Wednesday, March 9, 2011

The Utility of Extra

Time was, I would only order something for the store if I was pretty darn sure I could sell it.

Time was, I would only order in quantities that I was pretty darn sure I could sell.

Time was, I felt an item needed to have effective display space; that I didn't want it lost in the shuffle, at least on first arrival.

Time was, if an item had to be stored in the basement because it didn't sell and was getting shopworn, and was taking up space -- I considered it a failure.

Nowadays, I don't sweat it. It doesn't bother me to file a product and see it disappear into a wall of merchandise.

I don't demand absolute certainty that an item will sell.

I don't order so much on the basis of how much will sell, as price and availability.

I don't try to guess the customer's mind so much as fill the store with product I think is pretty good stuff, and maybe unique, and something that no one else is selling.

Extra -- sad to say for the landfills of America -- works.

Nowadays, I buy on an overall budget. If I'm doing a good job, selling enough, and getting a good enough margin, this budget might actually be more than I actually need to just satisfy current demand.

This is a huge, huge luxury, let me tell you, and is only possible because I already have an excess of product. The more I have, the more I sell. I throw ten items that might sell at you, instead of one or two items that I'm pretty sure will sell (which are among the ten items, by the way.)

I mean, I still use my experience and judgment and instincts to know what kind of extra I should buy, but I'm not afraid of the idea of 'extra.'

I think its basically impossible to measure the synergy of product -- the gauge the effect of one product on another. To actually accept not selling one thing, because that one thing might help sell three of another.

That said, I prefer small quantities of each item -- often, just one if I can get it. So by extra, I'm really talking about diversity. But...if I can get a good deal by buying caseloads, I'll do that too. I'm still kind of wrapping my brain around that.

This is one of those thought pieces where I'm just trying to figure something out, and not sure I'm making sense.

I just know that if you get enough 'extra' you tend to sell enough to get by; the long tail at work.

I had an interesting experience over the last two months.

In January, I decided to spend pretty much the entire 'extra' budget of the first two quarters;
that is, the portion of the budget that is beyond the basic ordering.

So I more or less ordered six months worth of games and books.

Sales did not go up.

In February, I didn't make any reorders, except to take advantage of "sale" product.

Sales did not go down.

The store is deep enough and wide enough, that sales have pretty much stabilized. Which in a way, has always been my goal. I don't miss the surges -- just like I don't miss the precipitous drops.

1 comment:

Duncan McGeary said...

What happens when you do this long enough, is you discover what really does sell.

Let's say, for sake of argument, you need to sell 100 items a day. Well, you could try to sell the 100 best-selling items according to some list, or you could carry a 1000 items, discover which 100 are worth carrying and reorder those.

Then order another 1000 items, discover which 100 sell, and reorder those.

Repeat as necessary. (It's always necessary....)

You have to find a way to get those 1000 items, and afford them within a budget, which means being on the constant look out for deals. (This has gotten easier over the years, because there is a huge surplus of product out there.)

If you are in business long enough, and you're paying attention, you eventually can assemble a product mix where you have a core of stuff that you know from experience sells.