Friday, September 9, 2011

What's on Sale?

Q: (from a new store owner)
I was thinking about the store this morning (day after Christmas)- and thought, now what? I did pretty good with the pre-holiday sales, pondered about opening today (and I am not). I am having a sale tomorrow through the 1st. (haven't decided if it should just be holiday stuff or not and don't know what percentage off). Then there is the issue with the lack of "stuff" until the spring stuff I ordered arrives... and that scares me. I will need some Valentine's goodies, but again, absolutely forgot that when ordering at the mart last July. Any advice?

You are not open today? Honey.... it's the DAY AFTER XMAS!!!! You should not wake up and ponder whether to open- YOU SHOULD KNOW.
Are you in business or not?
Are you trying to make an impression or not?
Are you trying to learn and grow your business or not?
Are you in this for the long haul or not?

Sometimes small stores close up early (for whatever reason; had a good day, had a slow day, was tired, had to run an errand...) If I was a potential customer and went out of my way to come to a store and they were closed- I would be annoyed. It would set a tone for the kind of business they have. Or more importantly, the kind of business they are. (Especially if the hours are posted on the door). They need to ask themselves:
Do they want this to work or are you just experimenting? Is this a hobby or a business?
I am not telling you how to do it as much as I am showing you what decisions you need to make to continue.

As far as what to put on sale now, yes, it should be all seasonal and Xmas stuff and it should be marked down at least 25%. Mine is 50% for the next 3 weeks because I want it out of here. I want customers to have an incentive to buy a lot. I want to get this look over with and go on to the next. But it has taken me 7 years to learn this. I also have stores all around me and newspapers advertising 50% off. If I do any less I will have some explaining to do. I have learned to strike while the iron is hot. You cannot pay for the national buzz that the Day After Xmas Sales can bring to you. It is historic so jump on board. This year I took advantage of some vendors offering 75% off Xmas product, bought into it mid December and marked it up to mark it down during the sale. It is still a bargain for everyone.

When you go into Wal-Mart or Michael's or Hobby Lobby and see all that stuff marked down to 50-75%, do you think they are losing money on that? Heck no. THEY PLANNED IT. They buy merchandise for a sale. They buy extra stuff and over-order just so they can get some money for it during the sale as it is about volume. When customers walk in for bargains, they walk in and buy stuff not on sale as well.

Now Curious Sofa does not want to be a Sam Walton. We are not into palettes of product piled to the ceiling to try and make only $1 on a $10 item. But, I have learned that when buying is in the air, use it for your good. This is why Xmas is out early in some stores and sales are inevitable during December. These are the lessons we do need to learn from the big box stores.

Small shops who are trying to be unique and different do not always follow these sale methods. Why? Because we want to think of ourselves as more special. Our products took a lot more work, we hunted feverously for them- why get rid of them so soon? Why lose money? So we wait it out. We mark something 10% off, then 20%, then a month later 30%... then it looks tired and old and really out of season and we are sick of seeing it and now we want to just give it away. (Do you see where I am going with this?) I had one person tell it to me like this and it made a lot of sense: Mark it to 50% off right away, get your money back, now take that money and buy something that will sell and make a profit faster rather than wait to squeeze the last morsel of money out of something no one wanted anyway!

I had another friend say, when marking something down, ask yourself: Do you still believe in it? That line has saved me a lot as I buy something that I KNOW is great but the right person just hasn't been in yet. I still believe in it. My staff may think it is tired and needs to go in the trash, but I BELIEVE IN IT. This is much easier to say when dealing with a one of a kind item rather than Xmas merch. Don't forget this too: 90% of the time you can reorder it so it is not that special. The store down the street may also have one.

Lastly, not having Valentines or Spring stuff in yet is just lack of experience. Don't beat yourself up. You'll get the hang of it over time. I didn't either my first few years in business. Now I order Spring, Valentines Day and Easter at the July markets and request a December ship date. 85% of my Xmas '08 will be ordered next month at the January market. It took me awhile to learn this but more importantly- to want to order early. I swore I would not be ahead of the game like that. I would not be a store that had Xmas out in September or October, Heavens! My first year in business I did not put Christmas out until the day after Thanksgiving!!!! I WAS AN IDIOT!!! I was trying to make some kind of significant statement that I was not like other stores. That was true. I was not seeing what the consumer wanted or working my business for my benefit. ($$$)

Since then, I have learned to plan, plan, plan. Your VIP customers do the bulk of your business. They come in a lot and they want to see something new. Get it ready for them. Be the first kid on the block with the new toy. After you get the hang of it, you will see how it pays off.

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