by T.J. Reid
When deciding whether to purchase off-price merchandise for you independently owned specialty store, think of all the ways you can use these items in your inventory. Look at the big picture and decide is there room or reason for this type of goods in you buying plan.
Wouldn’t it be wonderful if you were low on goods and needed to actually buy more merchandise to have an After-Summer Sale? I know stores that are doing that right now as you read this! They are preparing to markdown and make money at the same time, by carefully selecting off-price apparel and jewelry for at once delivery for those customers who are shopping with the buy-now, wear-now attitude.
Many people are afraid of off-price because they think it can mean irregular, inferior or even damaged goods. This is rarely the case. It is usually over cuts, special made items, or refused merchandise form credit or late delivery problems. Remember manufacturers can make too much of a good thing and they have to get rid of it somewhere.
If you are looking for off-price, it is best to start with your regular vendors to see what they have to offer. Then shop the off-price specialty shows and at-once vendors, network with your friends, and find recommendations form your buying offices and FASHION ADVANTAGE.
How to use off price items:
1. As regular stock.
The only reason to use this merchandise as regular priced goods is to increase your original markup, and build your margins. If the goods are of quality, not out of season, and have a perceived value of what you normally carry in your inventory – then go for it!
2. As a special purchase.
Many times merchants will buy items to present as “Special Purchase.” This means it is offered to customers at a lower price than they would expect because the store owner was able to make a good deal and then passed the savings on to the end-customer. Most stores will still make better than a keystone markup. Otherwise, you are wasting your efforts and advertising dollars to promo regular stock at no additional gain. Special purchase should be “special” for both sides!
3. As sale inventory.
Buyers often go to market or, do research for items that they know will never go into regular inventory. This is called buying for a sale. Perhaps a vendor offers their usual $19.90 pant for reduced price of $12.50. The store buyer will place the order and bring the goods into the store at $42, knowing that immediately a sale is about to begin, and the pants will be priced on sale at 25% off, now $30. This way the store has bought for the sale, and will not lose any money by marking them down 25% and actually, if they sell them all, they will have made more than on the original shipment, purchased earlier in the season, at regular price. (Are you catching on to how this works?)
4. As loss leaders.
A loss leader is an item a store buys and puts out for sale, knowing they will not profit from the sale of the item. A loss leader attracts customers into the store and hopefully a sales associate can convince the shopper to buy other things while there. That is the benefit of a loss leader. It is perhaps a good way to lure new shoppers in to see what else you have to offer or just to introduce your surroundings and your service. Don’t make a habit of loss leaders. You are in retail to make money – not give things away. Loss leaders are a wonderful aide during anniversary sales.
All items should be priced more than keystone (doubled) to assure you make enough money to justify the purchase. The key to getting it right is to consider the following factors when looking at off-price: Is it the right price? Is it the right product? Is it the right quantity of goods? Is it the right time to take this in? Is my store the right place for these goods? Do I have the right person to sell this? Do I have a customer who will want to buy it?
When the answer is YES – go for it! See how easy this “buying thing” is?
(Other buying tips can be found in “What Mother Never Told Ya About Retail” and in FASHION ADVANTAGE each issue.