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The Heart Opens the Wallet

You bought your first car because you fell in love with it. You bought your first house because you fell in love with it. You married your spouse because you loved that person. Every major purchase in your life was ultimately decided by your heart. Facts and data play a role, but the heart opens the wallet.

So why do we fill our advertising with tons of facts and data?

Probably because you were told the best way to make the sale is to hammer home all the features and benefits. Yeah, I read that book, too. Yet features and benefits are for people in an analyzing mode. As long as they stay in analyzing mode, they won’t ever make the purchase. You want them in a buying mode. You have to speak to the heart to get them beyond analysis.

Maya Angelou said it best, “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

Your job as a salesperson is to get people to feel good about the product. Your job as an advertiser is to get people to feel good about a company. Your job as a small business person is to make people feel good. Period. Break it down like that and it simplifies your job.

I ran this ad as my sole radio ad for the 2005 Christmas season …

“He left Detroit 9am Christmas Eve. Some store somewhere had to have the one item his sweet little six-year-old wanted. Six cities, seven stores later he stood travel-weary across the counter from me. ‘I suppose you don’t have any Simon games either.’ As I handed over the last of my Simon games, he smiled and said, ‘God bless you!’ Believe me, He already has. Merry Christmas from the Toy House in downtown Jackson. We’re here to make you smile.”

It was a feel-good ad. It didn’t talk about our many services. It didn’t talk about our huge selection (heck, the Simon game wasn’t even on the market that season.) It didn’t give our extended holiday hours or our address, phone or website. It didn’t even mention the store until the very end.

But it worked.

We ran that ad in 2005 and had the busiest Christmas season ever! We ran it again in 2007 and surpassed 2005 by a wide margin.

Why did that ad work so well? It spoke to the heart. It made you feel good. It hit on four of the six principles in my new book Most Ads Suck (But Yours Won’t).

  1. Don’t look or sound like any other ad
  2. Tell a Story
  3. Speak to the Heart
  4. Speak to Your Tribe

You don’t hear radio ads like that. The opening line of most ads turns you off. The opening line here gets your interest. The story draws you in. The ending makes you feel good. The ad was also about Nostalgia, one of my Core Values. It spoke directly to the people who share my values-people who also are nostalgic. Did people remember the ad? Oh yes! Not the details, just the feelings. Just like Maya Angelou said they would.

-Phil Wrzesinski
www.PhilsForum.com

PS You can pre-order the book MOST ADS SUCK by clicking the link. You can even get me to write a couple ads for your business (check out the perks for supporting the campaign.) Just ask yourself if your “best Christmas season ever” is worth the investment.

PPS That ad is based on a true story that happened to me back in 1980. It was one hour from closing time when this man approached my counter displaying all the hand-held electronic games. Only one minute earlier my mom had laid a Simon game at my feet from a canceled layaway and said, “See if you can sell this before we close.” Talk about timing! Besides saying, “God bless you!” over and over and over, this large, travel-weary gentleman hugged me right across the counter. Tears were flowing for both of us as he shared his story. I’ll never forget that man or that story (a story that hasn’t been embellished once in the last 37 years because it doesn’t need it.) You have a similar story that, once you tell it, that story will get people to fall in love with you all over again.

This Book Will Change Lives

Click-bait, right? Not at all. My new book, Most Ads Suck, will change lives for the better. Here’s how …

Before we go further, if you accept the premise that most ads do in fact suck, then you will accept the premise that most independent business owners will have sucky ads. You good with that?

First, most indie business owners have no training for creating killer content.

Second, they have no budget for buying a big ad agency with a top-notch creative team.

Third, they are usually at the whim of an advertising sales person who also has no training in creating killer content. At best he or she has a clever team that can create a clever version of the same template they are running for every other client.

Just imagine what happens if one indie business owner gets a hold of this book and learns how to tell stories that speak to the heart of his tribe*. Just imagine what happens if one indie business owner starts creating content that gets noticed and remembered. Just imagine what happens if one indie business owner grows her business into a powerhouse.

