A Retailer’s 10 Commandments
Thou Shalt NOT:
1) Overbuy—Buying too much inventory can leave you with aging goods at the end of the season. This strangles your cash flow so you don’t have enough money left to buy fresh merchandise to drive sales.
2) Markdown too late—Light promotions should be sprinkled throughout the sales cycle, and in step with your competition, so you don’t have to take steep markdowns later on.
3) Set high goals without training your sales staff to reach them—Ongoing sales education is a necessity. Without a sharp sales staff, not only will you miss the goals you set, you will also face low morale from a staff that needs more support to perform at a higher level.
4) Buy a line just because you like the salesperson—Successful retailers create strong personal relationships, but don’t let your opinion of a representative cloud your buying decisions.
5) Pay your payables late—Late payments can lead to slow deliveries. It also inhibits your ability to negotiate for higher margin. In fact, late payments lead to lower margins and higher markdowns.
6) Look for newness—The best way to consistently drive sales is by having fresh, in demand items. We recommend that you rotate your vendor structure by 10% to 20% per season.
7) Spread deliveries over the season—New merchandise sells quicker, so if you land all of your merchandise up front your sales will slow over the length of the season. It’s better to spread out your deliveries to help speed sales, keep your cash flow steady and enable you to pay for deliveries on-time.
8) Cancel late orders or negotiate a discount—Timing is everything when it comes to selling into the sales cycle. If you receive inventory too late, you may be stuck with aging inventory that you have to mark down.
9) Ask for expert help when you need it—You can’t expect one person to be a buyer, a seller, an accountant, an inventory planner, a tech expert, and a marketing head. In activities where you don’t feel sure of yourself, get expert help.
10) Stay positive—Retailers who plan ahead, make great buying decisions, and support their sales staffs do well, even in a down economy. Stay positive because anything is possible!