Many times we add a product or line because the staff or a person on staff loves the product and will sell TONS of it. Of course it doesn’t sell and you are stuck with the product. Be careful adding any products that don=t fit in your mix and are championed by one or two employees. Set goals with them and eliminate the products if the staff doesn’t do the job of selling TONS of the stuff!
CAN YOU RETURN IT? You never know until you ask. And if you ask firmly, and structure your request as a win/win proposition, most vendors will be reluctant to respond with a flat out "No." What do you have that your vendor might find valuable in return for its help? Your next purchase order perhaps. A test order on that new item or program your vendor has been after you to try. Maybe an increased share of your business.
Open the dialogue, show your vendor the professional inventory you're sitting on, it might have outlets that it can sell it to. Make clear that your request is a one-time thing, not a new standard operating procedure. Maybe the best your vendor can do is offer mark down money, or an additional discount off your next purchase order. At a minimum, that would help with cash flow.
SEGMENT YOUR DEAD RETAIL AND PROFESSIONAL INVENTORY. It is critical to recognize that dead retail and professional inventory is made up of merchandise with dramatically different characteristics and market value. I recommend breaking your dead professional inventory into three categories, which I call (for no other reason than I think these are very descriptive terms) low hanging fruit, sludge, and everything else. Now you can deal with each area of inventory!
LOW HANGING FRUIT. This is the most desirable retail and professional inventory, the most marketable, and the easiest to sell and turn into cash quickly. It's the quick win.
Start here. Break out a size, or item, feature it on a sales table, sign it $ALE, price it to move now at 40% off (and no commissions!), and get your cash. When that item sells through, break out the next style or item. If you've been struggling with tight cash flow, this is like a tall cool drink on a hot summer day. Most importantly, if you feel like you've been losing the battle, it's nice to get a win and feel like you're finally
making progress. Note:put the sales table in a place where client have to trip over it to check in or cash out!
Call MIKAL for details on how to use your Inventory Sales, Ranking, and Turns reports to figure out the items that need to be dealt with as sludge, low hanging fruit, and everything else. Call us at 513-528-5100.