Edge Pulse and Aggregated Data
At The Edge Retail Academy, we aggregate data from over 700 stores, through Edge Pulse. This allows us to give you up to date and meaningful reports and stats. Take a look at some of these stats below…
All Loose Diamond Sales for 12 Months to Dec. 2016
$97.644M in Sales for 2016 – Fantastic news!!
The quantity of loose diamonds sold in 2016 were 18,569
G Color and SI2 Clarity had the highest sales with average sale of $5,457
Loose Round Diamond Sales for 12 Months to Dec. 2016
$50.227M in Sales for 2016 – Great!!
The quantity of loose Round diamonds sold in 2016 were 9,632
H Color and SI2 Clarity had the highest sales with average sale of $5,511
Loose Princess Diamond Sales for 12 Months to Dec. 2016
$6.374M in Sales for 2016 – Super!!
The quantity of loose Princess diamonds sold in 2016 were 1,578
H Color and SI2 Clarity had the highest sales with average sale of $4,468
Loose Cushion Diamond Sales for 12 Months to Dec. 2016
$5.228M in Sales for 2016 – Wow!!
The quantity of loose Cushion diamonds sold in 2016 were 718
G Color and SI1 Clarity had the highest sales with average sale of $10,704
Loose Oval Diamond Sales for 12 Months to Dec. 2016
$4.19M in Sales for 2016 – Excellent!!
The quantity of loose Cushion diamonds sold in 2016 were 784
H Color and SI1 Clarity had the highest sales with average sale of $7,534
Loose Emerald Diamond Sales for 12 Months to Dec. 2016
$2.2649M in Sales for 2016 –Good news!!
The quantity of loose Cushion diamonds sold in 2016 were 313
G Color and VS2 Clarity had the highest sales with average sale of $16,343
Buying well, starts with planning well. We all have good intentions when it comes to controlling our buying budget but often we find ourselves in a reactive situation rather than a proactive one when making our jewelry buying decisions.
What do I mean? Let me ask you a question. How often do you buy product from a vendor representative who arrives in your store unannounced, or with very little notice? If you do this on a regular basis, then you are a reactive buyer.
Often when a vendor arrives you wander out, have a look through the products and spend more money than was intended to be spent. You buy a few items that look nice and will possibly sell, then receive the items a week later – and wonder why there is no money left at the end of the month!
This may be a little simplistic but hands up for those who admit they have had an encounter with a vendor that went like this at some point?
Failing to plan your buying is the single biggest contributor to the overstocked situation that most jewelry stores find themselves in. Trade Shows are a place of danger for those who can’t control their spending, but the silent assassin is the regular vendor visits where a few dollars spent here and there soon start to add up. The risk of this can be eliminated though with some sound planning prior to the visit and some good habits while the vendor is in-store (not to mention a couple of steps to follow up after they’ve gone)
Follow these steps to a more controlled buying experience:
- Insist that the vendor makes an appointment. Time is precious for both parties. Vendors who arrive without an appointment need to be politely told that unless an appointment is made there will be no looking at the product.
- The day the vendor comes, print a stock list of all products carried for this vendor including items no longer in stock. Determine the buying budget and STICK TO IT.
- Using a highlighter, mark those items which have sold in less than six months from date of purchase, that haven’t been ordered back in. Ask why they didn’t get reordered. Remember an item that has sold quickly has four to five times the chance of selling again than an unproven item. These should be reconsidered first when looking for new inventory.
- Now highlight those items that are aged inventory and have not moved off the shelf. These are stumbling blocks that are tying up cash that could be spent on new or proven items. Make a note to discuss these with the vendor.
- If there is access to the AdvantEdge software program, print a list of good sellers for this particular vendor. This will provide a list of this vendor’s inventory items that are selling well in other stores. This is the perfect starting point for choosing new product as these items are selling well elsewhere, so there is a good chance they may sell well in your store.
- When the vendor arrives, ask firstly what they can do to help clear the old/aged product. If the items aren’t too old, many vendors will consider exchanging them for other pieces. Take the dollar value of what can be exchanged and add this amount to the existing budget to determine what can now be spent.
- Once you’ve dealt with the old/aged product and discussed the vendor’s fast selling items, its then time to look at what else is new, and as yet, unproven. This is your time to experiment – not before! Make sure this is only a small percentage of your buying budget – ideally less than 20%.
