Turn your inventory into Gold

Our retail tip of the day today focuses on inventory. It is usually the largest expense that any small business has and yet many retailers do not plan a through purchasing process to maximize the usage of dollars associated with inventory. To maximize your inventory turnover and reduce unnecessary expense on inventory, you must have a plan.

There are many options for you to choose from. If you're a long term retailer, perhaps you've got an inventory purchase system that works for you. Wonderful. Make sure you keep updating your system and checking your stores' overall performance against the key industry benchmarks that are available. The systems out there today keep improving overall performance of inventory- and you should be pushing your store to as well.

For those of you who are new to retail, or for those that haven't done any purchase planning to date,  why not think about having a retail professional help you to set up an OTB plan for your business that will deliver proven results. He/She can help you find the best way to maximize your inventory you do have and not spend too much of your hard earned money on wasted inventory! If you find the right person, their professional advice will pay off almost immediately.

Specialists in inventory planning and open to buy management have had years of experience and can understand even the most subtle nuances of your business. They can translate even the slightest trend data and give you sound recommendations on how to maximize the opportunity at the same time cautioning your progress so you don't spend too much. A professionally managed otb can also help to:

Increase Sales - consistently maximize all key inventory contributors  

Drive Profits - minimize inventory investment; increase inventory turnover  

Enhance Overall Product Mark Up - utilize key retail industry benchmarks to improve mark up and gross margin targets

Improve Cash Flow – optimize inventory investment freeing cash flow for debt reduction  

Improve Productivity Of Store Management – shift time spent on inventory management to building long term strategic sales and marketing efforts  

Create A Proactive Emphasis On Inventory – interpret selling data for future purchase planning decesions

Gain Access To An Expert - an experienced, independent and objective perspective resulting in candid recommendations and action plans  

Should you hire a professional for your otb services, some of the following outcomes are possible:

Sales Growth Typical sales improvements are between 2-5% annually – based on a $500,000 business, that’s an additional $ 25,000 in sales in one year!  

Gross Margin And Profit Enhancement Typical gross margin improvement ranges between 0.5% and 1.0% within the first year - based on a $500,000 business this improvement alone would cover the expenses of running the otb program.    

Inventory Investment Reductions Professional OTB management typically leads to inventory reductions of 8% -13% of average stock while simultaneously increasing sales - as the owner of the business, this adds additional money back into your pocket - almost immediately.

Whatever you decide, your own system, or hired professional, make sure you set plans and goals for your inventory performance. Every business can and should continually look to improve it's turnover, sales and profit performance.

Want to talk to a CBCG team member about OTB services?  Contact us today to learn more.

We're one week in to our March Madness Retail Tip of the Day series. Thank you for all the feedback and for your particpation. Keep the comments coming! CBCG wants to give you as many resources as we can to help your retail business prosper. For today's retail tip, we offer a list of additional resources where you can go to look to for answers that can help you and your business. The list is just the tip of the iceberg, but we find the people listed have great insights and they help us to help you even more with their wisdom and knowledge! Enjoy!  

Social Media:

Mari Smith - Facebook Guru/Expert who can simplify even the toughest new editions to the program

Chris Brogran - Author of Trust Agents, great writer on the how's/why's of Social Media

Marketing/PR:

Duct Tape Marketing - John Jantsch has lots of insights and information to help any size business

Seth Godin - Author of the Purple Cow. Thought leader on marketing and consumers

Helpareporter.com 3x daily newsletter where writers are looking for subject matter experts to comment for their articles. Want to get your store in the press more often? Sign up today for this great newsletter.

Retail Industry Websites/Blogs:

CBCG Retail Report (we certainly think this one is helpful, it's ours!)

National Retail Federation (NRF) - free daily newsletter gives you quick pulse of broad range of retail industry

MarketingProfs - Subscription based service that has numerous articles/white papers/seminars across every subject area

TopRank Online Marketing Blog- written by Lee Odden This one is all about blogs. From every angle. All the time.

I could go on and on, but I think you get the point. There are a variety of resources at your disposal to help you with your retail business! We're all here to assist you as you grow your sales and profits!

Is Your Retail Business Social?

1. Social Media is great for businesses of all size. Using social media, small and medium-sized businesses can create marketing campaigns that are able reach large numbers of potential customers but at a fraction of the cost. However, Social Media is not a silver bullet. It must be integrated into an overall marketing campaign and deliver a message that supports the brand and that is focused on achieving a business goal. Note: The costs in dollars for social media may be low, but the cost incurred may be a steep one. Its time. You (or your employees) must be willing to commit the time to social media to achieve the results you desire.

2.Listen and you shall hear. Using social media is a great way to listen and communicate what your prospects and customers are saying about your business. Listening to the online chatter for your brand is critical at all times. Not only can you hear good news and nice things being said in real time to share with other prospects or customers, but you can also deal with potential unsatisfied customers in as timely a manner that can go a long way putting out a fire before it becomes an inferno. 3. Social media can dramatically influence buying decisions. In the past, customers looked for product feedback from trusted friends and influencers. Today, consumers take to the internet seeking online opinions – and as we mentioned earlier – many times from people they have actually never come face to face with. But don’t be fooled, the recommendations of “strangers” can have as dramatic affect on purchasing decisions as a referral from their own brother or neighbor.

4. The More the Merrier. Through social media, businesses can reach a significantly larger pool of potential customers. And while many companies might not be able to increase their physical space, they can afford to increase their online “space” to reach new markets and thus new customers all the time.

5. Social Media creates effective WOM (Word of Mouth) strategies– As we know from traditional marketing approaches, satisfied customers are more than happy to give referrals for a job well done or products they love. Creating a process which uses social media to spread word of mouth referrals for your business can deliver your referral efforts both farther and faster (upwards of 1000 fold more people!) than your current traditional WOM campaigns. That alone is worth the time and effort for your business to use social media!

Need more reasons to use social media for business? Email me directly. I've got to convince you about this powerful marketing tool that can and will help your business grow.

March Marketing Madness Starts NOW...

Today is March 1. It's the start to March Marketing Madness. Every day this month, you'll get tips on all things retail that can help your business grow. Some quick lessons (as in less than 140 characters worth on Twitter) or some longer posts on topics that need more attention for your business.

Make sure to join the CBCG Fan Page or follow us on Twitter as that's where the tips will come. We'll also be offering long tips and articles on our CBCG Retail Report blog so check back often. Let's have fun with the tips and most of all, we hope you learn some tips and tactics that you can use for your retail business.

And don't forget to let us know how we're doing- and what you want to see. We'll add as much content as we can to help you and your business.

So here we go.. The Tuesday Retail Tip of the day is:

Review store selling every week. Determine best sellers to re-order and slow movers that must be liquidated on a regular basis so that your inventory is fresh at all time. As inventory is the biggest expense many retailers have, you must take the time to review what is working and what isn't on a weekly basis so you can make adjustments going forward. Slow moving inventory is one of the largest challenges small businesses have. It hurts cash flow as you've already paid for the merchandise, yet it is sitting on the shelves unsold. By creating a strategy to liquidate these slow sellers, you can free up cash to bring in more of what you have identified as a best seller and to try some new items that your customers might like better. Run a selling report today and see what it says! You might be surprised.