Material Retail Dumps

This episode talks about email marketing and we spend a little time going into open rates and why you should second guess them. Is the data being displayed to you real? Find out now. 

Hiring and finding the right people is hard but sadly that's just the beginning. Once you have the employee ready to work, you now need to train and onboard them into your shop. Doing this right can be hard, but it doesn't have to be. Listen to this podcast for a few tips on making life easier when training employees

In this episode, we hear from Robin at y&i clothing. Robin owns 3 locations in Texas and California and spends a ton of time thinking through employee compensation, bonuses, and commissions. Listen to this episode for some real tips on how to use different strategies to motivate store managers and employees. 

This is the first episode in a series of episodes focused on hiring, managing, and retaining employees. In this episode we hear from a boutique owner in Oklahoma who has a very unique way of treating staff. They are not just retail employees, they are #WystleDolls. Listen to learn more about how and why you should think about doing something like this in your own store. 

This episode focuses on how business owners can attract more eyeballs online and turn those views into in-store traffic. We'll have a special guest named Justin who will walk us through some tactical strategies to achieve that. 

https://hbr.org/2019/01/what-does-your-corporate-brand-stand-for
In this episode, we have an extraordinary guest and branding expert named Taylor "Bubba" Gramkow. We spend 7 minutes picking Bubba's brain learning a few powerful ways to have a stronger brand image and how to shine a light on that brand. A strong unique brand is a big factor in getting customers to shop more and more often! We'll also 

Dialing for Dollars. Retail markdown money. 

Welcome to Material Retail Dumps episode 4. My name is Elliot and I’m very excited to be the host today. This is the third and final episode in our gross margin series. In this episode, we will talk about how you can improve cash flow and gross margins using markdown money.  If you haven’t listened to the first 2 episodes in this series, I suggest doing so as it will put a lot of this into context. 

This episode and the execution of these ideas may be a bit uncomfortable for some. But, you know the saying, no pain no gain. 

So let’s get to it, what are we talking about? 

Very simple, when you have a bad style, you know that you need to mark it down quickly and aggressively. So now that we’ve marked the item down and are looking to get our money back as quickly as possible, let’s take another route towards recouping the money. 

Pick up the phone, call your sales rep to explain to them that this style is not working for you and politely ask them if you can return the style. They will very likely say no, guess what, that was the plan. Now you can pleasently accept the no on the return and ask them to discount the item after the fact. So say you bought the item 6 pieces of the item for $20 each, maybe they give you $4 for each item. That’s $24, that phone call likely took 3 minutes.

If you haven’t paid for the item yet, you’ll just pay less when paying the invoice. If you have paid for the item already, just ask for a credit on the next purchase. 

4 Tips to make it work. 

1 - Don’t be shy - This is business, as a customer you are expecting your vendors to provide quality styles that will perform in your store. I am sure the sales rep was not shy in telling you how great the jacket you bought was performing when she came to make the sale. 

2 - Don’t be mean - You need to keep the relationship strong, everyone needs to be respectful. You are simply coming as a buyer, explaining that the item you bought is not selling and you need help getting rid of it. 

3 - Make sure to ask for a return first - It’s best to just get rid of the item and return it. Most vendors will reject you. That’s okay, once they say no, they already feel bad for you, now they will be more likely to give you money off. 

4 - Be careful not to keep going to the same vendor over and over - 2 reasons, 

A - They’ll get sick of you

B - If you need to keep asking them for markdown money because their products don’t sell, you should probably just stop buying from them. 

Well, that’s it for today, thanks for listening! I am very excited about next week, we will discuss branding with a very special guest. 

This is the second in a series of episodes designed to help independent retailers improve cash flow and gross profits by managing inventory more efficiently. Cash flow is the lifeblood of any business, for independent retailers cash flow management can be the make or break. Geared towards Fashion retailers, this series can be applied to many brick-and-mortar businesses.

This is the first in a series of educational articles designed to help independent retailers improve cash flow by managing inventory more efficiently. During hard economic times when customers are more likely to buy gas than clothing, it’s extremely important to manage cash. Cash flow is the lifeblood of any business, for independent retailers cash flow management can be the make or break. Geared towards Fashion retailers, this article can be applied to many brick-and-mortar businesses.

