I recently delivered a seminar for independent retailers at Spring Fair 2018. The session was not about identifying the products your customers want to buy, but having identified what it is you want to sell - it was about how to manage your stock effectively. Good stock management will help you to grow your sales and maximise your profit - and over the coming weeks I'll be sharing some of these insights here on my blog...
If you've been to any of the season's Trade Fairs, you'll no doubt be excited by the prospect of the new stock you've sourced. But clearing old stock is just as important an activity - and can present a great opportunity to excite your customers and generate sales.
Depending on the products you sell and who your customers are, your SALE strategy will vary.
One of the categories I work with is greetings cards; they are design led and relatively inexpensive so if you don’t like the design yo u are unlikely to buy it. A 50% reduction of £1.25 is unlikely to make a difference. If you sell higher priced products like ceramics a 50% discount of say £50 might encourage you to buy it.
So decide what works best: a BIG SALE for a short period of time with large discounts or a discreet display at the back of the shop with a small selection of marked down products available all year that you top up as lines sell. We keep a small display of cards on SALE all the time for customers to rummage through.
So what should you do with the old stock?
What is left over from Christmas, New Years, Valentines Day or any other seasonal event you've promoted recently and what are you going to do with it?
- Take it all off the shopfloor (if you haven't done so already!), and store it in your stockroom in one place so you can find it easily... hopefully there isn’t too much!
- Identify what is in good enough condition and relevant enough to keep until next Christmas/Valentines etc.
- List them and the quantity, box them up carefully so they won’t damage. Put the list on the box so you know what is in it. Later you will be valuing the cost and retail price of this stock so you don’t overspend next Christmas.
What is good enough to reduce to clear at some point?
- List the items and the quantity, box them up carefully so they won’t get damaged and put the list on the box so you know what is in it.
- Later you will be valuing the cost and retail price of this stock so you know the value of the product you are marking down (and how much you can reduce it by before you don’t cover what it cost you to buy, plus the VAT you will have to hand over to HMRC)!
What is in poor condition and/or has no future sales life?
- List the items and the quantity, box up anything salvageable carefully so they won’t damage and put the list on the box so you know what is in it.
- Later you will be valuing the cost and retail price so you know what value of stock you are going to write off.
I recommend doing a stock sweep up after every seasonal event ends. The number of times you'll have to do this each year will depend on the market you trade in: for me in cards and gifts my stock sweeps include Christmas, Valentines, Mother’s Day, Easter, Father’s Day, Summer and Halloween. Next time I'll be sharing my top tips for preparing your stock and your shop for these events...