 What should you do when another scrapbooking retailer fails within your marketplace? The answers may surprise you.
First, don’t be happy. It’s not a victory but a failure for the whole industry. Why do I say that? Well, if it were just one retailer going out of business it would be one thing; but over the past few years thousands of retailers have failed. Those failures affect consumer confidence in the overall category. So, when one retailer fails we all fail, and that is the problem.
These failures don’t even help the big-box national chains that sell scrapbooking products. Think about the scrapbooking consumer who watches scrapbooking retailers continually fail. What message does that send about our industry? That we are poor businesspeople? That our products are no longer en vogue? Here are five tips to help your store succeed when a nearby retailer fails:
1. Contact the owner of the store that’s going out of business and see if you can buy their remaining inventory at 10 to 20 cents on the dollar.
2. Take the older merchandise and blow it out at 50% off list as a special purchase sale. Fold the more current inventory into your standard merchandise mix.
3. As part of the inventory buyout deal, gain access to the former owner’s consumer home and email addresses.
4. Combine those home and email addresses with your current database and clean up the duplicates.
5. Send out invitations for your most current sales event to the new consumers not found in your database and honor any outstanding coupons or certificates of the failed store. It’s important to take care of the local scrapbookers in your market who may have been adversely affected by a fellow retailer who has gone out of business.
It’s important to take care of the local scrapbookers in your
market who may have somehow been damaged by a fellow retailer
who has failed. Like I said earlier, when one of us fails we
have all failed.
Now the real question is, “Now that we have taken care of the
consumer, what do you do to make sure you don’t fail just like
the retailer whose clients you now serve?” Once again, I will
give retailers the ten keys to success.
1. Reduce the number of vendors you do business with to no more
than 50.
2. Make sure your displays feature the power brands you bring
into your store.
3. Increase your turn rate to at least a four time turn, which
means nothing stays in your inventory more than 90 days.
4. Make sure you are spending 5% on advertising and that half of
it is paid by your vendors to assist in your efforts to sell
their products.
5. Make sure that 80% of your advertising dollars are spent on
finding new consumers and the other 20% is spent on your current
client base.
6. Make sure you have two solid promotions every single month.
7. Team up with other local scrapbooking retailers to promote
the category.
8. Train your staff to know your vendors, know the products and
know your consumers.
9. Understand why scrapbookers scrapbook. Really understand it
deeply and make sure your staff understands it. Then make sure
your store reflects it.
10. Know how much volume you have to do monthly to ensure that
you make 15% pre-tax profits and work hard to achieve it every
month with the support of your staff.
If you can really do those ten things and do them well you will
have a great business. It will be a business that is growing and
a business that is profitable. Over time instead of paying your
inventory with credit cards you will be offered terms by your
vendors who will look at you as a solid partner and a good
retailer. 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. |
