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Category: Inventory Management

I’m Looking For Work

Since closing up Toy House last December I have been writing, speaking, coaching, sailing, selling, and singing for my supper. It has been an interesting adjustment from the steady paycheck of selling toys. It has been filled with highs and lows and stimulating conversations when people ask me how I’m enjoying “retirement.” I’m a few decades away from that word. I need to work.

The past few days I have thrown my hat into the ring for some full-time job openings in southern Michigan.

Yes, I am looking for work. 

This is me. Always smiling. Always ready to help.

Here is my resume: (Please excuse my bragging—that’s what resumes are for, right?)

27 years as a Team Builder: Developed, Organized and Led Team Building Activities utilizing Low and High Ropes Courses, Wilderness & Experiential Activities, and designated tasks to promote better communication, cooperation and trust for groups ranging from adolescents to corporate America. Led and Facilitated Training Programs to teach others to be Team Builders. Wrote and published blogs and articles on Team Building.

24 years as a Purchasing Agent: Created and Managed Open-to-Buy programs for multi-million dollar retail store. Negotiated Terms with Vendors. Made Purchasing Decisions for millions of dollars of inventory. Designed Merchandising Displays including Revamping 16,000 square feet of display space. Led Workshops, Seminars and Webinars on Inventory Management, Pricing, and Financials,

22 years as a Marketing & Advertising Director: Developed and Managed Advertising Budgets between $20,000 and $120,000 annually. Made Advertising Purchases and Created Content for TV, Radio, Newsprint, Billboard, Direct Mail, Email, Facebook, In-Store Signage, Business Flyers, and Press Releases. Conceived, Organized and Hosted several public and private Marketing Events. Made Public Appearances at Networking Events, on Radio, and TV. Built websites for www.ToyHouseOnline.com and www.PhilsForum.com (among others). Led Workshops, Seminars and Webinars on Advertising, Marketing and Public Relations. Wrote book on Advertising called Most Ads Suck (But Yours Won’t).

21 years as an HR Director: Hired, Trained, Scheduled and Managed a team of 12 to 30 employees. Created an Employment Manual and Training Program. Planned, Organized and Led monthly Staff Trainings and Meetings. Led Workshops, Seminars and Webinars on Hiring & Training and Customer Service. Wrote and Published a Book on Hiring and Training called Hiring and the Potter’s Wheel: Turning Your Staff Into a Work of Art. 

27 years as a Speaker/Teacher: I have given over 100 seminars to other businesses, led over 100 training workshops for staff development, facilitated over 100 team building events, conducted over 100 presentations on shopping to customers, and taught over 100 classes for new, expectant fathers at our local hospital.

9 years as a Writer: I have written four books, dozens of magazine articles, hundreds of different advertising content, and 788 blog posts (counting this one.)

I am looking for work.

You can hire me to do Private Coaching, one-on-one, in the area you need the most help. (For a lot of people that has been hiring and training.)

You can hire me to do Presentations and Workshops. My Customer Service presentation takes a unique approach by helping you define each point of contact a customer has with your business and measures your performance at every step along the way. Like my Hiring & Training presentation, this works with any type or size of business. In fact, it was a manufacturer who paid me the highest compliment telling me I had given him the “million-dollar idea” he needed to take his business to the next level (as he flew away on his private jet.)

You can hire me to help you revamp your Marketing & Advertising. Whether temporary as a coach/consultant and/or to help you create new content, or full-time as a Manager or Director, I will bring insights and skills that will move the needle for your business.

You can hire me to Write. My specialty in writing is to teach and persuade. I’m sure you can figure out how to use that in your business.

I’m not a perfect candidate. Most people look at my resume and get hung up on the fact I have Bachelor of Science in Geological Oceanography from the University of Michigan. That was 28 years ago. I barely remember that child (but I still know more about shoreline erosion than anyone really needs to know.)

