I know, you're tired of seeing, reading, hearing and feeling that the economy is challenging right now. You don' need me to remind you. What I can do is make a few recommendations on how to stay relevant right now:
1. Demonstrate Strength. Especially when working with your retail partners. If a buyer gets even a hint that you might be in financial trouble they will lose confidence. It can also have a dangerous snowball effect if you operate in more than one category at the retailer. Be upbeat, yet not oblivious to what's going on in the economy.
2. Increase your knowledge. Just knowing your weekly sell through by item is not enough. Put a disciplined process in place for analyzing your retail business- and make recommendations based on what you find. Don't be blinded by your own objectives- make sure you understand what your customers problems are and how you can help solve them. If the buyer doesn't give you any indication of how well you're doing against the total department, take matters into your own hands. Visit as many stores as you can and walk the retail floor. Based on the inventory levels, promotional activity and comments from a sales person, can you glean any information into how your items are performing against your competition? Conduct a competitive overview of your buyer's department. You might be surprised to find a hole in the assortment- an opportunity waiting to happen.
3. Know your true cost. Make sure all the hidden and associated overhead costs are apportioned correctly for each of your retail accounts. Does the cost of each item carry the burden of the true overhead? Know which accounts are more profitable than others. We've all learned that diversification is the key when investing- the same is true for who you are selling to.
4. Conduct risk assessment. No less than 30% of our time is spent helping clients reconcile a buyer's request for financial support. In many cases we find that it was never reasonable to think that the negotiated cost of an item would allow the retailer to maintain their requested margin goal. Build a schedule to show the effect sales may have on the margin, and the possible up and downside to a negotiated cost. In season, track actual results to the plan so there will never by any surprises.
5. Execute like never before. It's tying points 1-4 together and keeping your game together no matter what. Many retailers are tired and stretched. Be part of the solution, not the problem.
And remember, we are here to help, be it our software or subscription tools to track and analyze sales and margins, or our consulting or even a just a conversation to bounce around ideas.
Jim Lewis
Founder and CEO
Please keep us informed
We would like to know what issues you face and how we can help. Please click here to send us such an e-mail.
