Monday, July 11, 2011
Q: When it comes to ordering, how frequently is advisable and in what quantities? For our 1,500 square feet of selling space, we are pretty much ordering continuously--replenishing fast-moving merchandise, ordering "just in case" replacements for items that set the tone in a display that we would be sad to lose and bringing in new lines. This means we are perusing catalogues, writing up "fantasy orders," then whittling them down and putting in reality orders, if not every day, then at least three days a week. Sometimes I think it'd be better to set a goal date for ordering an entire season, as in, all my Fall ordering for every category needs to be done by July 1st and I'll space out my ship dates. That way, maybe our ordering would be more focused and our spending would happen in big chunks rather than going out little by little on a weekly basis. By the way, we have a lot of variety in our merchandise mix but keep to a pretty tight look. I don't know if other retailers have these kinds of questions; I'm just wondering what a more seasoned retailer would advise.
A: Hmmm, I love to think of myself as well seasoned- like a big ham.
Anyway, believe it or not- you are already doing what I am doing and have been doing forever. It makes my accountant nuts as he wishes I had a budget, a plan, a routine. But I keep telling him, "How can I?" You never know when the shelf is empty, when an order will ship, when a customer will buy- I have to flow with it.
Sometimes I order every day. Other times I place small orders ($200) every other day, sometimes large ones ($1,800) sometimes very large for furniture ($5,000) and once an enormous order for a new furniture line ($45,000). Sometimes I'll stop all buying for two weeks to build some cash. It is always about cash flow, supply and demand and inventory level. I have tried to be more scheduled but we're always too busy to do that. We order when we need to, period.
Large items: I carry sofas so I always have to be on the lookout for coffee tables, side tables or trunks as when one sells, the layout looks weird. I also need to have a plan B if a large display unit sells, I need to have backup if a large armoire sells- these items you should buy when you can and always have it in the back of your mind what you will do when something needs replaced.
In a perfect financial world I would love one of everything like this stored away to replace. We sell a particular style of sofa often and I have always wanted to have a matching sofa and chair in a neutral color ready to deliver so the customer doesn't have to wait- but I have never gotten around to it. Again, all about money.
Home decor: Tables and chairs, end tables, dressers, chandeliers, art, mirrors, lamps;
for me these items, although shop staples, can be seasonal. I want to change things up and always have a color or design theme up my sleeve for the next quarter so I order these items based on a new design for the coming season. For instance, every year I do a red, white and blue thing come May 15-July 4. I love it. The flags, the country thing, galvanized buckets, lawn chairs, sand, sea shells. This year the staff said maybe not. So we are doing something else. My order of flags was thrown out and something has replaced it at the last minute. If I had preorderd this, I'd be stuck. I do fly by the seat of my pants a bit as my style and taste and plan can change on a dime because something will influence me.
Seasonal is always preordered months in advance. I have finally learned to order Xmas in January and garden in August. But I will still order more Xmas in August and the bulk of garden in January. It is my other seasons that get overlooked and I always seen to scramble for last minute things. Take advantage of volume discounts and invoice dating for these seasons.
Bath, Body & Candles: These are constantly reordered. Sometimes we no more get an order in and on the shelf than it is reordered again. Other times we try out a new line or scent and it sits awhile. My goal has always been to have a second batch of all these items in the storage room and reorder when that stash goes down- not the products on the selling floor. I am sure this is how the big guns do it as then your customers never see a shortage. Nothing pains me more than to be out of a staple item but we are a lot and the staff has to do a song and dance to please the customer, take their names and make excuses why we're out. I hate that I have put them in that position.
Stationery and Jewelry: This seems to be the two categories I cannot stay on top of as I want to order differently everytime and not carry the same thing. Right now I am struggling with jewelry as we are terribly low and it is a great seller- I should never let it get like this but I always want different vendors and they are hard to find. We have a boutique next to us and all hell breaks loose if they see me carry the same line. Which I don't want to do but sometimes a line carries a color or design that is really our style. Nothing gets me going than a retailer spat or a vendor who does not check the territory.
Another "professional retail way' is the Open To Buy plan where you divide your year into 4 parts spreading out your budget to purchase within each quarter, equal dollar amounts of product. What this means is that Nov. & Dec. could be one 'quarter', Jan., Feb. March & April another quarter, May, June July another and August, September, October another. Your spending is divided among the quarters you have named based on sales (each 'quarter' having about the same dollar in sales) and you order accordingly. Does this make sense as it took me awhile to learn this. Doesn't mean I do it either!
All in all I say buy what you can, when you can. When the backroom has more merch than the front, this is not a good thing- especially if you are not a high volume store. If it is Xmas and 5 wreaths are selling every day then yes, keep them stocked. I personally hate deep orders as I get bored and worry my customer sees too much of the same thing. But, I also believe in being prepared for good sellers so you can make some money on it. Maybe a loose schedule is more your style. For me I have a weekly To Do list. On it is something to take care of every day of the week. Each day we are to check a certain department (or vendor) for inventory. Not a lot of work but it helps me to get a stickie note on my desk of what we are low of. We also have a daily totals sheet we do at the end of everyday. On it we attach a hot item list. The gals write down what seems to be the hot seller so I can make a note and reorder if I think it has a second life. Sometimes one customer buys 6 of something and there goes our stock. Again, try a formula that works best for you. Right now our POS system sucks (that's another entire blog entry!) so a lot of manual work is being done, but good systems can do all this work for you.