Page 75 - enLIGHTenment Magazine - September 2016

On the Mark

inventory turn sheets or — as my dad would do — performance. Once a piece has been classi ed as
walk through the warehouse and look for the boxes a slow-mover in the “Good” category, it is time to

with the most dust on them. Either way, the result start being aggressive in marketing it before dis-
is the same; those slow movers should stand out.
counting. The “Good” classi cation of slow-movers

The length of time an item is held in inventory contains items people still want and, with special
directly relates to its net pro tability. An important a ention, can be converted quickly into revenue.

piece of information in your quest for inventory Such special a ention may include merchandising

control is the “Sell Through Rate” (STR), which will the group to a be er position in the store’s display.
vary from category to category. Chandeliers sell This strategy provides amazingly powerful results. I

at a di erent rate than sconces, and sconces sell have witnessed cases in which salespeople — and
di erently than seasonal items such as landscape their customers — found new excitement by re-

lighting or table lamps. Those are the parameters introducing them. In this scenario, items will sell

that must be set, so please be realistic when set- without further discounting. Of course, adding
ting them. Base an STR o similar categories as a signage and promoting the items to make it “fresh”

baseline to start.
again is the key. Remind salespeople that these
For example, you begin the month with 8 sconces pieces are still cool designs that just happened to

and sell 4 – that is a 50-percent sell through rate. have had a slow start.

which is pre y good. If the sell through rate was
zero or even 10 percent, that item should be put on
Gordon Gecko, played by the actor
a watch list. If the STR minimums were not met in
a set period of time, the style would be designated
Michael Douglas in the movie Wall Street
for markdown. If the STR was over 70 percent, I

would think about increasing the stock levels.
said, “Don’t get emotional about stock,
Sell Through = Item Sales / Stock on Hand at
it clouds your judgment.” While he was
Beginning of Month

referring to the stock market, it is also a
BegIn WIth the enD

With that mindset, the way you control your inven- true statement for retail business.
tory starts the very day that you purchase it. Your

showroom didn’t get lled with dead inventory
overnight. It happens in the same way that we put

on a few extra pounds. It isn’t the one ice cream

cone or the one funky chandelier that causes the
problem, it is indulging too much and too o en.

When buying for your showroom, you must have
a plan. A plan to buy, a plan for the placement of

the pieces in a display, and a plan for the items that

don’t sell.
One sure way to create dead stock is to over-

display similar items. While one of those will be the
clear winner, the others will fall short. It is critical

to know your stock well. That way you are not du-

plicating looks, eating up precious square footage,
and creating a category of xtures called “also rans.”

all stoCK Is not the same

The merchandise you have identi ed as dead can

be broken down to three levels of value: let’s call
them the Good, the Bad, and the Ugly.

THE GOOD — The moment a xture is hung on
display is the moment you must start evaluating its

SepteMber 2016 | enLIGHTenment Magazine 73