Now that the end of year rush is over, the first few months of a new year can see more cash flowing out than flowing in as December purchases fall due for payment. 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 or, in some cases, claiming that items that sold well at Christmas won’t necessarily sell well during the rest of the year.
Now, more than ever, it is important to make sure those best selling pieces are brought back in. Even catalog or flyer items featured for the holidays should be restocked, as many of these are available at the flier price for an extended period after the flier ends. If the item has been a good seller at a flier 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 in December there is no reason they will dislike it just because it is now February. 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 sellers from December the only choice you are leaving your customers are the old items that they have seen before or new pieces you have brought in that are yet to be proven. The old items have been seen before, and realistically if they haven’t sold during your busiest month of the year they are unlikely to sell when things are a little quieter. Your new items are unproven. They may become fast sellers however, statistically, more the 65% of them will become old. New items are necessary to keep the selection revitalized – but they should never replace or in any way substitute 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 shop. 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 in a flier. The assumption was made that this product wouldn’t be required once the flier ended, however without it this key price point was not being met. The store was waiting until the next flier to buy in fresh new unproven product to meet the market demand, 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 flier (usually at catalog wholesale prices) and was able to secure a 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:
1. Print a stock list of fast sellers from December (including items not currently in stock). Look to see which items haven’t been reordered, then immediately go process an order for them.
2. 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.
3. Follow up on back orders 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 that they are better at doing their reorders. Reordering your good sellers and sending the orders regularly is a recipe to seeing your business grow.
David Brown is President of Edge Retail Academy, a management company which works with jewelry retailers to increase their profit.
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