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Doing Your Market Homework
Productive things to do after attending a market
Whew! Take a deep breath and relax. Kick off your shoes and allow your mind to decompress. It has been a very busy five days in New York for the Toy Fair, and now you have returned home to your business. The addition of the Specialty Source did make your work easier. After all, finding some 300 manufacturers in the Javits Center with product lines primarily geared for your type of business was tremendously helpful and did help to cut down on your travels. But the Toy Fair overall can be overwhelming to take in for the average retailer.
If you are like most retailers, as you get back to work there is a bigger than life stack of mail, phone messages, notes from employees, and other concerns, each wanting your immediate attention. And while you will have to sort through all of this, you have brought home with you stacks of catalogs, information sheets, as well as pages of notes that you took as you wandered the aisles. Until you take these stacks of paper and put them into use, the Toy Fair will be nothing more than an expense on your wallet, your time, and your personal well being. But the business owner that is able to pull the necessary information from all of this material, and put it to use, will be the business that has made a wise investment and will be stronger in the coming months because of it.
How do you do this? It is not easy, but this outline provided in Specialty Retailer magazine will help you stay on task and focused. Begin this task by setting aside a certain number of hours each day for the next two weeks to address it.
For you, it may be time that you can be off the sales floor while your employees take care of customers, while for others it may mean that you will be getting up earlier or staying up later each night to get the job done. If you made notes before the show of the various manufacturers and items you wanted to see, pull this information from the piles and place it to the side in a separate folder.
Secondly, if you wrote orders while at Toy Fair, pull this information from the piles. Attach to each order the catalog from the vendor so that you will easily remember what you have ordered. This is a good time to fully extend the information on these orders, establish your retail prices and total the order at cost and retail. You should also begin a ledger where you are noting the manufacturer, shipping date, total cost, total retail, and payment terms. Keeping track of this information will help you determine if your cash flow will be sufficient as payment for the merchandise comes due.
The third step will be easily accomplished by the business that has utilized a computer. Many retail businesses track their sales by departments (boys toys, girls toys, infant toys, etc) and fine lines as shown by this example for the boy's toys (educational computer programs, wooden toys, outdoor toys). Looking at these reports, or going on feeling for those without a computer, you should examine which departments and finelines have shown positive trends such as increased sales and improved margins.
These should be the signs of where your business is going and perhaps a sign of where you should concentrate your inventory purchases. Again go through the stack of information that you brought home from the Toy Fair and collect all of the catalogs and notes that fit into this category.
The fourth category that we will want to examine and gather is those items you have sold and have purchased through a local wholesaler instead of through the manufacturer. Most all of the manufacturers have minimum order levels, and perhaps with these items you have sufficient buying power to buy directly from the manufacturer and improve your margin.
Having found and created these four stacks, there is probably room for two more; the first being the items you saw at the show that you think are going to be the next great item that every child wants to own. The stack of information and catalogs left should be down to a minimum now. All of this material should be used to create your sixth stack - one that you will look at last.
This would be an excellent time to take a break from the paper work and look to enlist some help. Perhaps you met someone at the Toy Fair that has a store similar to yours in another part of the country. Or, there may be a friend that you always go to the Toy Fair with. Have a conversation with this person and ask what they have done with the information since they got home. Did they write any orders they did not plan on writing? Have they cancelled any of the orders they had written? Do they have any information they would share with you that would make yours a better store? And of course, do you have any similar information you would share with them?
With all of this information, you should be ready to write your orders, or adjust those orders you left with manufacturers at the Toy Fair. Taking each of the six folders, you can begin to write your orders, making sure to enter the necessary information on your ledger of dollars spent and due dates of these orders.
This is an appropriate moment to make a few suggestions, taken from the experience of several retailers, in regards to writing purchase orders.
In the event of a special price or special terms given at the show, be sure to write the terms, as well as the name of the salesman, on the order. This comes in very handy in case of a dispute with the invoice. If you have a manufacturer with whom you have an outstanding problem, such as unpaid co-op advertising claims or invoice errors, a phone call before the merchandise is shipped can do much towards getting a resolution.
written all of your orders, be sure to create a cash flow chart to make
sure your business will be able to not only afford these purchases,
but that the timing of the invoice due dates will correspond with your
anticipated cash flow. You will also need to plan where to display the
merchandise as it arrives. Having a game plan for your sales floor indicates
to your customers and your employees that you are a true professional
As the inventory arrives, start a ledger for the Toy Fair. Note the placement of your inventory on the sales floor, and the dates on which you sell out of items. If you take the time to visit other stores to see how they are displaying similar items and their prices, you may not only find great display ideas but opportunities to increase your margins.
All of these components tie together to help you obtain several objectives: the need to call manufacturers to reorder items, the creation of your financial sheets showing an increase in your sales and margins, and the need to have a larger budget for the Toy Fair
This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 1577, St. Petersburg, Fl. 33731. Phone 727-464-2182. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.
Profits Plus Solutions, Inc.