Every shop, gallery or store selling decorative items runs into the problem of having slow moving merchandise. Unused, dated, end-of-line, discontinued and unsalable merchandise is the bane of all businesses no matter what the products are. Here are twelve ideas for you to consider. Rather than the problem being a negative, trying to solve it will open up many opportunities for having a more profitable business.
Method #1. Close-out sales -- usually done after Christmas or in January. Today, there is so much merchandise being sold at reduced prices (even when the reduced price is not really a reduced price) that few people look down on sale goods. Many customers look for sales in order to buy something they thought about but didn't buy at full price.
Some stores like to start the sale immediately after Christmas so the goods are gone before January 1. Some prefer to wait until the week after New Year's Day or later in January or early February. The sale does not have to be limited to Christmas goods. General merchandise can be put on sale during the same time. Some stores have found that with event goods (last year's Valentines, Mother's Day, Father's Day, etc.) it is best to put these goods on sale about 30 days after the event.
It does not say that by putting goods on sale means they were faulty when sold at full price. It may indicate that the buying was faulty. The thing to be wary of is re-buying what was sold on sale.
Method #2 Selective temporary retirement. This relates to #1. Where it differs is that these goods are perennials, ones that would be reordered the next year anyway. The justification for not putting them on sale is that the saving on freight offsets the interest on the money lost because the goods sit on the shelf. Keeping these goods from one year to the next may be advantageous if the prices increase the next year. This hold-over method calls for keeping a very tight inventory control with a very good “rate of sale” information (which differs from total sales). It is wise to re-ticket and price these items when they are reintroduced.
Method #3. Trade-back agreements. Some suppliers offer trade-back agreements. This gives the store the opportunity to exchange slow moving merchandise against an order of faster selling items. Usually it is on a 2 or 3 to 1 basis, i.e., for each dollar returned, the store buys $2 or $3 worth of new goods. If a supplier does not offer a trade-back program, a store might try to work one out with the supplier. Suppliers may subtract 10% or 15% from the trade-in amount to cover repackaging and handling costs. There are several “arguments” or reasons of justification for such a trade-back program. One, the store will, most likely, order more than the amount needed; two, the supplier will get more reorders later of the better selling goods; three, the store will be more loyal to the supplier because the store has a better selection of better-selling items.
Method #4. Buying less. Oh my, what an easy thing to say, what a difficult thing to do. Many buyers believe or are told by their management that the savings gained by ordering and shipping larger orders are a justification for the large order. Some suppliers, in order to encourage larger orders, will offer an extra discount for orders over X amount (determined by quantity, weight, or dollar amount) or pick up the part or all of the freight charges. Whatever saving may be realized is offset by having goods in stock longer than necessary and leads to leftovers...
Experienced buyers find it is best to buy small quantities of an item until such time as it is proven that it can sell. There is nothing wrong with giving a supplier a “Russian order” -- one-of-each. Vendors may not like it, but a buyer's job is not to please the vendor, it is to please their customers and their business. When the latter two things happen, suppliers will also be pleased. By ordering smaller quantities one can control some aspects of what has to be put on sale.
Method #5. Moving goods around. It is not unusual to find that some goods haven't sold because of where they are placed. Moving goods around has, on occasion, made a slow seller into a good, if not great, seller. In retail stores, different things sell better at different times in different places. Some spots are dead for some items at a particular time; the same spot may be a hot spot for others at another time. Because the layouts of stores differ, what is a hot spot for one store may not be a hot spot for others.
Hence, rearranging merchandise may lessen the number of things that need to be put on sale.
Still another plus factor for moving around is that handling items brings to mind goods that, because they have been in one place for such a long time, have become part of the fixtures.
Method #6. Grouping -- putting like things with like things. One aspect of having leftovers is that they are treated as left overs. It does not take more than a few minutes to find a store's leftover area. This melange of items is not a way of showing off the items to their best advantage -- something every store owes to the goods they buy. Grouping items from various suppliers or lines can be by design, color, use, shape, price, material or a combination of any two themes. Pulling things into groups separated by space makes each group important.
Grouping is best when there are 8 groups of 5 items rather than having 1 group of 40 items or 40 individual items. As items are sold out of a group, the group can be reorganized. When merchandise is in one big group nothing is important because customers' eyes get lost in the multitude or variety. Trying to give each item its individual space also means that because all are important, no one is more important than the others. Making groups with a common theme abates the leftover look.
Method # 7. Signage -- something that allows customers to know what the price is without having to turn it over to see the price. Tickets should be placed in a logical placement such as aligned with an edge or rim or to the left of a handle, and always right side up. Many items remain unsold because the price was not where it could be seen . Customers hesitate to ask because they don't want to be embarrassed if the price is too high for the situation they are looking to fill or, they don't want to waste their time if it is not up to their standards (often determined by the price). And, looking for someone to ask is seen as a waste of time.
Stores are now beginning to use point-of-sale or bar coding price stickers (tickets). Although they help with sales figures, they are large and unsightly. They can take away from the perceived value of an item especially if it is of high quality and/or price. Because the price stickers are large, people think that removing them will be difficult (which is true), or doing so will damage the goods. How many sales are lost because of this? I'd say, “Way too many!” Small, “come-clean” price stickers are readily available.
The other format is to type a price list (no more than 5 or 6 items) on a tent card or card in a card holder. With good signage, customers can ask about goods without the previously mentioned fears of being embarrassed or for wasting their time.
Article By:
Alan J. Zell, Ambassador Of Selling
P.O. Box 69 Portland, Oregon, USA 97207-0069
Email: azell@aol.com
Telephone: (503) 241-1988
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