Make Profits Through Buying
I read an article today in Gourmet Retailer that suggests that although consumer spending was strong during the first half of 2007, it may start to lag. Consumer debt, high gas prices, rising costs for food and other staples have resulted in a shift in consumer attitudes about buying.
Predictions are that consumers will continue to shop. But, they have been trained to wait for sales! “Consumers are bunching their shopping around times of big clearance sales, hurting retailers’ profit margins and making the underlying sales trends unclear.” Full Story
Given these circumstances, it may be a good time to start thinking creatively about how you might entice customers to shop early for the holidays. Offering early bird discounts is one technique I’ve seen many companies use. But this too, cuts into profit margins. So the question becomes: how can you offer a sale, but still control your profits?
This is a time when your skill and creativity in buying and marketing may provide answers. Your vendors offer sales every month. Is there some way to use those sales to your advantage?
For example, at Apex Gift Foods this month, you can buy organza ribbon at just $1.99 per roll. During the holiday season, many of your customers buy ribbons from mass merchandisers for their own holiday gift wrapping. Why not give your customers a free roll of ribbon with every holiday gift basket they order before October 1st? They might pay $5 per roll for this at the mass merchandiser, but they get if from you for free! (And it only costs you $1.99.) In contrast, giving a 10% discount on a $50 basket at the end of the holiday season costs you $5.
Take this a little further. You could also give a class in bow making! Schedule this class at the beginning of October before it gets too busy. This would bring customers into your shop and possibly facilitate more sales!
Sometimes, we have to make our profits when we buy for our companies, not sell. Look for sales that make sense for your business. Don’t just buy merchandise because it’s on sale. Decide first how you can fit that merchandise into your inventory and your marketing program.
1 comment July 26th, 2007
