“How do we do it? We buy right!” was the advertising slogan of a local appliance store for many years.  And buying is certainly key to the long-term success of any retail store, as good retailers all know.  Having the right merchandise on hand means that your customers will send their momey.  Having merchandise at the right markup means you will make a profit and stay in business.

I had the opportunity to present tips on “purchasing like a pro” at the recent Chicago Market, together with John Talbert, regional sales manager for DEMDACO, and Ward Peterson of Peterson and Associates.  Attendees received a glossary of some of the more common terms relating to ordering, such as drop ship, delayed dating and open to buy. I’d be happy to send you a copy of this list (adapted from my book) if you e-mail me at specialtyshopretail@me.com.

One of the first topics we covered was buying trip preparation.  Having sheets of stickers with your store name, address, phone and fax numbers on them makes order writing just a bit easier. And you’ll want to make sure that you have an adequate number of business cards and credit references with you. Don’t forget a business credit card for first time purchases.

I use a folder system at shows to start with inventories and show specials (green), then credit sheets and stickers (yellow) and finally one for completed purchase orders (red). A fourth folder holds travel information such as hotel reservations, show registration, and invitations to events.  It is really helpful to look through the red folder every evening an put retail prices on the purchase orders while the merchandise is fresh in your mind.

Getting a good deal on the merchandise you buy can allow those retail prices to include more than keystone (50%) markup.  Watch for deals such as closeouts, free freight, show specials and discounts for early payment.  All of these can add to your bottom line and help compensate for eventual markdowns. Because you will have markdowns — you have to keep slow-selling merchandise moving so that you free up dollars for items that will sell better.

How do you know what to buy?  It’s important to have a clear vision of your store’s focus (see last week’s blog), and also an idea of what categories are selling best for you. Bring seasonal records and inventories to the show with you, along with customer special requests. If you use open-to-buy budgeting you’ll know how much you have to spend on different types of merchandise. But even if you don’t use a formal system, take advantage of the OTB concept of having the merchandise ship close to the time you need it. No use tying up inventory dollars in advance.

Look for local vendors and craftspeople (such as Jamie Helman and her Whimspirations) whose story will give you something to talk about in your social media postings.  These items are also not as well-known in the marketplace, which gives you some leeway in markup.  And customers love the idea of locally made products that are unique to your store.

John Talbert and Ward Peterson both pointed out that sales reps can be a great help in deciding what items to order, because they are professionals who not only know your store but also the market.  Take advantage of their expertise to find out what the best sellers are from each vendor.  Don’t be afraid to “cherry pick” a line, which means just ordering the items that you feel will sell well in your shop.

In working with a vendor or a sales representative, keep in mind that your success is their success. Working as a team will help make you a better buyer, and you will both benefit.

Happy Retailing,

Carol “Orange” Schroeder