6 Tips To Drive Inventory Turnover
6 Tips to Drive Inventory Turnover
Posted by Ted Hurlbut on Tue, Jun 19, 2012 @ 10:29 PM
Driving inventory turnover is one of the hallmarks of the very best independent retailers. In almost every case, an independent retailer that turns their inventory quickly will outperform a competitor that turns their inventory more slowly.
Why is this? An inventory that’s turning quickly typically is lean and focused, with exceptional assortments, a continuous flow of new merchandise, and compelling presentations. All of that leads to customers who visit often, buy with an acute sense of urgency, and pay full retails.
So what can you do to drive your inventory turnover? Here are 6 ideas that you can apply to your business: 1. Buy more frequently. When you buy less frequently – by front-loading your deliveries into the beginning of a season, for example – you extend out the time between when the merchandise arrives and when you expect to sell it. That gap results in slower turning inventory, The merchandise, and the store it’s in, tends to get stale as a result. If you are like most independent retailers, you are in the fashion business of one kind or another. You’re not selling commodities.
If your best customers are in every four weeks or so, and you have merchandise an average of three months before you sell it, that’s at least two times those customers will see it before they purchase it, if they purchase it at all. Each time they come in and don’t buy it, the perceived value in their minds goes down. Which is why they won’t buy it until it’s on a markdown rack.
2. Buy in smaller quantities. When you buy larger quantities of an item, customers instinctively sense that they don’t have to make an immediate decision when they see something they like.
They can go shopping somewhere else for a couple of hours and always come back. It’ll be there.
Or they can always come back next week or next month. It’ll be there. When they see less depth, they instinctively understand that
Posted by Ted Hurlbut on Tue, Jun 19, 2012 @ 10:29 PM
Driving inventory turnover is one of the hallmarks of the very best independent retailers. In almost every case, an independent retailer that turns their inventory quickly will outperform a competitor that turns their inventory more slowly.
Why is this? An inventory that’s turning quickly typically is lean and focused, with exceptional assortments, a continuous flow of new merchandise, and compelling presentations. All of that leads to customers who visit often, buy with an acute sense of urgency, and pay full retails.
So what can you do to drive your inventory turnover? Here are 6 ideas that you can apply to your business: 1. Buy more frequently. When you buy less frequently – by front-loading your deliveries into the beginning of a season, for example – you extend out the time between when the merchandise arrives and when you expect to sell it. That gap results in slower turning inventory, The merchandise, and the store it’s in, tends to get stale as a result. If you are like most independent retailers, you are in the fashion business of one kind or another. You’re not selling commodities.
If your best customers are in every four weeks or so, and you have merchandise an average of three months before you sell it, that’s at least two times those customers will see it before they purchase it, if they purchase it at all. Each time they come in and don’t buy it, the perceived value in their minds goes down. Which is why they won’t buy it until it’s on a markdown rack.
2. Buy in smaller quantities. When you buy larger quantities of an item, customers instinctively sense that they don’t have to make an immediate decision when they see something they like.
They can go shopping somewhere else for a couple of hours and always come back. It’ll be there.
Or they can always come back next week or next month. It’ll be there. When they see less depth, they instinctively understand that