- Always ask if the items being bought are exchangeable and if anyone else in the area will be stocking them. Now is the time to set the ground rules.
- Arrange delivery dates for when the product is needed. Deferring delivery to the first of the following month or the completion of a sale will provide an extra month’s credit to pay. Now is the time to negotiate any deferred settlement terms
- Get the new items on the shelves as soon as they arrive and make sure items that are being exchanged are returned promptly. A little training for your staff when new items arrive, is also essential!
Follow these simple rules and much of that frustration of carrying too much inventory will start to disappear. And, as always, if you would like more strategies, for the healthiest inventory picture for your business, please reach out and we can help!
I’m sure I don’t have to tell you how important inventory is to the sales that occur in your business. After all, if you don’t have it you can’t sell it! The fact remains however that success for your store will depend on having the right inventory – and this is more critical than having the right amount.
A quick analysis of your existing inventory will reveal a couple of things. Firstly, a very small number of items are generating a very large amount of the sales. These units will typically represent less than 10% of the items in a US jewelry store, but contribute to over 75% of the sales in most cases. For those of you familiar with the 80/20 rule this is taking it to extremes!
“The typical jeweler allows their inventory to be controlled by their customers, not by themselves”
This ratio of 10% is low by international standards. Although a minority of the inventory will always account for a majority of the sales you would normally expect to see 20% or more of the items contributing this sort of level of revenue. So, if the typical US jeweler can achieve this with only 10% of their items are they getting better efficiency from their inventory?
Sadly, no. You would expect to see a better stockturn to reflect this, but unfortunately, we know many US jewelers suffer from a lower stock-turn. The reality is they are not being efficient, but are, in fact, missing out on sales. Based on achieving these sorts of numbers, if two jewelers had the same amount of inventory but one had 20% of their inventory as good, fast sellers and the other had only 10%, then the first jeweler is offering twice as good a selection – and is on their way to achieving twice as much in sales.
Inventory levels climb during the Christmas period, as can be expected. However, the typical jeweler controls their inventory by not replacing items that sell. If sales aren’t happening, then inventory levels remain high. The problem is, the majority of sales are good items and if the jeweler takes the attitude of not replacing these items, then he is dropping his selection of good selling pieces that are available. They are allowing the customer to choose what inventory should be reduced instead of making that decision themselves.
It is important that the right inventory disappears. In some cases, we have seen the average level of inventory drop with a few jewelers. Unfortunately, during this time the amount of fast selling and new inventory available to show customers has also dropped. This means not enough of potentially good selling pieces were available. So, inventories have dropped, as they have needed to, but it’s not the right inventory. Most stores have weakened their good selection, and this is not a positive.
So what can be done?
- Above all else reorder fast sellers. It is tempting to keep money in the bank but that is a short-term answer to a long-term problem. You need those good sellers to keep regenerating profit. The only way to improve performance long term is from more sales. The secret to more sales is having more of the right product. And the right product is the one’s that your customers are telling you they like –and it’s their wallets that are doing the talking
- Set a plan to eliminate the aged inventory. There are a number of methods to doing this that we can advise you on. In fact, there are different stages of strategies, and difference advice based on the category of merchandise and the specific age of it.
- Control your buying. Don’t commit to finding new unproven items when the pieces that have sold well have not been ordered back in. The numbers don’t lie.
If we can help you analyze your inventory, to obtain a healthier level and selection, please do not hesitate to reach out. Our complimentary Business Opportunity Analysis may be helpful to you.
This is Part 2 of the 5 Stages of Profitable Retailing. In our first article, we talked about Stage 1 – What to do Before you Buy, Stage 2 – How to Buy Better and Stage 3 – How to Sell what you Buy. We will finish with Stage 4 and 5 in this article.
Stage 4 – What to do if it Sells Quickly
Congratulations! You bought something within budget, that was planned, researched, successfully launched and finally ‘sold’. Now what?
It’s a funny thing, that no matter how easy you find it to buy new, unproven product (and again we can see how easy you find it from your numbers), most of you really struggle with the concept of re-ordering it.
Phew, that piece I bought actually sold. That was lucky … now I’ll take the money from that sale and go and buy something that doesn’t sell. Now I know that is not what you ‘consciously’ think or do, but it is what happens in the majority of cases. So why does that happen? Well, in my experience, it’s just a bad habit … habitual ways of thinking and habitual ways of behaving. And not just yours. Your staff and your customers also have habitual ways of thinking and behaving. For example:
- Have you ever re-ordered a fast–seller, and when it arrived back in store, your staff reacted less than enthusiastically … “We’ve sold 3 of those already, can’t we try something different.”