Or they want to discount the above experiences because I didn’t do it in corporate America. I can see that. Of course, I did all those jobs simultaneously (plus twelve years as CEO and CFO) for a store that in 2009 was named “One of the 25 best independent stores in America!” in the book Retail Superstars by George Whalin. That’s not corporate America, but it does speak to my ability to learn and my ability to stay organized and focused while juggling a lot of responsibilities in a fast-paced environment.

I’d be happy to discuss these and any other reservations during the interview.

I am looking for work. Do you know anyone who can use a guy like me?

-Phil Wrzesinski
www.PhilsForum.com

PS I apologize if this post sounds too much like bragging. I really do need more work. I want you to know I’m not just a blogger who thinks he knows something about business. I have walked the walk. I have made many mistakes and learned from them. I don’t have the business degree, but I did have the toughest teacher ever—real life! You get the exam first and then you get the lesson. Please share this post with anyone you know who could use a guy like me.

PPS You know my Core Values are Having Fun, Helping Others, Education and Nostalgia. My ideal job is teaching and helping others. It is what I do best and I enjoy it thoroughly. My second passion is marketing & advertising, finding new ways to drive traffic. That and Free Cell are my two favorite puzzles to solve. If the right opportunity comes along, however, I’m game for just about anything that lines up with my values.

The Scary Truth of Averages

“Have you ever noticed that everyone wants to be normal but no one wants to be average?” -Roy H. Williams

Did you hear the one about the statistician that drowned in a river with an average depth of three feet?

Image result for averagesIn business, everyone wants to know the averages, the average cost of rent, the average sales per square foot, the average level of inventory, etc. Averages are interesting. They can be a nice benchmark, but they can also be misleading, and sometimes downright dangerous.

Take, for example, average inventory at cost (a number you should all be tracking). If you were an average toy store doing around $500,000 a year in sales, your average inventory at cost would be around $100,000. But if you are that same toy store, your Thanksgiving to Christmas sales will likely be around $200,000, or pretty much all of your inventory if you only had the average on hand. As nice as it would be to sell to the walls, so-to-speak, you know you can’t sell it all. You also know you need some inventory in January for birthdays and post-Christmas.

Just trying to keep your store at the average will kill your holiday sales. You’ll need a lot higher inventory to start the busy season and much lower inventory the rest of the year. Rarely will you ever have the “average” amount of inventory on hand.

Another problem with that average is that $100,000 worth of toys looks a whole lot different in a 2,200 square foot store than it does in a 1,100 square foot store.

The bigger the store, the more creative you may need to be with your merchandise to keep the store looking stocked and full. The smaller the store, the more creative you may need to be with your merchandise to fit it all in. Sometimes your store space dictates your inventory levels more than just sales or industry averages.

Averages are a nice starting point, but it is worth exploring all the reasons you might deviate from the average, and be okay with those reasons.

For instance, my payroll at Toy House was a significantly higher percentage of our expenses than the average toy store. But I could afford that because my rent was significantly lower. Our sales per square foot was extremely low compared to the average, but that was because we had wide aisles to allow for shopping carts, four cash registers lines, a large gift-wrapping area, and a stage with seating/playing area—in other words, a lot of square footage not used for showing merchandise. Our average ticket, thanks to shopping carts and toy demos however, was significantly higher. Each deviation from the norm was on purpose and with a purpose.

I do many talks about the financials of independent retailers. Whenever possible I try to use an average store for that industry. But I remind everyone in attendance that these numbers are average and they should be striving to be spectacular. If all your numbers are average, you haven’t found the place to stand out and make a name for yourself.

In retail, there isn’t a prize for being normal.

-Phil Wrzesinski
www.PhilsForum.com

PS The upside to averages is that they give you a quick check of the health of your business. If you have a number way off from the averages and you don’t know why, that might be a good place to focus your time and energies on changing. The downside is that you don’t ever want to be an average store. You are destined for greater than that.

PPS Rent per square foot and sales per square foot go hand in hand. You need to be selling at least 10x more per square foot than what you pay in rent (if your profit margin is around 50%). That’s a far better benchmark than average rent or average sales per square foot for your industry. Those averages tell you nothing.

