sheet at the ready. (Download the pdf here; make as many copies as you need.) 

  • Based on your Open-to-Buy plan, enter your buying budget for each department before you head to the show. (Or, immediately upon your return.)
  • At the show, simply pencil in how much you have ordered from each vendor for each department, and when you expect those orders to be received.

Yes, it all is done with a pencil. It is a simple, practical, and helpful way for you to keep within your buying budget. (And it's free!)

"What to buy?"

Here are 6 key questions for you and your buyers to ask anytime buying decisions are being made: at shows, browsing online wholesale platforms, meeting with sales reps in your store, wherever and whenever.  

We think of it as an "entry exam" for merchandise. It's a very quick way toidentify which items actually deserve to be in your stores.
 
1. Can my customers get this item at other stores in my market area?

  • YES? Careful; it probably has no pulling power.

2. Is this subject to a lot of price competition?

  • YES? Slow turners with weak margins are double trouble.

3. Does having this item in stock help me sell other higher-margin merchandise?

  • NO? If not, you may not need it.

4. Can I get faster delivery on this item than I am now getting?

  • YES? You may be able to cut back on your stock.

5. Do I order larger quantities of this item than I actually need in order to take advantage of price breaks?

  • YES? Caution advised. You may be coming out on the short end when you figure in all the costs of excess inventory.

6. Do I have an emotional attachment to this item that reflects my personal taste rather than a business-like response to my customer’s desires?

  • YES? Best to avoid it. 

New items? Of course! The customers always want what's new. 

Too much of a good thing? Not any more!



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