I frankly find that type of behavior extremely arrogant because you are basically telling the next 15 people who may also have loved the opportunity to buy this item, that you have decided, on their behalf, that they don’t want it.
My advice to you is to take the advice of one of my very first clients. Noel is sadly no longer with us, but back in the day when I was running workshops for our clients at a particular buying group, I would ask everyone present “how many of this Ring (whatever) have you sold?” Some would say that they haven’t sold any because they decided not to stock it; others would say they sold 1 but didn’t re-order it; others would say they sold 5 but then they decided to stop re-ordering it … and when it came to Noel, he would say “David, I’ve sold 37 of them.” He never failed to get a collective gasp from the expectant gathering, and when pressed as to how he achieved that, he would simply say, “If a fast-seller sold that day, I couldn’t sleep at night until I knew a replacement was on its way back before I left the store.”
Noel’s behavior was simple, highly profitable and sadly, very uncommon. Pretty much everyone in retail knows that re-ordering your fast-sellers is fundamental to your success, but unfortunately, we see the enormous disconnect betweem knowing what to do (Best Practice) and doing it (Common Practice) which is reflected in their very average GMROI of 70 … or worse.
Just remember, it’s your staff who get sick of selling it long before your customers get sick of buying it.
- Or a customer who get’s upset because the Ring they bought for $2,500 last week is back in store again.
If you told them it was a one-off, then they have every reason to be upset, but there’s a price to pay for ‘exclusivity’ … and $2,500 is not it. Try it for yourself. Go to your local BMW dealer and tell them you’ll order a brand new, top of the range, 3 Series in red with tan leather interior, but only if they promise not to sell another one in the same color. What do you think they would say? Sorry, no can do.
But jewelry is different right? It’s an emotional purchase whereas a car is, well, just a car right? Wrong. The reason people spend $100K plus on a car is all about looking good and feeling good … emotions in other words. Sound familiar.
If you do decide not to re-order a fast seller because you don’t want to upset the customer, please make sure you contact your local competitors and tell them not to stock it either. That’s the only way you can guarantee your customer that they won’t see another one in town.
For those few customers who do ask you if it’s a one-off, tell them that this is a finished product, that you, and other jewelers, buy from a manufacturer, so you can’t guarantee they won’t see other people wearing it … then take the opportunity to sell them an exclusive, custom design piece that you will create just for them … at a price!
It’s a funny thing that many of you will happily re-order cheaper items, but hesitate to re-order more expensive items (imagine if your BMW dealer did that). While I was at a clients store a few years ago, she sold a $4,500 yellow diamond ring and a $3,500 watch to a good customer. Both items had literally been in the store for 1 day (I actually delivered them to her on behalf of the vendor), so before continuing with our management session I told her to re-order them. She looked at me like I was a crazy man …. “I wasn’t going to do that.” I said, well there’s really no point in us continuing with anything else today because this is ‘Retail 101’. You bought them believing they would sell, you proved yourself spectacularly right and then you hesitate because it was just a lucky sale! Long story short, she re-ordered both items and went on to sell 4 more of the rings and 12 of the watches within 4 months. I even had the watch manufacturer ask me if he could use this story to help educate his other clients.
So how fast is fast? This is one of the most common questions we get asked, and the answer is, it depends. It depends on what the item is, what the price point is and how quickly the vendor can replensih it.
As a rule-of-thumb, you should re-order everything that sells within 3 months. If something sells in 3 months it has the potential of a 4 times stock-turn … significantly higher than the industry average of 0.7 (i.e. takes 17 months to sell). Net re-order almost everything that sells with 6 months, regardless of price, but use some discretion around stock-turn i.e. if you need a 3 times stock-turn for this product and it takes 6 months to sell, the best you will achieve is a 2 times turn.
For some items, I would still re-order them even if took nearly 12 months to sell because it was at a higher price point; it had a great margin; by being in the store it helped sell other items etc.
The key is to use your judgement and entreprenurial skill on an item by item basis, remembering that if it sold quickly once, it has an 80% chance of selling quickly again, and again.