That’s food on the table for his family. That’s better pay for her employees (indie businesses are notorious for paying more than big chains). That’s more taxes for his community (indie businesses are notorious for being stuck paying higher taxes than chains). That’s more support for other indie businesses.

Multiply that x 1000 (the number of books available in the first print run) and your pre-order of this book will change lives. I call it Trickle Up Economics.

You aren’t donating to me when you go to Indiegogo.com – you get a book, a t-shirt, a webinar, even a couple of ads written for you in return for your support. The support you give to this campaign is support to every indie business owner out there currently at the mercy of untrained creative teams from untrained advertising salespeople. You are helping launch a resource that will change their lives (and yours) forever.

-Phil Wrzesinski
www.PhilsForum.com

PS *Telling Stories, Speaking to the Heart and Speaking to Your Tribe are three of the six principles outlined and explained in the book. Since all boats rise with the tide, when you help me help them, you help me help you (which helps them and you, too.) Please support this campaign.

The Power of Storytelling

“Phil, the Marshall Community still talks about your presentation on advertising.” That’s the message I received late last night from Scott Fleming, the head of Marshall Area Economic Development Authority. Scott hired me to do the presentation based on my new book Most Ads Suck. I did the presentation a week ago and he is still receiving positive feedback. He’s going to help me promote this presentation to other groups like his.

Phil presenting for Marshall Area Economic Development Authority

One of my favorite parts about doing this presentation is the stories I get to tell. I told the story of a jeweler in rural Washington. I told the story of a couple of my trips to Wizard Academy. I told the story of the copywriter and the frying pans. I told the story of how I made Sheila cry on her birthday (Shelia and I laughed about that story last night at a high school band concert her daughter and my son were in.) I told the story of my first Christmas Eve working at Toy House at the age of fourteen and how I should have known then that I was destined to make people happy. I told the story of my boys plummeting to certain death in the fastest, ugliest sled ever created. I told the story of how customers used to approach me at the grocery store to ask what was going on in the men’s bathroom at Toy House.

Not only do stories make presentations more powerful and memorable, stories do the same for your advertising and your business. In fact, one of the six principles outlined in my book and on stage is Tell a Story. Stories fire up the brain differently than simple facts and figures.

Here is what other people are saying about stories …

Jonathan Gottschall, author of The Storytelling Animal: How Stories Make Us Human, published by Houghton Mifflin Harcourt tells you, “Stories powerfully hook and hold human attention because, at a brain level, whatever is happening in a story is happening to us and not just them.” (10-16-2013, www.fastcocreate.com)

Rachel Gillett says, “When we read a story, not only do the language parts of our brains light up, but any other part of the brain that we would use if we were actually experiencing what we’re reading about becomes activated as well.” (6-4-2014 www.fastcompany.com)

Pamela B. Rutledge, Ph.D., M.B.A. writing for Positively Media, “Stories are how we are wired. Stores take place in the imagination. To the human brain, imagined experiences are processed the same as real experiences. Stories create genuine emotions, presence (the sense of being somewhere), and behavioral responses.” (1-16-2011 www.psychologytoday.com)

Catrinel Bartolomeu says, “Unlike statistics, stories trigger emotions—actual physical and chemical changes in our body.” (11-10-16 www.contently.com)

Yes, stories change you physically and chemically. Stories happen in your brain as if you were in the story yourself. Stories are more powerful than data.

Start telling stories in your advertising and you will start seeing a different, better result.

-Phil Wrzesinski
www.PhilsForum.com

PS Please help me get this book printed. Go to the Indiegogo Campaign and make a donation today. Not only will you get an autographed copy of the book, if you make a large enough donation you can get a live webinar, or even a half-day workshop at your place for you and your fellow business owners.

PPS Here is the meta of all metas. One of the companies featured in the Samples chapter of the book is a company that tells your story for you in the form of a magazine for you to use to advertise your business. In other words, a story about telling stories for advertising features advertising stories about a company that writes stories for advertising. That will make your head spin!

