Wednesday, March 23, 2011

A few percentage points here, a few points there....

To continue the theme of the other day's wonky post.

I used to not worry about a few extra percentage points in margin, or having a few extra days to pay, or getting slightly improved shipping costs.

I was on a steep curve of growth, and then decline, and then growth, and it was mostly about how high my sales were. Higher sales would compensate for lower margins, and higher sales would be facilitated by never running out, always having extra, and getting a constant flow no matter how much it cost.

I was always short of the Prime Evergreen material -- so my cash flow was constantly challenged by my just trying to get that stuff in, full wholesale or not.

Finally getting out of debt and then moving immediately into a growth boom (circa 2002 - 2008) allowed me to start building my inventory, so that immediate need to get material started to fade a little.

In other words, my store matured.

Once the store matured, I started being a little more savvy about percentage points, and shipping costs, and billing periods.

I was also able to stand back and start waiting opportunistically for "sales." These sales didn't happen as often in the old days; and they only happened with a couple of product lines -- cards and comics, so the frequency wasn't there.

Now? If I wait, I'll be offered a deal every week (often every day) in one of my categories -- new books one week, toys the next, graphic novels the next, and so on.

I grab at almost every one of these sales -- sometimes saving 5%, or 20%, and sometimes much more.

Even if it isn't EXACTLY what I was looking for, as long as it's viable product, those 5% -- 10%- 25% -- extra percentage points start to add up.

So do the extra few weeks to sell stuff before I have to pay -- longer billing periods, which means ordering more at the beginning of each cycle.

So do the shipping costs; either saving by buying the minimums for free shipping, or being savvy about how much to order at a time. (For instance, I've figured out if I order about 350.00 (wholesale) direct ship from Diamond comics, I get charged for one box, or about 40.00 postage, but if I order more, I pay for at least 2 boxes, or about 60.00 to 80.00 in postage.)

It all adds up.

Which is why it's been frustrating for me not to get the extra 3% from DC comics I want, and which would match the rest of my discounts. They raised their plateau just enough that I can't QUITE reach it.

Oh, if I order heavily on Vertigo graphic novels, probably my best-selling graphic novel line, and stock up extras for a few months, I can sometimes barely get to within spitting distance.

Oh, well.

The advantages and disadvantages constantly change. I have to constantly measure whether its more important to order exactly what I want even at full cost, and pay the extra shipping to get it in faster. Or...order stuff that's not quite top of the line for higher discounts, and wait for it to show up and avoid the shipping. And so on.

For a long period of time, I was paying an extra every week to buy my reorders on two days ships. Why? Because I basically got an extra week to two weeks of billing period (time to pay). Then the postage went up so severely, that it didn't seem worth it anymore.

Now, with the Diamond warehouse being back east, I can get an extra 3 to 4 weeks billing period, which has once again paid for the privilege of paying extra to ship it in two days.

Which, of course, makes it even more important that I keep trying to save on percentage points and shipping everywhere else.

Anyway, I got the huge order in yesterday -- and the true test of whether I overordered -- I fit it all in. It was close though.

1 comment:

Anonymous said...

The most likely outcome of where Obama is taking us.