- If it sold quickly, re-order it immediately (before you leave the store) regardless of price
- Pay quickly and help make yourself important and special to your vendors
- Keep re-ordering UNTIL your customers stop buying it
- Keep your staff motivated to repeatedly sell proven, popular items.
Stage 5 – What to do if it Doesn’t Sell – your ‘Exit Strategy’
Before you even buy an item for the first time, ask yourself these three questions:
- Who am I buying it for? Who is my customer?
- What will I do with it if it doesn’t sell?
- When does the ‘Exit Strategy’ kick in for this item?
Yes I am suggesting you determine the time it should take to sell each item before you buy it. If you get that niggling doubt when you ask yourself this question, maybe you’re already not convinced it will sell … so are you buying it because you personally like it (just like the 65% plus of aged inventory you still own), or are you buying it to make a profit?
When is old, old? Just as we pondered this question with the fast sellers, we now need to determine when an item is no longer new or a fast seller … in other words, old.
One of the things we do at the Academy, is analyze the data from hundreds of stores, and as a by-product of this, we have identified an interesting statistic … and that is that a new or re-ordered item, has the best chance of selling within the first 39 days. Don’t ask me why, it’s just one of those strange facts.
Likewise, the likelihood of it selling quickly after 39 days goes down dramatically. It’s a fast and slippery slope from 39 days until the item is celebrating it’s first birthday with you.
So am I saying it is old after 39 days? No I’m not. But I am saying it is on it’s way to becoming old, and if you ignore it, chances are it will ‘hide’ and only reappear after a couple of years when it can no longer be ignored.
One of the reasons for this phenominan is that your staff stop showing it. When it was new, they showed it enthusiastically to anyone who would listen, but after 39 days of rejection and negative feedback, they lose confidence in it and start showing the newer item that has just arrived. And boy how quickly that happens.
You know it happens because:
- You staff have come out to the office and asked if that new stock that has just arrived from the Show you just attended is ready to sell. They just walked past $80,000 of perfectly good Diamond braccelets to get to the new one.
- Or, have you employed a new salesperson, and in their first month, they sell a bunch of old stock because … they don’t know it’s old! And nor do your customers.
So you have two choices:
- Replace your staff every 39 days or
- Continue to work with your existing team everyday to keep the new inventory fresh and alive and to train them on showing and selling the aged inventory.
I think you know I’m joking about replacing your staff … unless they really are the problem – but that’s a topic for another day!
To help you get aggressive with inventory that doesn’t sell quickly, let’s examine the cost of ignoring it.
Most industry experts agree that if you still own an item 12 months after you bought it, it has cost you an additional 20%. So that $1,000 item now owes you $1,200. Why?
- You have to insure it
- You have to promote it
- You have to pay staff to clean it and take it in and out of your displays every day
- You have to put a roof over its head (rent)
- You have to pay tax on it … yes even if it doesn’t sell
- You have to finance it … if you have any loans or debt, your aged inventory is costing you, and even if you don’t have debt, you could be earning interest on that money.
But it gets worse. If that $1,000 was invested in stock that sold quickly at a margin, it would earn you at least $1,000 of profit (a 100% return/GMROI).
So now that 1 year old $1,000 item owes you $2,200 … and it compounds with each passing year! Can you still afford to ignore it?
And worse still. The item that now owes you $2,200, is worth, at best, 80% of what you paid for it i.e. $800. How is your ‘investment’ looking now?
A client of mine had the right attitude to aged inventory. She hated it! She said “If my customers don’t want it, nor do I. Get rid of it!” And it worked. Out of more than $700K in inventory, she had $12,000 in aged inventory. Admitedly that is the best I have seen, but it proves with the right attitude and the right strategies, it can be done.
Okay, now that we know ‘why’ and ‘when’ to get rid of it, let’s finish with ‘how’.
You have several options available to you, and the earlier you trigger them the better:
- Get into the habit of identifying new items of aged inventory, and revisiting existing ones, at least every week.
- Decide on a course of action. Your options are:
- Remake it using the stones and metal into a known fast-seller or ‘special order’
- Return or Stock Balance it … but only if those are the agreed terms you have negotiated with the vendor and … you have honored your part of the deal i.e. trained your staff; re-ordered all of the items that did sell and paid for them quickly. The benefit of doing this as soon as it shows signs of growing old is that is will still be a current model for the vendor so they can on-sell it.
- Sell it:
- Clean it, re-ticket and re-price it to today’s realistic selling price.