Give Them What They Want

Tonight I’m doing a repeat performance of last week’s Campfire Sing-Along at The Poison Frog Brewery. Last week I brought songbooks with the lyrics to forty-three songs from the likes of John Denver, The Eagles, Dobie Gray, Indigo Girls, Peter, Paul & Mary, The Beatles, Garth Brooks, and more. The evening went like this … Pick a song you want to sing and I’ll play it while we all sing it. Seemed simple enough, right?

June 23, 2017 behind The Poison Frog Brewery

Immediately people started asking for songs not on the list. They weren’t bad requests. I love Otis Redding’s “(Sittin’ On) The Dock of the Bay”. But they weren’t songs on the list or in the songbook with all the words. Still, people asked.

You know me. I’m all about making the customer happy. I’ve added a few of those requested songs to the list for tonight. I’ve added a few more songs as well.

What does that have to do with retail?

Every single retailer in America thinks they have a great selection of products just as much as I thought I had a great selection of songs. But there are products your customers come in asking for by name that you don’t have. There could be a good reason why you don’t have those products. Maybe you can’t get them. Maybe you don’t like the profit margins. Maybe you consider those products inferior to what you carry.

Keep in mind, however, if a customer stops in and asks if you have something, that means the customer thought of you as a place that would sell that product.

If your customers are constantly asking for certain items, maybe you need to reconsider carrying them. Or at the very least have a far better answer than either, “No,” or “We can’t get them.” If you keep saying, “No,” they will stop coming in and asking.

If it is something you either can’t get or simply don’t want to get because there is a better alternative, you could say, “No we don’t but can I show you something similar (better)?”

If it something you don’t carry and have never really thought about carrying, you could reply, “No we don’t. I’ll have to look into carrying that. Thanks for the suggestion.”

If a customer is asking, the customer thinks of you as a place that would have it. Wouldn’t it be great if you could say, “Yes we do,” more often than, “No we don’t,”?

-Phil Wrzesinski
www.PhilsForum.com

PS My stock reply to requests not in the songbook is simply, “I’ll have to learn that for next time.” Usually I’m looking it up the very next day. If they think I can play it, I don’t want to disappoint them. Any time you can avoid saying “No” is a good time.

Adjusting the Sails

I learned how to sail at YMCA Storer Camps. I knew how to canoe and kayak (I even did an eskimo roll in a kayak on the New River – bucket list!) I knew how to use a paddle to get just about anywhere, but I had never learned to harness the wind.

That’s me in 1986 on the UM Sailing Team at a regatta at Notre Dame

Sailing looked easy enough. You just let the wind do all the work.

Andy, my instructor, taught me otherwise.

The wind is a fickle thing, always changing speeds and directions. A smart sailor has to constantly scan the water looking for those gusts of wind that might change your tactics.

Sailing may not be as muscle-bound as paddling, but it is just as much work. You are always trimming the sails and adjusting your course. It may look like a leisurely way to get across the lake, but the good skipper is working the tiller and main sheet all the time, making course corrections as the wind changes.

This Sunday I am going to be teaching Retail Math to a bunch of toy store owners. For many, this will be their first real instruction on the accounting side of running a retail operation.

Most people dread math. But reading reports is a lot like reading the wind. Reports can tell you where the gusts are happening. Reports can tell you if you’ve adjusted your sails properly. Reports can tell you if you’re heading in the right direction.

Many retailers think a Profit & Loss Statement (also known as Income Statement) and Balance Sheet are simply for the accountant to figure your taxes at the end of the year. They are much more powerful tools than that. They can tell you when your inventory is too high (or low). They can tell you when your expenses are out of line. They can tell you when it is time to raise your prices. They can tell you when you can pay yourself more money.

