Your Business Shouldn’t Wait ‘Til Spring to Heat Up
by Leeia Ladipoh on February 14th, 2008
While it may still be bundle-up weather outside, if you want to be on the ball for your business, you need to prepare for spring selling – even in the dead of winter.
While it may seem like it’s too cold to worry about things warming up right now, spring is closer than you think. If you don’t get moving now, you’re going to be behind when the winter clearances should be giving way to spring arrivals.
Out With the Old
Winter may not be over quite yet, but that doesn’t mean you need to keep the shelves stocked with too much remaining fall and winter merchandise. It’s time to start the markdowns.
You should be making tempting offers that shoppers can’t resist to get rid of those older items. The more that goes out the door, the more money you have in hand to stock the shelves come spring and summer.
In With the New
This is a time when you should be carefully sorting out what you need to keep your shelves full for the upcoming season. You also don’t want to have so much that you lose money on the back end of the year.
As you are working on clearance pricing for your winter line, look at the amount of items you have left to move and do some thinking:
> How far off were your sales estimates for the season?
> How well did you predict which items your customers would like?
> Were your price points good enough to make customers buy?
If you have a lot of markdowns, you should do some re-evaluation. While you could repeat the process, that is going to cut into your bottom line and could cause money hardships down the road.
Instead, it’s time to figure out what went wrong and make it right. Calculate your product turnover ratio to determine how quickly your moving inventory, and make changes to meet your customers’ demands more effectively.
A (Wo)Man With a Plan
While you may think a buying plan will start with a list of what you should be buying, the reality is it should start with a list of what your customers are likely to purchase. You can buy all sorts of things to put on your shelves, but the important items are the ones your customers are going to want.
You should start with looking at what you have sold in the past. If you kept your point-of-sale information organized, you should be easily able to look month by month to see how many of various types of items were sold over the past year. This is a good way to gauge what types of sales you can expect in those same months this year.
Take these numbers and then factor in any upcoming fashion trends for the season that may cause a boost in one particular area, as well as any promotions you are considering holding over the course of the season.
Inventory Matters
When it comes to deciding what to put in inventory, you will, of course, need to have more than you are planning to sell. It doesn’t make a lot of sense to have a bunch of empty shelves. You need to factor in the amount of merchandise you need to set displays and fill in gaps from once an item sells out until new inventory is delivered.
You should always have inventory for 1-3 months of sales. After all, you never know when you are going to have a spike in sales and a delivery slowdown that collide. When you go over the sales numbers from the past year, you should get a good idea of how many of each item you’ll need for 1-3 months down the road, as well as display stock.
This kind of research can let you set up your delivery schedule months in advance. If you do this right, just as you are just getting to the point where you think it’s a good time to restock, the next shipment should be arriving.
Look ahead to sales. Before the season starts you should have a good idea of how long and strong your selling will run before you need to start seasonal markdowns.
Once spring arrives, you can’t just coast along. As the season unfolds, don’t put all that planning paperwork away. You should monitor real time sales versus your predicted sales, and see how close you came. You can use this information to better tweak your business in the seasons and years to come.