- Make sure it looks new and then treat it as new i.e. enthusiastically. Actively show it to customers.
- Provide a ‘Spiff’ incentive to you staff before discounting it to your customers.
- Agree on ‘Discount’ terms with your team and incentivize them for selling it at a lower discount than the agreed discount. I would rather incentivize your staff rather than your customers … because your customers will come to expect a discount next time.
- Run a ‘Sale’ or ‘Promotion’ after exhausting all previous options. Guard your reputation by not becoming a ‘Discount’ store but also guard your image … no one wants to go into a store full of old merchandise.
Your website can be a good option for clearing aged inventory and putting some distance between it and the physical store.
- Scrap it.
- Donate it and write it off to ‘Advertising’.
- IMPORTANT: Keeping it and ignoring it is NOT AN OPTION!
- Constantly enrole your team on the reasons and benefits of doing this.
- Delegate the process where possible and consider appointing an ‘Aged Inventory Champion’.
- Make pragmatic, financial decisions not financial ones. You made a mistake, get over it. Don’t make another one by ignoring it.
We hope you have enjoyed both Part 1 and Part 2 of this article, to learn all the strategies of Profitable Retailing. If you would like more customized strategies to bring your business to the next level, please reach out to us so we can speak further.
Edge Pulse and Aggregated Data
At The Edge Retail Academy, we aggregate data from over 700 stores, through Edge Pulse. This allows us to give you up to date and meaningful reports and stats. Take a look at some of these stats below…
Diamond Engagement Rings, Diamond Wedding Bands, Diamond Rings Other, Precious Metal w/o Stones Wedding Bands, Sterling Silver & Alternative Metal Wedding Bands
A few months ago I spoke about the importance of setting budgets and using them as a tool to drive your business forward. No doubt you have followed through and now have a sparkling new budget freshly prepared for 2017, right?
A good budget is like a speedometer on a car. Let’s say you are going out for a drive one day and you need to get to a town 200 miles away. You leave at 9am and know that you need to get there by 1pm. To achieve this you will need to travel at somewhere around 50 miles per hour for the entire journey. Comparing this to your business performance your “destination” would be to say you want to achieve sales of $1 million dollars. Setting the time frame for your journey is like saying you want to achieve this goal over the coming 12 months.
Now imagine you start your journey and discover your speedometer isn’t working –and what’s more there is no signage along the way telling you how much further it is to your destination or how far you have come. Frustrating isn’t it? You don’t know whether you are ahead, behind or on time to reach your destination by 1pm. You know how much time there is left but don’t know how far you have to go. The likelihood of achieving your destination in the required timeframe has now become that much harder to achieve and is largely left to guesswork.
From a business perspective, if you prepare financial information for your business monthly or quarterly this will give you some idea on how you are going relative to your financial destination – but like your car speedometer it can be hard to know whether you are on track during the periods between the reports. Financial information is mostly historical and untimely – a bit like that road side sign you saw 10 minutes ago that told you that you still have 120 miles to go. But again without your speedometer you won’t be able to work out how you are going until you see the next sign. An effective budget (or Sales Plan as we prefer to call it) can help provide timely, relevant information as you need it – on a daily basis. This is the equivalent of your speedometer telling you right here and now whether you are ahead or behind on your speed. A good Sales Plan allows you to measure your business DAILY so you know whether you need to put your foot on the gas or not.
If you haven’t done so yet, break your budget (Sales Plan) down into daily targets across each department and monitor it every day during the year. The time to take action to rectify your budget if you are falling behind is after the first few days of the month, not when the month is over. Use your speedometer, and don’t just wait for that next roadside sign to come along.
If you would like to know more about creating a Sales Plan that you can use daily to drive your business forward contact Becka Johnson Kibby at Becka@EdgeRetailAcademy.com or 1-877 569-8657, Ext. 1 today.
Now is the perfect time to reassess the passing year… i.e. what has been successful and what hasn’t. I encourage you to share some of the questions with your team at your next meeting.
