How often do you turn over your inventory? When do you put things on sale?
By Staff -- Gifts and Dec, 6/1/2007 12:00:00 AM
Debbie Dusenberry, Curious Sofa, Prairie Village, KS
We try to turn inventory four to six times a year because that is the retail standard. I learned that from one of the classes I took at market. You need to make $150–$300 per square foot, one of my showroom reps told me, and he was right. He said if you're making $150 a square foot, it can be okay if you're off the beaten path, but if you're in a shopping center you need to be making $300 a square foot. From there, you figure out how many times you need to turn your inventory to make your goals. Some lines move a dozen times and some lines barely twice, so I just try to get a good average. Sometimes, I can literally unpack an item and say, “Put this on sale,” because I see it doesn't fit in. But in general, I try to give it a season. When it's hot, it is gone in a week. So if I see they're not responding, I pull all the retail tricks: move it to another location, show another way to decorate with it, show multiple uses, bring it to the counter — and if it's still not moving within six weeks, start marking it down. But if it is a seasonal item, I run three or four months with it.
Pam Hammond, Paddington Station, Ashland, OR
I turn my inventory about six to seven times a year. We're seasonal, definitely; first quarter is terribly slow here. We have our Shakespeare Festival, and nobody wants to buy anything. My best quarters are the third and fourth — that's really when I do the bulk of my business and my turnover. There's no hard-and-fast rule to when we put things on sale. I have brought things in and said, “Oh that's a mistake,” and marked them down almost immediately.
The second and third re-orders are where we make our money. So if we don't get a good check on it we'll change the display, try to maneuver it to get that interest. But I don't sit on stock; I can't afford it. If I can't get that money, I'm better off putting it on sale and trying the next thing. Do we take it personally? No. I was once told if you're not making mistakes you're not challenging yourself, you're not offering your customer the next wonderful item. You need to keep finding those items you can reorder three or four times so your profit margins improve.
D'arcy Morris-Poultney, Topiary, Halifax, NS, Canada
Depending on the item, we turn over our inventory within anywhere from one to three months. If it's still kicking around after three months, it goes down into the basement ... its last hope before the sale. We have two main seasons — gardening season and Christmas — so there's a sale at the end of the summer and then again during Boxing Week, after Christmas. (Here in Canada, Boxing Week is a big thing, left over from our British ancestry.) Those are the only sales we have. We switch from larger items to smaller, more gifty items at Christmas, so we'll sell off any larger items that didn't move to get ready. The after-Christmas sale is about getting rid of whatever is left after the carnage, so that the store looks fresh in February and March. However, we do purchase merchandise solely for a sale, which not a lot of people do. The benefit has always seemed so obvious to me. If you're getting something at a dollar, pass it on, pay it forward. If you treat your customers well, they'll treat you well.
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