Here’s a retail tip for you: GO BIG or GO HOME!
It’s my retail mantra!
Actually it’s my life mantra too.
Usually associated with NCAA basketball time and March Madness, it also accurately describes entrepreneurial life…
All these teams get ONE shot. If they lose – they go home. If they go big, they advance.
For you, to advance means to increase your profits, right? So how do you go big?
You start by going small first.
This theme comes up with my clients. They are frustrated with a slow month and want to talk about the BIG picture. But I know for certain that the only way to solve the BIG picture is to start small. Elephants are big, right? There is an old adage that goes: How do you eat an elephant? One bite at a time.
That means looking at, and focusing on just ONE class in your store. How would your perspective change if you only had one chance – ONE MONTH – to make this one class work?
The first step? Keeping it fresh…
The key when looking to go BIG in a class is to have new, fresh and good merchandise. It’s imperative to grow your sales and your profits. We call it the Freshness Factor and it’s a measurable metric:
- Look at how much you have received at retail value in your chosen class in the last 90 days
- Divide that number by your total amount of inventory in that class
- Multiply by 100 to get your Freshness Factor percentage (FF90). This tells us how much of your inventory has been received in the last 90 days – and if your inventory is fresh, or not so much…
To get the most profit out of your class, for most retailers and most classes, the FF90 MUST be 100%.
Because if it is, that means that you are bringing in exactly what your customers want, and selling it, and bringing it in again, and selling it and so on.
I challenge you to look at your sales from last month and see which classes are increasingly up over last year. Now look at the FF90 percentage of those well-performing classes. There is always a direct correlation. Always.
Going BIG on a Class:
Now that you understand the importance of Freshness, the strategy to go BIG on a class is to:
1. ID your dogs (those slow moving items) and go BIG on moving them out! Use these tips first to light a fire under these items without a discount, but don’t be afraid to mark them down deeply if they still don’t sell. This will create more cash for you by the end of the month.
2. ID your best sellers and go BIG on ordering more! Order more than you are comfortable with, but go deep rather than wide. Push yourself out of your comfort zone. Don’t overbuy your total Open To Buy plan. But go deeper in it than you normally would.
3. Include your team and go BIG on this strategy! Get your team’s input and buy-in to maximize your results from this strategy.
What class will you choose? Give yourself a goal and set a time to review it again next month, and the next. Watch the progress of GOING BIG!
Managing your inventory is only one part of running a successful store. But the first step you should always make sure you have in place, is paying yourself (and your staff) consistently. Sign up for my free training How to Increase Your Sales so You can Consistently Pay Yourself & Your Staff to learn how to do it!