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Travel through another dimension of inventory management
Ever feel like your inventory has entered the Twilight Zone “…a dimension as vast as space and as timeless as infinity”? Today’s the day to make some changes. Smart inventory management is the difference between running a lean, mean resale machine or entering that “fifth dimension beyond that which is known to man.” The Twilight Zone of inventory management may not sound like a good place to be. However, I promise, you’ll be glad you visited!
Dimension 1 Time
A bit of wisdom I read comes from Ted Hurlbut of Hurlbut & Assoc., retail consultants. He says small retailers, who think of their inventory in terms of weeks or even days, experience healthier cash flows. Most consignment shops operate on a 30, 60 and 90-day cycle. They immediately have an advantage on inventory management by time. Unless you’re dealing with a fine wine, inventory does not improve with age. In fact, it becomes a wasting asset. Since our year is divided into 4 seasons or 4 quarters, think of your inventory in terms of that maximum 90-day window. Keep it moving through time by changing up displays, moving sale items to the back, offering special promotions, discounting or making charitable donations.
Dimension 2 Space
Price each item to maximize your overall sales per square foot or linear foot. This is strictly a mathematical equation. To find your Sales Per Square Foot (SPSF), divide total net sales by your total square feet of selling space. Another rule of thumb is to allocate space on the basis of sales of particular items. If an item represents 20% of your store’s sales, then 20% of your store’s space is allocated to that item. Consignment and resale shops need to know what to accept and what to refuse. Your space becomes cluttered when you accept too much. The shop is difficult to navigate and customers become overwhelmed. Too much inventory equals lost sales. An empty store gives the impression you’re going out of business. Find that middle ground.
Dimension 3 Knowledge
Ultimately, the best inventory management is knowing and having exactly what your customers are looking for. Don’t take a “journey into a wondrous land of imagination.” Find out what your shopper’s love. In a recent conversation, a member of our Team spoke with a woman who was frustrated with her customers. She shared how people are always coming in wanting to buy her display furniture. They weren’t buying her clothing. The team member said, “Well, put a price tag on the furniture and sell it to them! For all you know, your niche could be furniture, not clothing.” Everything in your shop should be for sale. Gain information from your customers with short online surveys and offer incentives for answering them. Try fun contests or Wish Lists to gain insight into their likes and wants. Communicate.
If you enjoyed this article, you might also enjoy 15 ways to donate consignment items and declutter.
