Inventory management is a challenge for most Retail Craft Store Owners. Don't let dead inventory put a stranglehold on your cash flow! Buying is the easy part. Unfortunately, we don't score a home run with every purchase. The holiday charms that we thought would be a hit are still on the shelf in January. The pricey skeins of wool yarn that we loved at the trade show have met with a lukewarm response and summer is looming. It happens to the best of us, but dead inventory carries a hefty price tag; it takes up valuable store real estate, ties up your cash, and broadcasts to your customer that your inventory is stale. If inventory has been on your shelf for more than four months it is compromising your cash flow.
What is the Crafty Retailer to do?
Use a little bit of imagination and some elbow grease to turn that stash into cash! Don't simply dismiss the slow movers with a shrug and rationalize that "they will sell eventually" as a recent store owner opined when asked about product that had been around long past its prime. Rather, take an objective look around your store to identify the dead weight. Most of the sluggish merchandise can be separated into three groups:
Low Hanging Fruit--This refers to inventory that is still desirable and thereby easiest to sell. You might simply have over purchased a particular item, or the season is drawing to a close, but there is still demand for the product.
Toxic Waste--Pet rock, anyone? It was great when it was great, but it ain't great anymore. The problem with toxic waste is that it has a tendency to taint all of the merchandise surrounding it by its very presence. The bitter reality is that toxic inventory has no tangible market value. Get it off the shelf....NOW. Donate it to a charity and take the tax deduction. The neon acrylic yarn might be perfect for a preschool art project but it no longer deserves a spot on your shelf. Forget what you paid for it...that was then and this is now. Cut your losses!
Everything Else--This refers to slow moving inventory that is not as attractive as the Low Hanging Fruit, but is not as poisonous as Toxic Waste.
Once you have categorized the inventory that needs to go, it is time to make it happen. The easiest thing to do is to discount it, but you have probably already done that and it still hasn't moved. Consider the following life support measures:
1. Bundle it! Put together specialty "mixes" that includes some hot "current" inventory as well as selections from the Low Hanging Fruit and Everything Else piles. You can put together an assortment by color (all blue beads, for example) or by category (fingering weight yarn) or even by purpose (embroidery embellishment grab bag). Bundles are a favorite with bargain shoppers and allow you to leverage your losses by including some higher margin items to take the sting out of the discount.
2. Have a contest! Challenge your employees to use the marginal merchandise to make up store samples. You know the drill....make it and your customers will copy it. The employee whose design sells the most product wins a prize.
3. Put together a charity raffle! Create a beautiful basket filled with both incredible merchandise and inventory losers and feature it prominently by the cash register. Ask your customers if they want to participate in a fundraiser for XYZ charity. For every dollar donated a raffle ticket will be placed into a fishbowl. At the end of the month a winner will be drawn and half of the money collected will go to the charity, half to cover your costs. It is a win-win and you are doing a good deed, as well. I can see your halo glowing from here!
4. Offer your sales staff a monetary incentive to move the product. Bribery works well with your kids and it will work equally well with your sales team.
5. Discount it! Put it on sale, but do it with creativity, not desperation. There is something "off putting" about a table of obvious rejects. Use some humor and make it fun! Consider putting the Low Hanging Fruit and Everything Else on a table and sell it all by the foot, by the ounce, or however else makes sense. Put beads in a bucket and sell them by the scoop. Some cash is better than no cash and it all adds up!
RETAIL STORE CHALLENGE FOR JUNE: No excuses....Get rid of your dead inventory this month! Procrastination is not an option....December will be here before you know it and then you will have a choice to make: Write off the loss or pay tax on an unmarketable asset. Talk about adding insult to injury! You need to unload the duds but we want to make it fun! Email us with the details of your Dead Inventory Resurrection promotions and five winners will be announced the first week of July. You have a month to unload the baggage and win an embellishment package featuring Swarovski beads and hand dyed silk ribbon!
JUNE PROMOTION IDEAS: Promotions don't need to be complicated. Do something silly! June is National Iced Tea Month....why not offer a fresh glass to your customers throughout the month? Other dates of note:
Perennial Gardening Month
Turkey Lovers’ Month
National Bathroom Reading Month
National Candy Month
National Rose Month
National Safety Month
National Soul Food Month
National Steakhouse Month
Jun. 6-13 Clothesline Week
Jun. 7-13 National Business Etiquette Week
Jun. 14 Flag Day
Jun. 20 Vinegar Day
Jun. 21 Father’s Day
Jun. 21 Summer Begins
Jun. 27 Great American Backyard Campout
ARTIST OF NOTE: It is always fun to spot someone who is mixing media with sophistication and grace. Artist Alyson G combines ribbon and pearls to create the stunning bangle pictured at left. Whether your store is geared to fiber or jewelry....be inspired to attract the cross over crafter!
Have a great week!
5 days ago