At the very least, you should be studying these documents once a month and making course corrections. If you aren’t already reading and understanding these reports, start running these two reports monthly. Learn how to read them. Then as the years go by, start comparing the current month to that month in the previous year. The more I read the wind, the better I get at predicting its next move. The more you read and know your reports, the better you will be at adjusting your business profitably.

Wind speeds (traffic in your store) change. Wind directions (fads, hot products) shift constantly. When your boat is on an even keel (inventory well-balanced) and your sails are trimmed properly (expenses in line), you will be sailing at your fastest (most profitable).

Scan the water (reports) and your business will sail much more smoothly.

-Phil Wrzesinski
www.PhilsForum.com

PS There are many metaphors for sailing. One of my favorites is … The pessimist curses the wind. The optimist hopes it will change. The realist adjusts the sails. You can’t adjust your sails, however, if you don’t know what the wind is doing. Check out the link above to learn how to read those reports and use them to your advantage. The math happens whether you know how to do it or not.

Words of Wisdom From 1969

Here is another gem I found buried in a file, long forgotten. My grandfather and founder of Toy House, Mayor Philip H. Conley, penned these words in June 1969, two months before hiring my dad as his new manager.

I don’t know if this was penned to put his thoughts on paper for my dad, or if it was just something that struck him one day. I do not know if it was ever read again after that day (the file I found it in was pretty darned old). I don’t even know what one of the terms means (neither did my mom or dad). He refers to “marking capacity” and “markers”. I believe those were people who put price tags on boxes like my sister and I did as young children. He also refers to “jobbers”. I know that term. Those were the wholesalers or distributors of that day. I do know there are some nuggets in there that ring so true I’m calling them universal.

Here is his June 1969 manifesto in its entirety…

Business is a matter of balance.

Good business – successful business can be achieved as good government can be achieved using a system of checks and balances.

Balance as it applies to our business, there must be a balance between the number of customers, parking, inventory, shopping carts, sales people, stock people, marking capacity, office capacity, square feet selling space, square feet of stock space, store hours, checkout capacity, and giftwrap capacity. An excess of any of these factors creates too much expense for an efficient operation. A deficiency of a factor immediately creates an excess of all other factors – this is very bad for a profitable operation. Management’s responsibility is to maintain balance.

Enough free off street parking is an obvious example. Enough shopping carts is not so obvious. If people have to wait for a cart, then their parking space becomes non-productive , floor space, sales persons, inventory, etc. all become non-productive. Very wasteful, very expensive. We must realize that the customer may be on a time limit, therefore his waiting time must be subtracted from his shopping time. And, too, waiting is most aggravating and will result in a bad attitude for the customer.

Without customers, there is no business. If a customer is not satisfied after he is in the store, there is no sense in advertising to get him in the store.

Any time a customer is not satisfied with merchandise purchased in our store, he may return it for a credit, refund, or exchange. This matter should be handled more quickly than the original purchase.

Inventory balance is most difficult for us to achieve.

Excessive inventory is wasteful as it requires too many markers, too many receivers, too much work capital, too many sales people, too much stock space, and too many markdowns. If not balanced, this is the greatest cause of business failure.

An accounts receivable policy should be set up and adhered to with all being treated alike.

Inventory turns is the number of times your total inventory is sold per year. If you subscribe to the theory that you need only a 90-day inventory, then you should turn your inventory four times a year. Food stores may turn their inventory 40 or 50 times a year. Specialty stores turn theirs considerably less. This is the nature of the business. “If you can’t find it somewhere else, go to the specialty store and pay their higher price.”

Buying direct, although at a better discount, tends to create overstock conditions. In just buying dollars alone, your better price reflects at the most an 18% savings. However, your first markdown is usually 50%. I have not referred back to the other excessive expense factors. Buying direct, except under strict control, is dangerous.

In business the obvious is not always true!!! Example: “You’re nuts to buy from a jobber when you can get from us for less.”

Jobbers have been hurting for the past several years because so many operated on buying at the best price and selling at the lowest price hoping to move mountains (and doing so) of goods. (At a profit????)