Help Get This Book Launched!

Back on April 3, 2015 I wrote a blog about an idea that had been swimming around my brain for my next book. It was going to be about how to write more creative and interesting advertising copy. I was already presenting on the topic. My Making Your Ads More Effective presentation was a smashing success. It was time to put the ideas together.

I asked for companies to submit their information to me to use for writing samples of ad copy for them. Several companies sent me their info. Unfortunately, my life got a little crazy and I never got around to writing that book.

I am glad I waited.

On March 1st this year I finally started putting words together. New ideas were flowing. New revelations were popping up left and right. I started out with the four rules I had been teaching in my presentation. Then I realized “rules” wasn’t the right word. I know you. If I tell you there is a rule, you’re the first person to try to break it. So now I call them principles. (You’ll still try to break them. Now you just won’t feel so bad about it, or good, for that matter.)

As I wrote, I realized there were six principles, not four. Six principles and two revelations. The biggest of those revelations is that Most Ads Suck.

You know what I mean. We spend one day a year watching ads – that first Sunday in February when the Super Bowl is played. The other 364 days of the year we do what we can to avoid ads. Hulu and Netflix? Check. DVR set to record? Check. Satellite Radio? Check. Aux cord for Spotify? Check. Digital Ad Blocker? Check.

One day a year the ads are palpable. One day a year the ads are worth watching. One day a year we tune in. The rest of the time we tune out.

As all good books do, this one took on a life of its own. I needed a guide to get through these two revelations and six principles. I found the perfect guide. You. The book starts with You at a Super Bowl Party. From a simple revelation at the party, you go on to teach the world how to create better, more memorable, more compelling, more effective advertising. You teach the world how to write content that isn’t boring. You bring to light the principles that show how small businesses like yours don’t need fancy Madison Avenue ad agencies to grow your brand.

The book is written. It is in the editing stage. Next comes layout and design, cover design (the picture above is a temporary representation), formatting for print and digital, and printing. Those things cost money. I need your help to cover those expenses, plus some marketing expenses. I launched an Indiegogo Campaign for the book yesterday. It goes until the end of May. Please follow the link, make a donation, and share this with your fellow business owners, your local economic development professionals, your chamber director, your DDA director, your local ad salespeople, and anyone you know who is or works with small businesses.

I’ll be posting excerpts of the book over the next few weeks. Please help by making a donation.

Thanks!

-Phil Wrzesinski
www.PhilsForum.com

PS When you go to the Indiegogo site, you’ll see the perks you get for donating. The simplest one is that you’ll get a signed copy of the book mailed to you the day I bring them home from the printer. The coolest one is that you could hire me for a half-day workshop on the topic of your choice for a fraction of the cost of doing it outside this campaign. Thank you for your donations!

Not Just for Retailers

I was having a conversation this morning when the light bulb went on. I was asked by someone considering enrolling in the SPOTLIGHT ON MANAGERIAL SUCCESS workshop this Wednesday (it is not too late to sign up) whether he would learn anything useful since he “wasn’t a retail store manager.”

The answer is a resounding YES!

In fact, most of what I teach has implications far beyond just the retail landscape. I have followers from all over the world in all types of industries.

If you are in any position where you have to hire people, you need to read my book Hiring and the Potter’s Wheel: Turning Your Staff Into a Work of Art.

If you are in any position where you write copy to persuade people to buy or use your products or services, you can learn from my articles on marketing (and my new book coming out later this spring). 

If you are in any position to teach and lead your staff you would benefit not only from the Spotlight class, but also from the Free Resources on Team Building and Staff Meetings Everyone Wants to Attend.

I know where the confusion began.

The SPOTLIGHT ON MANAGERIAL SUCCESS workshop is being offered through the Jackson Retail Success Academy™. While JRSA™ is mostly geared for retailers, we have had many graduates from other industries. Other than the inventory management segment, most of what I teach there applies to all types of businesses. I run all local classes through JRSA™ because of my partnership with Spring Arbor University and their Hosmer Center for Entrepreneurship & Innovation. They provide a fantastic venue for hosting events like these and have been a wonderful partner.