Retailers have high fixed costs such as rent, payroll, utility bills, and more. One thing that most people don’t take into account is that a large portion of your cash will be tied up in inventory, after all, you need a product to sell. Being a small business, you may not find many vendors who are willing to give you credit, and even when you get to that point, sometimes the 30 days of credit is not long enough to sell the product. Most times, you’ve been forced to lay out cash for a product before you sell it.

Some owners will resort to carrying balances on credit cards when buying merchandise, which then brings interest payments into the equation, making the cost of goods even more expensive.

This brings us to the importance of selling your products quickly, or maybe, more importantly, knowing that you are stuck with a “dog” and when it’s time to dump it.

It’s a product that you bought that just isn’t selling. Say you’ve purchased 6 pieces of 5 different styles from a vendor, and in the first month you sell through half of 4 of the styles but in one style you’ve sold 1 or 0, that’s your “dog”. Every business needs to identify when to consider a product a “dog” a good rule of thumb is if something is selling half as quickly as average.

For example, if your average inventory turn is 6x per year, it should take you 2 months to sell through a product. If after 1 month, you’ve only sold 1 of the 6 pieces you’ve purchased in that style, you are on pace to sell through the product in 6 months, which is 3x worse that your average product.

Well, now here is where retailers run into trouble, many retailers make excuses for why the item isn’t selling. Sometimes they are valid, for example, you bought sweaters in August and it’s still 85 degrees on the east coast, in that case, you can wait. However, sometimes the excuses are emotional and not valid, for example, ‘my good customers haven’t come into the store yet’ or ‘if I just put the item in the window it’ll sell forsure!’ Thinking like this and creating excuses for why items haven’t sold yet can be keeping money out of your pocket.

Mark the product down, be fast, and be aggressive. Go straight to 50% off. Just get your money back.

Wrong, let’s look at the math and see what you can do. First, for a dog, you’ve sold slowly.

• First, you buy 6 pieces of an item for $20 each costing you $120
• In the first month, you sell 1 at full price — $50,
• Then in the second and third months, you sell another 2 for 10% off — $90,
• Then in month four, you sell another 1 at 20% off — $40
• Then in month six, you sell another two at 50% off — $50
• So in 6 months, you’ve done $230 in sales and made $110 in gross profit dollars.

Now let’s look at a product you’ve identified as a dog and aggressively marked down.

• First, you buy 6 pieces of an item for $20 each costing you $120
• In the first month, you sell 1 at full price — $50,
• In month two, you sell the next 5 at 50% off — $125
• So in two months, you’ve done $175 in sales and only $55 in gross profit.
• Now you take that same $120 and go buy another 6 pieces of a style for $20 each, this style happens to be a decent seller.
• In month 3 you sell 2 at $50 — $100
• In month 4 you sell another 1 at $50
• In month 5 you sell another 2 at $40 — $80
• Finally, in month 6, you sell the last one for $25
• In total for the second style, you’ve done $255 in sales and $135 in Gross profit dollars.
• In six months you did $430 in sales and $190 in Gross profit dollars.

Let's focus on gross profit dollars, in the first example, when you were hesitating to aggressively mark down the dog, you did $110 in gross profits in 6 months, in the second example, you did $190 in gross profit dollars, that's a 72% increase. Do that 100 times a year and you’ll notice a big difference when you look at your income statement. I guarantee it.

• Don’t get emotionally invested in your inventory, it’s all about numbers. If the numbers are not showing strength, you have your signal to start taking markdowns aggressively.
• Once you identify a dog, be very aggressive in marking it down and getting it out of your store
• Just because you sell something cheaper than you wanted, doesn’t mean you’ll make less money, it means you’ll be freeing up cash and space in store to get a new good style that you can sell at a strong margin.

Looking to learn more about running a retail business profitably? Schedule a call here https://calendly.com/elliot-9/shoptiques

There is a shift in the way consumers are responding to marketing happening right now. If you are a business owner or plan to be one, listen to this guide on First-Party Data to find out what it is, how to collect it, and what to do with it. This guide is written through the eyes of a retail business, but you can apply these concepts to any business.