So jobbers have been financially weak which is reflected in many ways.

  1. They do not carry a complete selection.
  2. The services of a competent salesman are not available.
  3. Their plant facilities do not allow for an efficient handling of vast quantities of goods.

Historically, three or four jobbers could not supply our needs. Their selections were never broad enough. We many times were forced to go direct to satisfy our needs for a “spread” of goods as well as supplying the needs of our customers, i.e. Monopoly money, Carrom refills.

Direct suppliers and jobbers giver preferential treatment usually to the largest customers. But not necessarily sometimes to the most regular – frequent – steady – GOOD PAY buyer. Over the years loyalty is pretty much a thing of the past.

No one seems to assess the market today. In years gone by, it was wise to spend time assessing how much could be sold profitably in the market and then budgeting the business accordingly. No one ever realized how large this nation’s ability to consume really was.

Business is a matter of keeping all relevant factors (and there are untold, unseen ones) in balance.

-Philip H. Conley

-Phil Wrzesinski
www.PhilsForum.com

PS The more things change, the more they stay the same. This June I’m going to be speaking to the toy industry about how to keep things like inventory and cash flow in balance. If you would like me to speak to your industry, I have some insights that go way back.

Our Version of the 1%

Lately everyone has been talking about the 1%. In politics that might be the ultra-rich. You either are them, hate them, or on your way to becoming them.

In retail the 1% I want to talk about is your unsaleable merchandise.

We ended our closing with only 1% of our inventory remaining. Yeah, pretty good when you consider during our closing we sold 17% of our merchandise at full price, most of the rest at 20% off, and only went to 40% off those last few days when the inventory got below 10%.

Here are two lessons you can take from this.

NO BUYER IS PERFECT

No matter how well you think you have your finger on the pulse of your customers, you will make some buying mistakes. That’s a freeing thought. You know you won’t be perfect so don’t try to  be perfect. Take a few risks. Try some new things. Some will work, some will not. 1% you won’t be able to give away. That’s not the end of the world.

You might have jumped in on a fad too late (or even too early). You might have gotten seriously undercut by a rogue retailer online or a vendor dumping the remaining stock through a discounter. You might have simply liked a product more than your customers did. It happens to even the best buyers. There will always be inventory that just won’t move at regular price, and there will be inventory that just won’t move at all.  In fact, make it a game every year to figure out what your 1% will be. Have your staff vote right before the busy season on what they think are the flops. Offer a gas card or local restaurant gift card to the winner.

DON’T SIT ON OLD INVENTORY

Knowing you will make mistakes, you have to have a system in place to recognize the slow movers early on so that you can get them moving out the door. The game is actually a fun way to engage your staff as they will be checking to see if their choice is “winning”. One interesting effect of this is that your staff, by paying attention to those perceived flops, will actually help you sell that merchandise.

Your point of sale system is your best set of eyes. Any POS system worth the money you spent will at the very least tell you what items are old and not moving. Be cold and ruthless with that inventory. Don’t invest any emotion. The sooner you recognize bad merchandise, the sooner you can turn it into cash and move on.

When you have to sell off everything you own like I just did, you see the stark reality of your buying decisions. Fortunately, since we had a process for recognizing bad merchandise and moving it out each and every year, we weren’t stuck with a lot of product at the end of our day – only 1%. I can live with that.

-Phil Wrzesinski
www.PhilsForum.com

PS Remember all those free displays your vendors gave you that you’re no longer using? You can sell those, too, and make up the money you lost on your 1%. In fact, a fixture/display sale is a good combination to have when you’re moving out the mistakes. It takes some of the sting away (and gives you back some room in your warehouse). Manage your inventory and cash flow and you could be part of that group on their way to becoming a 1%er.

Newly Redesigned PhilsForum.com Website

I told you I was working on a new version of my PhilsForum.com website.

It just went live a few minutes ago.

Everything is up and running except this blog (which should be migrated over by late Thursday).