Example of things to review:
- Your Team: Staff levels and rosters; attitudes and enthusiasm; incentive scheme results; daily meetings; selling skills and product knowledge … who gets to stay and who doesn’t? Remember the 3 T’s … Terminate, Tolerate or Train
- Your Inventory: Which inventory worked and which didn’t; which categories performed best and why; which categories didn’t work and why not; your strategy for reducing aged inventory; your inventory level and mix; your open-to-buy fund; your re-orders and inventory processing; your vendors … who was reliable and who wasn’t; your average sale; your displays
- Your Customer Culture: Your ‘point of difference’ based on the lifetime value of each customer; your risk-free purchase guarantee, free battery replacement, extended warranties, etc; hours of operation, the experience each and every customer receives when they are in your store
- Your Marketing: What worked and what didn’t; how much did you spend and on what; which medium worked best; how was your catalogue/direct mail distribution; what will you repeat next year and what will you drop, what did your customer respond best to?
- Your Finances: Did you have a sales budget (Sales Plan) each day and how did you perform; how was your cash-flow in January … and how is it now? Do you need a full financial analysis with advice on where to save money and create more cash flow?
- Your Information & Technology (IT): How did your systems cope, what will you add/change next year, how does your staff effectively use technology to create more sales?
- Your Self-Management: Did you keep a daily log book of what worked and what didn’t (you’ll never remember it next December!); did you work smart or hard; did you delegate effectively; were you well-planned and relaxed or did you “wing it” and feel stressed; did you delegate effectively; did you get prepared ahead of time, so you could enjoy all the interactions with clients?
- Your Organization & Management Systems: Were you happy with your Layaway balance coming into December; your repair system; your office systems, etc…?
- Your Retail Strategies & KPI’s: Did you have a specific average sales target and how did you compare; your conversion ratio; the number of sales per customer; how did discounting affect your total sales and profits?
- Your Opposition: What did they do that seemed to work and how can you do it better, when did they advertise … is there a pattern to it …
Review and conquer, with the New Year, here! You should already be in the middle of planning your strategies for 2017. Smart retailers will take this opportunity, to review what went well and what could have gone better in 2016.
Starting now, it’s the perfect time for retail owners to sit down and have a good hard look at how their businesses are and have been running.
Although ongoing performance monitoring is important, it’s also critical to dedicate a particular time of the year for setting some clear goals and asking some strong questions about where you have been and where your business is going.
This exercise is worth doing with the whole year in perspective. Why review what is already history you may ask? If you don’t learn from history then you are destined to repeat it. If business wasn’t as good as expected, then the last thing you would want is to repeat it!
Below, are some relevant areas within a business and the types of questions that should be asked.
- Did you spend more or less money on marketing activities compared with previous years?
- Did that reflect in more or less customer traffic?
- Were there items marketed that created high demand?
- What effect did you notice from competitors’ marketing
- What will you do differently for the next year?
- Were there product categories that were short of product, thus resulting in lost sales?
- Was this a purchase issue or a continuity of supply issue (i.e. a buying issue or a supplier issue)?
- Were there any customer product requests that you could not satisfy or offer an alternative? Were there any issues with re-orders that potentially cost sales in December? If so, how can these be minimized?
- Were there any issues with product quality (This could have a negative impact on staff confidence with the brand/supplier)?
- Did the items you purchased, sell?
- How much aged inventory did you successfully target and sell?
- Were there vendors who let you down with re-orders?
- Have you made them aware of this? What will you do to stop this being repeated?
- Were there any vendors that had sales that exceeded your expectations?
- What do you plan to do about this?
- Were there vendors that you had Memo product from? How did this perform?
- Have you returned the balance and paid for what you sold?
- Were you happy with the staff’s performance?
- Are there any members that need recognition for exceptional performance?
- Are there any that need re-focusing because of poor performance?
- Did you give team members enough direction and motivation? If not, what is your plan to change that?
- Could you have allocated hours better?
- Did you have your best people working during peak times?
- Could they have benefited from some additional training?
These questions have not been developed as a complete or exhaustive list but should rather act as a catalyst for jewelers to ask better questions regarding themselves and their businesses.
Moving Onwards and Upwards
Now it’s time to look forward. This means setting some Key Performance Indicators (KPIs) and asking how these numbers ideally should look – again both for the year ahead and for the next December’s sales goals.
Sales, Gross Profit and Net Profit
- “Most people aim at nothing and hit it with remarkable accuracy.”
- What are your sales, gross profit and net profit targets for the coming twelve months? A clear goal will increase the chances of hitting targets, which is the most important goal of all.
- Do you have too much, too little or just enough stock?
- What do you need to achieve your sales goals?
- What’s the plan for obtaining your optimum inventory level?
