Going to Market
As I was preparing to go to Denver for the International Western Show, we had a marketing meeting. The question was asked: "What do you actually do there?"
Many have no idea of what goes in to buying inventory for a retail store. What the lead times are, how do you know what to buy, or how much to buy? Do we just buy what we like? Do we always get what we order? Here’s a bit of an inside look.
I’ve been attending the market in Denver for 28 years. I have bought for a new store just opening. I have bought for stores doing over 5 million in revenue a year. The basic way of buying is the same no matter the scale.
By mid-February, all of Fall 2019 will be put to bed. Meaning that except on rare occasions, what we are going to have in stock in September has already been ordered. In today's retail economy, if it isn't booked by mid February we're not getting it.
How early we need to order has really changed in the last few years. Manufacturers have been hit hard by retailers asking for discounts, and those have eroded their margins. For this reason they have little tolerance for risk. They make what they have sold. On top of that, minimum quantities must be met to even get the factories to build a specific style.
Just one example: In order to get a new style placed for production in a factory, the minimum is 1200 per color per style. On basic items this is no problem. However, when it comes to more specialty items that are wanted or needed in our area, often those minimums cannot be met.
I’m not sure I have the exact answer on how much to buy. We do use historic data. We also use our "gut". If we commit to too much and it doesn't work, it hurts. Markdowns can erase profits quickly. If we don't buy enough, we leave profits on the table because we can't make a profit on product that we don't have to sell.
One "insurance" that I use is my number of years in the business. I am blessed with many connections that are willing to help if I end up short of product. That’s another reason we carry so many lines.
Buying what we like? Trav's Outfitter is an extension of my personality. We carry products that I use. We carry products that meet my list of specifications. There are many products that we could carry and probably would sell well, but we strive to only sell products that deliver value. A cheap price delivers no value. There are many items that we carry that I wouldn't wear or use, but some of those items end up to be great sellers. Ultimately, it’s up to our customer. They tell us what to carry by how they respond to an item.
Getting what we order? Not always. Often there are issues that are beyond our control and our vendors control. Factory issues. Fabric issues. Quality issues. Shipping issues with ship lines or at the port. Issues with customs getting the product cleared. The list could go on and on.
History with a vendor and knowing the principals of these companies helps us navigate this. Again, the better the product, usually the better the company. he better the company, the fewer the issues. Overall, we probably get 90% of what we order on time.
This retail business is not for the faint of heart. I believe that’s one of the many reasons my faith has grown so strong. I have to believe that God has this. That I make the best decisions that my simple mind can, and I trust that God will show up.
Crazy thing is that for over 34 years, He has. I've made so many stupid buying decisions over the years. Each time, He has helped me out of the jam I’ve put myself in.
This has been a crazy ride but I wouldn't trade it for anything!
Until next time,
Blessings to you,