In an effort to make it more search engine friendly, some of the pages you’re used to seeing have new names.

  • Freebies is now Free Resources and still includes links to free pdf’s you can download on a variety of topics
  • Speaker for Hire is now Hire Me to Speak and focuses on the top programs I am most often hired to do
  • Products is now Phil’s Books and focuses on my two books, Hiring and the Potter’s Wheel and Welcome to the Club Daddy
  • Media is now About Phil and yes, it is about me

You’ll also find a few fun things hidden here and there on the site including a page of radio ads I have run for Toy House and Baby Too.

Check it out and let me know if there are any issues with the site (tell me what browser/platform/device you’re using, please).

Every time an independent retailer grows, we all grow.

-Phil Wrzesinski
www.PhilsForum.com

PS Supposedly all email subscribers will be migrated over, but I will be looking into it directly. You may get an email from me asking you to resubscribe to the new blog site. Just giving you a heads up.

The Chasm Between Early Adopters and Early Majority

Back in 1962, Everett Rogers introduced us to the Diffusion of Innovations that shows how people enter the market for any given idea, product or service. There are five groups of people who look at new ideas and products distinctively different. The percentages shown are consistent across the board in study after study. Here is a quick definition of these groups through the prism of the smart phone industry.

Innovators: They don’t find what they want on the market so they make it. They didn’t get what they wanted from the new iPhone 5S so they hacked into the programming and made their own apps and programs.

Early Adopters: They want the newest, latest, most unique. They loved the iPhone 5S, couldn’t wait to get their hands on it. Yet, there they were standing in line one year later for the iPhone 6+ because it was newer and more unique.

Early Majority: They want the new, too… but only after it has been proven to work. They prefer tried and true over new and unique. They bought the iPhone 5S, but three to six months after it launched and have proven itself. They’ll get an iPhone 6 eventually, but probably not until it is time to upgrade.

Late Majority: Unlike the Early Majority, these people are waiting until it feels like everyone has one. They will only buy the iPhone 5S because they found a great deal on it, and figured they might as well join the crowd.

Laggards: They aren’t buying a smart phone. They don’t need one. Oh, they might get one, but only after all other options are completely gone. They will buy the iPhone 5S when they have no other choice.

WHAT THIS MEANS FOR MARKETING

The chasm you see in the chart is the monumental mind-shift that takes place between the Early Adopters (EA) and the Early Majority (EM).  The EA want their product now. They want “new and unique” and don’t care how much it costs. They’ll pay full retail to get it first. To them, the words “tried and true” are the kiss of death. The EM’s, however, live for the words “tried and true”. They want the proven item, the easily available item, the commodity.

If you try to market to the EA’s, you will completely turn off the EM’s. Words like new, innovative and unique are scary to the EM’s. If you try to market to the EM’s, you will completely turn off the EA’s who don’t care about tried and true.  In other words, you have to choose which of these two groups to market, then make sure your message and your offerings are tailored to that group. If you try to reach both, you’ll reach neither.

If you try to market to the Late Majority (LM) or Laggards, you’re just a fool. The LM’s only want the commodity at a discount. The Laggards don’t want it at all and only buy it as a means of last resort at the cheapest price.

You can look at the five groups like this…

  • The Innovators push the development of the product forward. 
  • The Early Adopters buy that new product as soon as it is available. 
  • The Early Majority buys the commodity version of that product. 
  • The Late Majority buys the discounted commodity version of that product. 
  • The Laggard only buys the discounted commodity version and only when forced to buy it.

The profit margin, therefore, is in selling to the EA’s. The volume is in selling to the EM’s. Everyone else is a race to the bottom that you can’t  (don’t want to) win. The choice is yours, but it is definitely a choice you have to make. Otherwise you will be stuck in the chasm between the two with ineffective marketing to both of them.

-Phil Wrzesinski
www.PhilsForum.com

PS One other thought I have been having on this topic… My toy and baby customers turn over so fast that even the tried and true product to me can often feel new and innovative and unique to a brand new mom-to-be. In other words, if you have a fast-changing market, don’t throw out the tried-and-true products just yet. They may be new and unique to your new base.

