Carol L. Schroeder

A: I admire the fact that you are respectful of your sales reps' time, and that you realize if you don't write any orders when they come to your store, they don't get paid. But it worries me that you don't plan to buy any new merchandise. Even in a difficult economy, it takes exciting merchandising to bring shoppers back into your store regularly.

Perhaps you can free up some inventory dollars by taking a serious look at what is now on your shelves. Make it a daily project to dust and evaluate one section of your displays, and see what slower-selling items you find that you can translate into money for new merchandise. You'll also find that the goods you keep will sell better from freshly cleaned and rearranged displays. As my mother-in-law used to say, “merchandise well kept is half sold.”

Take a few days to go through your stockroom as well. If you have broken items that can be fixed, or odds and ends that can be combined into one gift package, spend some time getting these goods ready to go. Make it a policy in the future that you will not store much seasonal merchandise from one year to the next. Better to clear it out at 40 percent off and have a healthy open-to-buy in the coming months.

It costs money to keep old merchandise around. Not only do the items sometimes lose their value by getting shopworn, but there is also the lost opportunity cost if you can't use the money — and shelf space — tied up in older goods for something that potentially will sell faster.

How can you free up those dollars? The old standby is of course to hold a clearance sale, marking down all the goods that you want to get moving. Perhaps you can do this together with other merchants in your area as a joint promotion. We do both: an annual spring sale in our store, and a fall outdoor street sale with our neighboring businesses.

You might also want to consider a private shopping event for your top customers, with a percentage off (20 percent, for example) storewide. This may mean selling some merchandise at a discount that you could have moved at full price, but it rewards your best customers and raises cash at the same time.

Another way to move a specific line more quickly is to bundle items together, either offering buy one, get one free (BOGO, as it's known in the trade) or buy one, get a second one at half price. You can use the latter to combine two different items, such as “buy a cheese knife and get half off on a bamboo cutting board.”

Certain types of clearance items, such as retired collectibles, may find a more ready market on eBay or your website. Someone in another area may want the merchandise that your local customers did not. You could also consider selling a quantity of goods to another retailer. You'd have to take less than wholesale, but you will net more cash than if you donate the goods to charity — which is the next step in getting rid of items taking up shelf space unproductively. Your goal is to have every shelf to be well dusted, and well stocked, when the next customer walks through the door.

Q: We are just barely meeting our expenses each month, and I am worried that if we slip into the red we will need to lay off some staff. How can we prevent this?

A: I hope that you are able to avoid cutting back on your staffing, because as I've often said, excellent customer service is one of the key elements that sets an independent retailer apart from its chain store competitors.

Although I don't have a magic fix for you, I have come up with ten ideas for trimming expenses that may help your bottom line — and in many cases, benefit the environment as well. Remember, a small savings every month can make a big difference by the end of the year. Hopefully at least a few of these ideas will work for you:

• Redo your lighting to take advantage of new low-wattage technology
• Turn off computers and other electronic devices when you aren't using them
• Use setback thermometers to make sure that you are not wasting heat
• Use Craig's List, or a “freecycle store,” to find used fixtures and store equipment
• Send out regular email blasts instead of printed mailings
• Cut your Yellow Pages advertising down and increase your Internet presence
• Follow up promptly on all claims to vendors for broken or missing merchandise
• Reuse shipping boxes and Styrofoam packing peanuts for customer purchases
• Cut freight costs by ordering from regional vendors and consolidating orders
• Hire high school or college students to help with Web and advertising design

If you do still find that it is necessary to cut back on your staffing, take a good look at your sales per hour and try to allot your staff hours based on when you are busiest.

Ask employees if they would be willing to work fewer hours on a temporary basis rather than losing any experienced personnel through layoffs.

It will be much more costly to hire and train a new employee when times get better, as we all hope they will soon.