"Let me tell you the secret that has led me to my goal. My strength lies solely in my tenacity."
-- Louis Pasteur, Chemist and Microbiologist

by Jami Petersen

Independent retailers have a lot on their plates. Turn rates, inventory and overhead are a portion of everyday responsibilities and tracking. They are also an integral part of having a successful business. Dennis Conforto sheds some light on what retailers should expect and how to do the math. He also suggests a few creative ways to rid yourselves of that old inventory that can bog down turn rates.

And join the celebration for National Stamping Month. Plan activities, promotions and prizes to bring consumers in. Get involved in the fun for a retailing home run .

Jami Petersen
newsletters@a-z.com

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.

Crafts chain logs steep loss. A.C. Moore Arts & Crafts Inc. recently reported steep second-quarter losses, as sales at existing stores fell nearly 5 percent. The retailer hopes to recover some sales by producing a line of private-label craft paint and updating its selection of scrapbooking materials. A.C. Moore will continue modest expansion plans, with two store openings slated for later this year.
 

Charity in mind in boy's artwork. 5th grade artist sells collages and donates the money he makes to charity. He creates the collages by hand, using scrapbook supplies, then sells them to people all over the world. This little artist has donated over $600 to aid hurricane relief and build battlefield monuments.

Photobucket Launches Digital Scrapbooking in Collaboration with Scrapblog.
Powerful and Easy-to-Use Scrapbooking Service Offers New Self-Expression and Storytelling Options to Photobucket Users. Photobucket, the leading standalone photo and video-sharing site, recently announced the addition of online scrapbooking, powered by Scrapblog, the leading service for creating and sharing scrapbooks online.

by Dennis Conforto, A-Z Media, Inc.

Question: Dennis you’re always talking about how to get turn rates up, so could you please share with me some rules I should follow to increase my turn rate?

Answer: One thing that really hurts turn rates is to buy more at cost in any given month than what you sell at cost in any given month. Some high-turn operators like having the same turn rate every month; however I think it’s easier for an independent retailer to maintain the same base-line inventory every month. This would mean when you go to a trade show it’s not about buying as much as it is about deciding what you’re going to drop from your inventory and what you’re going to select to replace that which you are going to drop.

It doesn’t make sense to purchase any more than you would in any other given month, just because you're at a trade show. So here is how it works. Let’s just say you have at cost $100k in inventory. Let’s also assume for the month of September your sales are $50k with a gross margin of 50%. This would mean you would have sold at cost $25k; meaning that you would bring in $25k in new fresh inventory to keep the inventory level at $100k. In November let’s say your sales are $70k with a gross margin of 50%. This would mean that you would bring in $35k of new fresh inventory to maintain your inventory level at $100k. This methodology is simple because you know how much to buy based on what you sell.

Of course for this method to work you have to ensure that you start with the right inventory level. Let’s say I did $600k in sales per year with a 50% margin. My cost of goods for the year would be $300k. If I wanted a 4 time turn rate I would divide 4 into $300k which means my inventory level at cost would be $75k or $150k at retail.

If you want to maintain a 4 time turn rate (and you should demand that of yourself) then any inventory older than 90 days is a huge problem. In truth you need to understand that if you don’t move your dead inventory out the door, your dead inventory will move you as the owner out the door, one or the other is going to win and I suggest that you kill dead inventory before it kills you and your business.

For both the retailer and manufacturer it would be better if retailers would purchase less quantity more often rather than greater quantity less often. Many manufacturers get so overloaded with orders at Trade Shows they find it hard to fill the orders on a timely basis. Then about a month after the trade show they reduce the staff size until the next trade show comes again. This trade show cycle is not healthy for manufacturers.

While Wal-Mart or Target have huge overall selections, their selections by category are actually very narrow. This is why they have healthy turn rates. Everyone knows that an independent retailer has more selection. But one must be careful not to have too much selection otherwise you create too much confusion for your consumer.

Scrapbooking stores today have 15 merchandise departments. Each one should have a good selection. A good way to know if you have too much selection within a department is when you have duplication between manufacturers within the same merchandise department. Duplicating the same look and feel between manufacturers kills any chances you might have of turning and moving your inventory. You need to see your store and your inventory selection through the eyes of the newbie consumer… Not through your expert level’s eyes. The future of your store and the future of the industry is in the hands of the newbies, not the experts.

Turning one’s inventory faster is a learned art. It comes with constant practice. It is what being a good retailer is all about and is job number one when it comes to the true measurement of what a great retailer or manufacturer is.

Those who turn their inventory fast are those who are not guessing who their customer is. They live by the numbers because they know that if the numbers get too low it’s the death of their business. When you have a high turn-rate it means you are doing almost everything right. When you have a low one it means you are doing almost everything wrong.

If you want to turn your inventory faster don’t be fearful of marking down losers to clear them out fast. If you are afraid of having a clearance sale and admitting you are not a perfect retailer then call your mistakes “special purchases” and pass the savings on to your customers.

The female consumer loves a good sale. For many scrapbooking retailers the word SALE is a dirty four letter word. In truth, in turning ones inventory is knowing when to have a SALE. Since every retailer in the world is always making buying mistakes they are always having a sale and marking products down to move the mistakes out the door.

If we are going to bring newbies into the marketplace then as an industry we need more exposure and that requires that we have more sales to move the good and bad inventory. That is what being Business SMART 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 celebrating the popular hobby with a number of activities 

Close To My Heart, the stamping and scrapbooking innovator and industry-leading direct sales company, will be celebrating the second annual National Stamping Month this September, and National Stamping Day on September 13, in celebration of the popular hobby.

The company has planned a number of activities for September in honor of the celebration:
• Online contest at www.closetomyheart.com with one prize awarded daily and one grand prize worth over $1,000 (US retail) in Close To My Heart product.
• "Just Because," an exclusive card kit containing materials and instruction to make 16 cards, will be available only during the month of September. The kit includes an exclusive My Acrylix® stamp set, accessories, pre-cut paper, and step-by-step instructions.
• "From Me to You," the card kit offered during last year’s inaugural National Stamping Month, will be available for all Close To My Heart customers for only $10 (U.S. and Canada) and all proceeds will be donated to Operation Smile. Operation Smile makes it possible for children around the world with correctable facial deformities to receive life-changing surgery. This kit also includes a My Acrylix stamp set, accessories, pre-cut paper, and step-by-step instructions to make 16 cards.

In further celebration of the month, the Close To My Heart corporate office will be the title sponsor for the Utah Valley Women’s Expo on September 5 and 6, at the Utah Valley University McKay Events Center. Those in attendance will have the opportunity to create a card while learning a variety of unique stamping techniques at the Close To My Heart booth. They will also have the chance to win valuable stamping and scrapbooking prizes. Meanwhile, thousands of Close To My Heart independent consultants across the U.S. and Canada will host their own unique stamping celebrations in honor of the month.

“Close To My Heart is proud to celebrate National Stamping Month and this fun art that brings friends together as they do paper crafting projects,” said Jeanette R. 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. 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.