I’m preparing and finalising some buying within a few minutes and hoping that the best choices were made. Is it something that needs serious qualifications and training, or just experience and knowing your market, their buying patterns and such? I guess it depends on the scale (buying for Myer as opposed to buying for a tiny boutique shop).
During an economic downturn, people tend to have less to spend and will start looking at cheaper alternatives and/ or dropping luxury goods. Therefore, choice of buying should be based on:
- Following basic buying principles (matches your business product mix, ability to complement across the store, ease of merchandising and branding, etc.)
- Higher affordability for both the consumers and the retailer
- Higher in value (getting more out of their dollar)
- Lower in absolute price terms
Currently looking at one supplier we are buying off with a budget of $3-4000 who stock a very large range of licensed merchandise. My initial plan, which I’ve discussed with my colleagues, is to spread myself out thin across everything they have that we want. But with constant news that the world is just going to collapse any second, the company’s wallet is as tight as ever and it’s time to be a bit more cautious and smarter with what we do. I love to experiment with different products to match and work on our brand (we are young and experimental in all senses of the phrase), but I guess we’ll have to let that go for now.
- Jewelry such as necklaces and keychains
- Models & Figurines
- Plush Toys
After looking over the product range, I’m planning to cut out/ reduce the plush toys and models/ figurines temporarily.
- Shipping advantage: We are a highly mobile company and rely heavily on freighting constantly. Our entire inventory of Jewelry, hats and sweatbands can fit into 1-2 boxes, whilst plush toys will depend on 7-8 boxes. After several trips, the postage saved will seriously add up to a few hundred/ thousand.
- Opportunity revenue lost on plush/ figurines will be made up by other more fast-turnover goods
- The exchange rate is definitely not in our favour.
- Margins are smaller on plush and models / figurines compared to everything. After postage and competitive bargaining, we make as little as $4-5. The same amount can be made from two easy sweatband sales.
- Opportunity merchandising cost: the space required to display the plushes takes up a LOT of room… maybe we can put something else in its place?
- We actually have a lot of unique plush toys/ figurines either on hand or coming from another supplier which support our branding more
- Competitors stock the same stuff anyway; the rest of our portfolio is pretty unique to us.
I hope this move won’t be detrimental. The worse thing is I cannot measure its success.