Launching a New Website – The Jackson Retail Success Academy

Back in February 2008, the newly hired director of The Enterprise Group, Scott Fleming, invited all the alphabet groups in town to a meeting to discuss how we were supporting existing retailers in Jackson.

The DDA, SCMW, SBTDC, JLF, EDC, JCCC and MA were all there. I was there. Everyone but Scott himself who got called away at the last minute.

The question of the day was, “What is your agency doing to help indie retailers survive and stay in business?”

After seven people said, “Absolutely nothing,” an idea was born – the Jackson Retail Success Academy (JRSA). Less than two months later we launched our first series of classes.

I was the only retailer sitting at that table that morning, so I was asked to come up with a curriculum (a healthy dose of customer service, marketing & advertising, inventory management, financials, and hiring & training). Ten businesses signed up for that inaugural class.

Over the next several years, we tweaked the class schedule to make it work better for the attendees. We had start-ups attend. We had new owners taking over old businesses attend. We had non-retail businesses who wanted the customer service, marketing and hiring segments attend. We had business coaches who wanted to learn new techniques for teaching attend. We had restaurants, online retailers, and home-based retailers attend.

The cool thing is that JRSA is still around and still getting better. The class schedule is shorter (from an original 10-week program down to 5 weeks now), but the content is better, tighter, and more focused.

A retailer who takes this class will have amazing tools they can use to fix almost any kind of retail problem.

Finally, a website with all the details is up.

www.JacksonRetailSuccessAcademy.com

Just like the class, the site is constantly being tweaked and will continue to get better. The retailers in Jackson ready to take their businesses to the next level are already checking it out and signing up for the next class starting in January.

What are you doing to grow your business?

-Phil Wrzesinski
www.PhilsForum.com
www.JacksonRetailSuccessAcademy.com

PS If driving to Jackson five times is out of the question, but you still want to grow, I have a Road Show version of JRSA I can bring to your town. You only need to convince five businesses to sign up and find a place to hold the classes and I’ll do all the rest.

Two Strategies for Independent Retailers

I’m reading a fascinating book called The Man Who Wore Mismatched Socks about an indie brewing company in England fighting against the big corporate brewery who is trying to buy out and destroy all the competition.

Sound familiar?

In the book, the current head of the indie brewery says something profound…

“As you get bigger, you get more average.” -Archibald Gack

How many times have we seen that the biggest company in our industry is really making quite average products? (Put your shoes back on. You don’t need to count them all.)

Contrast that statement with this one said by a customer in an indie retailer.

“They must be the best because you see them everywhere.” -unknown customer

Customer perception is since a product is everywhere it must be the best. The reality is more often than not, the products sold everywhere are really quite average. There is better stuff out there.

This begs two questions…

  1. Do you differentiate yourself by not carrying the most popular item in the category, thus flying in the face of customer perception?
  2. Do you carry the popular items to draw the traffic and then try to upsell to the better items?

Both strategies can work, but they each work with a different crowd.

Use the first if you only want to go after the innovators and early adopters, the people who only want the best. They are a small market, but they pay top dollar to be first or to have the best. You can make a lot of money off of them as long as you stay at the top of the market and as long as you continually advertise your cutting edge expertise.

Use the second if you want to go for the early and late majority. They are a much larger crowd, but they have more options to find what they want. And usually what they want has been commoditized so your margins on the everywhere items will be smaller and your profit will be based on your ability to upsell.

The markets are different for each of these strategies. Know which one you’re in so that you’ll know who you’re trying to attract.

-Phil Wrzesinski
www.PhilsForum.com

PS You can trying being in both categories. Unfortunately, the message usually gets lost in advertising. When you advertise the popular items, you lose the innovator crowd. When you advertise the innovative items, you lose the popular crowd. That’s why it is better to pick one and do it better than anyone else.