"It's determination and commitment to an unrelenting pursuit of your goal that will enable you to attain the success you seek."
-- Mario Andretti, Race Car Driver

by Jami Petersen

There is just one week left in 2008. 2009 is almost here and there is still so much to do before the end of the year. Calculating your turn rates should be at the top of your “to do” list. Learn why in this week's Business SMART article, which will also help you outline business goals for 2009 and prepare to attend CHA Winter.

Jami Petersen
newsletters@a-z.com

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Press Releases

News you can use about the latest media coverage of hot trends, noteworthy events and dynamic industry leaders. Learn more about the current headlines in arts and crafts by clicking on the title of each article segment.

Knitting gets a fresh new spin with the younger generation. "Yolanda Hsiao is a junior at Douglass College. But most Tuesday nights, you won't find her crunching numbers; you'll find her knitting, scrapbooking or decorating cookies.Hsiao, 20, is treasurer of the Rutgers University Arts and Crafts Society, which meets weekly to create various handmade objects."

Christmas comes home. "Many shoppers plan to spend more money on handmade gifts this year. According to an online poll conducted for Michaels Stores Inc., a majority of shoppers say they plan to spend more money on homemade gifts, while cutting back in some of the season's most popular categories, including electronics, toys and travel."

Smilebox DVD Maker(TM) Launches for Windows Customers. Burn-to-DVD Scrapbooks, Photo Albums and Slideshows Offer Affordable Gift-Giving Option Just in Time for the Holidays. Just in time for holiday gift giving, Smilebox, Inc. announced today the worldwide availability of Smilebox DVD Maker(TM) as part of the company's popular photo service.

by Dennis A. Conforto, A-Z Media Group, Inc.

For the next few weeks we will be covering the major items that drive profits. At the top of the list of profit drivers is inventory turn. If you look at the companies who turn their inventory the fastest, you will see they tend to be the largest.

A Look at Other Industries
Take, for example, Dell Computers on the manufacturing side. Dell uses just-in-time inventory; as a result, they turned their inventory so fast they could finance their own growth. And grow they did – into the largest PC manufacturer in the world with sales of nearly $50 billion worldwide. There were plenty of manufacturers who were bigger than them when they started, but no one worked the supply chain process like Michael Dell.

On the retail side there was no one like Sam Walton; who started out with a bunch of Ben Franklin stores. He wanted to do two things: turn his inventory faster to drive his cost of doing business down and have the lowest prices. Ben Franklin, for whom Walton was managing some variety stores, said no. Sam Walton turned around and founded Wal-Mart. Wal-Mart is now the largest company on earth. Basing their business on turns, Wal-Mart now has sales approaching 1/3 of $1 trillion, with almost 2 million employees worldwide.

The interesting thing about these two companies is that in their success, they are liked and disliked in equal measure. The consumers reward them with more and more business each year. Their competitors dislike them because they just don’t know how to compete with them. And to compete with them you have to out-turn them just like they did to their competitors many years ago.

A Look at the Scrapbooking Industry
In the scrapbook industry the average retail turn rate is about 2.2 turns per year. No matter how you cut it, at that turn rate, an average scrapbooking retailer can only stay in business 4 years before they run out of capital to run their business. A retailer can have a great store, great employees, and awesome customers, and they can even be growing, but there comes a time when that turn rate catches up to the retailer and wipes them out.

Within the next 18 months about 1,000 independent retailers will fail because they don’t understand how inventory turn rate affects their bottom and top lines. It used to be that every time a retailer failed another one would take its place, but that will not be the case this time. This time about 300 stores will replace the 1,000 that will be lost. And that’s a shame, because it does not have to be this way.

Turning one’s inventory is not the fun side of retailing and manufacturing, it is, nonetheless, the essence of a profitable business. There are 5 reasons why a business that turns their inventory faster is just a healthier and better business at the end of the day.

1. They know what is selling and they keep it in stock; this boosts sales in an ever-upward spiral trend.
2. They know what is not selling and they get rid of it fast; this keeps most of the inventory fresh and new, which the consumer loves.
3. Those who stock the right inventory limit their selection to the best vendors and the best products.
4. Those who turn inventory fast have positive cash flow and real operating profits to show for all their hard work.
5. Those who turn their inventory fast have lower operating cost and can therefore compete with anyone large or small in their market area.

In summary, higher inventory turns mean higher sales, higher margins, higher cash flow, higher profits, lower operating cost and a more loyal consumer. Just ask Dell and Wal-Mart… and that is what SMART business is all about.

If you would like to comment directly to Dennis about this article or have him address a subject matter in future articles feel free to email him directly at dconforto@a-z.com.

PSRO 

Dedicated to those helping consumers preserve treasured memories.

The Professional Scrapbook Retailers Organization™ (PSRO™) bridges together retailers and suppliers for insight into the memories market.

Through educational programs, business services, industry research, networking, and events, PSRO leads its members to discover, understand, and act on new business opportunities.

For more information, or to join PSRO, visit www.psro.org or contact our member service department at 517-788-8100.

CLOSE TO MY HEART INAUGURATES JANUARY AS NATIONAL PAPERCRAFTING MONTH

Close To My Heart, the scrapbooking and stamping innovator and industry-leading direct sales company, has designated January as National Papercrafting Month.

National Papercrafting Month is a celebration that reaches beyond traditional scrapbooking and cardmaking into the wider realm of crafting projects with paper. This might include alternative memory books, storage boxes, ornaments, frames, CD books, calendars, and more—the possibilities are endless.

To kick off the new annual observance, the company is offering a number of activities to celebrate this exciting form of artistic expression, including:

A contest during National Papercrafting Month for the best small, medium, or large papercrafted item using any of Close To My Heart’s paper packets. The winner in each category will receive $300 in Close To My Heart product. Photos of entries should be emailed to CTMHOffice@closetomyheart.com with “National Papercrafting Month Contest” in the subject line. Additional details about the contest will be available at www.closetomyheart.com.

The Key To My Heart My Acrylix® stamp set and paper packet will be available exclusively during the month of January. The stamp set includes grand flourishes, heart shapes, a large key and keyhole, and more, with complementing papers in Close To My Heart’s newest exclusive colors. Customers can purchase the kit for $47.90 ($59.95 CAN). With a $130 purchase ($160 CAN) they can receive the kit for free, or with a $75 purchase ($90 CAN) they can get the kit for $20 ($25 CAN).
“Close To My Heart is proud to launch National Papercrafting Month to celebrate this fine art that often brings friends together,” said Jeanette Lynton, Close To My Heart founder and CEO. “We are also pleased to donate a portion of every sale of our My Acrylix stamp sets to Operation Smile, a charitable organization that funds life-changing surgeries for children with facial deformities. By purchasing My Acrylix stamp sets and enjoying this great hobby, you are helping ensure a better life for children throughout the world.”

Close To My Heart is an industry leader in innovative scrapbooking and stamping products, including the My Acrylix line of clear stamps, My Reflections® scrapbooking kits, and several top-selling how-to programs including the newest volume, Originals Card Confidence Program™. Headquartered in Pleasant Grove, Utah, the company distributes its products at home gatherings through thousands of independent consultants across the U.S. and Canada.