Page 76 - enLIGHTenment Magazine - September 2016

On the Mark

Ask yourself this tough question: “Am I a

retailer or a museum?”

If you are aggressive in social media, highlight or a museum?” If you are a longtime merchant, you

these items on posts with a very strong call to ac- know that excess and dead inventory is costing you
tion. Still need help? Try the old tried-and-true way turns and dollars per square foot. The pro t you

of moving an item: Put a spi on it.
lose is not only from the result of the cobwebbed

This Is Not the Time to Take the Best of Your chandelier or sconce, but also the potential gains
Worst and Chop Away Your Margin.
from the new items that must replace them. There

If a new location within the store and increased is also the downside of negative customer percep-
a ention doesn’t get these lights moving, then the tion. Think of your own shopping experiences.

next step is the 60-day countdown. For the next What if you walk into your favorite clothing store

60 days, your e orts will go toward turning these and, as you sort through a collection of great new
items into cash by posting a discount that is greater colors and styles of pants, you discover a polyes-

than your best advertised sale price — but not as ter teal leisure suit. What just happened to your
deep as you will go on the other levels.
perception of this company? Now do you have any

Revisit the progress made at this level of pricing. “leisure suits” hanging in your showroom?

If there has been no action, or you want to turn up
the volume, proceed with an established pa ern of set them Free

price reductions. Set up a system so that at the end A recent conversation with a client reminded me of
of every 60-day timeframe, the price drops until how some lighting stores struggle with dead inven-

you have sold out or the item moves into the “Bad” tory. My client expressed that they sold o some

category.
items for less than they paid for them, causing them
THE BAD — This is a group of products that we to “lose money.” It turns out the piece was bought

all have hanging around. They are the reminders seven years ago and was backed up ve times.
of chic looks from days gone by. They have been That’s less than one piece per year on average.

around so long that the cost of holding these goods There is an old school thought that an item you’ve

has taken all the pro t potential away from them.
had in inventory for two to ve years is worth more
They may have some usability le to them and because costs have increased since then and the

if they do, mark them at ridiculously low prices to item was bought for less. What is not easily rec-
Mark Okun is increase their appeal. If they are way out of style ognized is that any item that hasn’t turned well in

Business Contributor or worn, the best bene t for your business at this your store — no ma er how long you have it — is not

to enLIGHTenment point is to get as much return from these pieces worth the price marked on the ticket.
Magazine and as you can, even if that means that you make them Let go of the past and turn these unwanted

President of Mark part of a tax-deductible donation. Your goal is the goods into free cash or, at the minimum, a tax-
Okun Consulting & reclamation of capital.
deductible donation. As a worst case, scrap them

Performance Group. THE UGLY — The products that make up the out. If you have a repair department that is slow,

He has more than Ugly category are those that are the most tired. they can break down the xtures for parts and
30 years of hands- Maybe the style has long passed or the time on dis- pieces before they are thrown away or (preferably)

on retail experience play has taken its toll. Whenever these shop-worn recycled. The most important thing is to forget how
training and coaching pieces are hanging in your showroom, they take much you paid for the item; it is no longer relevant.

sales associates in the away from the hard work and beauty that you put No ma er what causes slow or dead inventory, it

lighting and furniture into the display. The sad truth is that there may be happens. As retailers in this fast-paced new age, we
industries. li le or no value le in these pieces; they need to must be assertive in the way we handle it, but we

Mark@bravo move out and fast.
cannot be fearful of trying new styles and looks that
businessmedia.com
Ask yourself this tough question: “Am I a retailer
may take us out of our comfort zone.


74 enLIGHTenment Magazine | SepteMber 2016
www.enlightenmentmag.com