- What does your aged inventory status look like?
- If you have debt – both personal and business – what targets are in place for reducing it?
- Are these targets broken down monthly so you know how much you want to see your debt dropping throughout the year?
- What hours do you plan to work this year?
- Will you do more or less?
- What would be your ideal workload in the coming 12 months?
Finish by Following this Formula …
Four Key Areas that Business Owners Should Address:
- What should you do more? This involves looking at what worked well – either by careful planning or sheer good fortune – and whether these processes can be expanded.
- What should you do less? Think about the biggest frustrations over the past year and how you can have less of them. Delegation is at the forefront here.
- What should you start doing? Don’t procrastinate; make changes now!
- What should you stop doing? Are there product lines that are no longer profitable or staff members who are no longer an asset to the business? Are there activities/tasks that now appear pointless?
If you want the next Holiday season and 2017 to be different from previous years, then plan ahead now. It’s never too early or late to make New Year resolutions!
For retailers who are looking for even more guidance on how to make positive changes in the year ahead, we are happy to assist you. If you are interested in a complimentary business opportunity analysis, please let us know that as well. 877-569-8657, ext. 1 or Becka@EdgeRetailAcademy.com
The next few months promise to be busy one’s for most stores, with trade shows and group meetings taking up a good chunk of the calendar. Often, depending on their store location, this presents the only opportunity for some store owners to meet with other store owners and to purchase from vendors.
Attending a trade show or buying meeting can involve some cost, but presents many opportunities to gain valuable insights and information for your business. Like any investment however, you need to make sure you maximize your return on the time spent there. With accommodations, airfares, meals and entertainment, sometimes for more than one person, it is crucial to plan your trip to ensure you make the best use of your time and give yourself every opportunity to take advantage of the knowledge and buying opportunities that will be presented.
Below, are a few of the key steps you need to do before heading to each show:
- Set yourself the goal of learning one strategy from a colleague or consultant that will pay for your trip. I know one retailer who was always watching for the “ ah-ha!” moment from each show or meeting he attended. This would be the one idea that he could implement in his store to cover the cost of the trip. He never failed to come away with that one idea everytime, mostly because he was looking for it. Make sure you are watching for that “ ah-ha!” moment at your buying meeting. Make an apppointment with someone who can help you work on your business – either a consultant or a colleague who you admire and respect. Again, making that appointment lets them know you value their time and knowledge and makes it clear that you have a purpose.
- Schedule appointments with your key vendors. Yes, you need to make time to chat with people along the way but setting up times to go and see your key vendors gets you better organized and let’s them know you value their time as well. Once an appointment is scheduled it forces you to get organized before you go, as opposed to simply wandering from booth to booth.
- Determine your objective from each vendor. You may be looking for new product or wanting to discuss exchanging existing product with the vendor. Whatever it is, have a goal of what you want to achieve from the meeting. Make notes ahead of time, to help remind you of the important topics and strategies to discuss.
- Get your printouts done before you go. The key reports you will need are:
- Inventory report by vendor
- Sales report by vendor
- Stock by Age report
Use your Stock by Age report to determine what departments have too much inventory and identify where more product is required. You can then use the inventory report by vendor, to look at particular products for that vendor. Ask yourself questions such as:
- What product does the vendor have that I might need? (software such as AdvantEdge, can help you pinpoint what is selling well elsewhere, that may sell well for you)
- What product from the vendor is not selling for you? Now is the time to discuss this in more detail with them. Are they able to help? Can they make any suggestions?
- Use your sales reports to look at what has sold that you haven’t reordered. Should you get it back in?
- Ask yourself what area of your business most needs work. Is it your marketing? Then seek out someone who can help with this area. Do you need to develop your staff communication? Then look for help on this subject. Is your inventory out of control? Then there is advice to be obtained on this. Guest speakers are at many of these events and have a wealth of knowledge to share. Make sure you take advantage of this.
There is no reason, with careful planning, why a buying meeting, or trade show can’t yield some wonderful opportunities for any progressive retailer. Making sure you plan ahead, will give you the best opportunity to use these events as a springboard to new growth.
One of the services the Edge Retail Academy offers, is an Open To Buy plan, prior to attending any trade show. We will help you determine your optimum inventory level, then teach you how to keep it there! Please let us know if this would be helpful for you. Becka@EdgeRetailAcademy.com or 714-925-2456