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 bags 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 thumbs 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 Fairs 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 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 if these items are selling well elsewhere there is a good chance they may sell well in your store.
- When the vendor arrives, ask first what they can do to help clear the old 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 product and discussed the vendors 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.
So that’s it! The 10 simple steps to dealing with a vendor in-store. Follow these simple rules and much of that frustration of carrying too much inventory will start to disappear.
David Brown is President of the Edge Retail Academy, an organization devoted to the ongoing measurement and growth of jewelry store performance and profitability. For further information about the Academy’s management mentoring and industry benchmarking reports contact Darci Aselage at firstname.lastname@example.org or call 877-569-8657.