"If you want to get the best out of a person you must look for the best that is in them."

-- Bernard Haldane

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.

Jami Petersen
newsletters@a-z.com

Wooky Entertainment

Target New Consumers:

Teenagers with the Paris Hilton Creativity Collection. This new line is for teens from 10 years old and older who are interested by scrapbooking. Following the latest trends and fashion, the Paris Hilton Creativity Collection is adapted for teen girls of 2010!

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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.
 

The Hunt for Optimal Printing Begins and Ends with Epson’s “Experience the Excellence $50,000 Scavenger Hunt”. Epson America launched a Web site sweepstakes – “Experience the Excellence $50,000 Scavenger Hunt” – designed to infuse fun and familiarity with Epson printers, inks and specialty papers through an interactive experience on the new Designed for Excellence Web site (www.epson.com/excellence). On the new site, visitors can immediately enter to win prizes and have a chance to win a grand prize of $50,000 in cash.

Cord Camera thinking smaller under new owners. "The venerable Columbus camera and photo finishing retail chain emerged last fall from years of financial struggles, including a four-month receivership, with new owners and a new direction. The road to recovery isn’t complete, but the merchant’s new leadership finally considers the future may be bright after all."

New Introductions from WallPops Provide the Ultimate Combination of Fashion and Function. The all-new line of Dry Erase products not only helps keep students and professionals in order, but offers a fast and inexpensive way to decorate and personalize a room. Whether used in offices, both traditional and home, or in bedrooms of students - WallPops provide design solutions for all with a removable and repositional element for when tastes change or it's time to move.

The Memory Tradeshow

The Memory Tradeshow is the premiere market for scrapbooking and related products, family history and digital imaging.

It is the most important gathering of this industry regionally, and it’s attracting executives from all sectors: manufacturers, retailers, distributors, suppliers, sales reps, designers and press. The show’s goal is to provide the highest ROI show within the industry with a greater focus on the business of the memory industry, education and best business practices.

Learn more and save >>

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.

iLoveToCreate™, a Duncan Enterprises Company, announces the establishment of a new position: Senior Vice President and Chief Creative Officer. This follows by one year the decision to change the company’s name to better reflect their commitment to creative enthusiasts.

“The Chief Creative Officer will have responsibility for keeping us in close touch with crafters, ceramists, and other creative consumers who use our product categories,” said Larry Duncan, President and CEO of iLoveToCreate™. “This new position reflects the importance of offering creative inspiration to our consumers and working closely with our customers to ensure our mutual success”.

Valerie Marderosian has been named to this position and will continue reporting to Mark Peters, Chief Operating Officer of iLoveToCreate™. “Valerie has always kept our company in close touch with the creative markets,” said Peters. “In this new position, she will develop leading edge products and services to support our customers and end-consumers’ success. Valerie was previously the Vice President of Sales and Marketing for iLoveToCreate™ and although that scope of responsibility remains, she will transition some of her responsibilities to others as she turns her attention to the new position.
“I look forward to sharing new ideas across the entire creative landscape,” said Marderosian. “Making it easier to experience creativity and the joy of personal accomplishment is what we do, whether we’re talking to relative newcomers or to experienced crafters and ceramic artists.”

This announcement follows a long history of industry innovation. In the last 60+ years, iLoveToCreate™ (until recently, known as Duncan Enterprises) has fostered industry growth with leading edge products and education for ceramic enthusiasts under the Duncan® brand, and a comprehensive fashion art program under the Tulip®, Scribbles® and Puffy brand names. They also produce Aleene’s®, the most recognized and trusted name in crafting adhesives, and recently introduced the Crafty Chica® brand, developed to celebrate Hispanic culture through creativity. Today, iLoveToCreate™ is one of the largest ceramic arts, fashion art and crafting adhesives manufacturers in the world with a strong reputation for excellence in product development, quality, consumer education and health & safety.

About iLoveToCreate™, a Duncan Enterprises Company
iLoveToCreate™, a Duncan Enterprises Company, is a privately-held, family-owned Fresno, California based company that has been a leader in the ceramic arts and crafts industries since 1946. As a manufacturing, marketing, sourcing and distribution organization, iLoveToCreate™ maintains a solid reputation for excellence in product development, quality, education and health & safety. Not one to rest on its reputation, iLoveToCreate™ always strives to explore new avenues of creativity for its core brands, Duncan® Ceramic Arts, Tulip® Fashion Art, Aleene's® Crafting Adhesives, Crafty Chica™, ilovetocreate.com™ and OA™ Object Art.