You don’t have to be a retailer to take any of the classes or workshops I offer. You only have to be open-minded and ready to learn.

-Phil Wrzesinski
www.PhilsForum.com

PS I am already working on a date for the next SPOTLIGHT workshop. This will be an advanced degree in Advertising and Marketing in four fast-paced hours for anyone who has a business to promote. Stay tuned for details.

Is Collaboration Really the Problem?

I read an article that caught my eye in Inc. Magazine with the title “Collaboration Creates Mediocrity, Not Excellence, According to Science”. You read that title and you will believe that grand studies have now been done to prove that collaboration is a bad thing. Then you read the article and find out there is no science. There really isn’t even a good definition of “collaboration”.

Image result for inc magazine

Here is how the article defines collaboration…

“1) plenty of ad-hoc meetings and 2) open-plan offices that increase the likelihood that that such meetings take place.”

Really? That’s what passes for collaboration in corporate America? Floor plans that are conducive to more meetings?

I read the article, especially the “science” part of it and instead of seeing a problem with collaboration I saw a serious lack of good management. Here is what the science part had to say…

The problem is that rather than seeing a top performer as a role models, mediocre employees tend to see them as threats, either to their own position in the company or to their own feelings of self-worth.

Rather than improving their own performance, mediocre employees socially isolate top performers, spread nasty rumors about them, and either sabotage, or attempt to steal credit for, the top performers’ work. As the study put it: “Cooperative contexts proved socially disadvantageous for high performers.”

A good manager would have nipped that in the bud a long time ago. A good manager would have found ways to keep top performers at their peak while raising the level of mediocre employees. A good manager would have found ways to utilize the individual strengths of everyone on the team so that everyone felt like a valued contributor. A good manager would have created a team where everyone was working toward the success of the collective rather than individual success (while celebrating the individual accomplishments along the way).

I read that article (and the subsequent link to the study that used hair salons?? as their subject material) and came to a different conclusion.

Open floor plans do not lead to great collaboration. Then again neither do closed floor plans. And collaboration by itself without strong management and solid team building doesn’t work either. None of those address the true issue.

Collaboration works incredibly well. But only when you have the right manager in place, someone trained to build teamwork and communication and trust. 

How do I know? I’ve worked for managers like that. I’ve led teams of high productivity and high levels of collaboration. It all comes down to the skills of the manager.

That’s why I’m offering the SPOTLIGHT ON MANAGERIAL SUCCESS workshop next Wednesday, April 26th.  You’ll learn how to lead your team to their peak performance. You’ll learn how to create a culture that has everyone working on the same page for the same goals. You’ll learn how to motivate your team to do their best. You’ll learn how to set up training programs that turn everyone into top performers. You’ll learn all that in one incredibly fun day.

The class is limited to the first 18 people to sign up. Follow this link to sign up today.

-Phil Wrzesinski
www.PhilsForum.com

PS Do you wish you could attend but can’t make the trip to Jackson? Contact me and we’ll figure out a plan to bring this workshop to you.

The Team, The Team, The Team

If you know me well, you know I’m a Wolverine. Been one since the day my grandfather took me to The Big House at seven years old. It was the only university I applied to attend. If you know the University of Michigan and follow their football team, you’ve heard the immortal words of the late, great football coach Bo Schembechler, “The Team, The Team, The Team,”

Heck, if you’re a sports fan of any team, whether it is women’s gymnastics or men’s lacrosse or anywhere in between, you understand the power of teamwork and cooperation and working together as one unit. Ask any coach in America and they’ll take amazing teamwork over individual stardom every day.

Image result for bo schembechler the team

Why is teamwork that is so important on the playing field so neglected in the workplace?

I used to work on a team for the Los Angeles Unified School District. There were five of us on the team and each week we worked with inner-city LA teenagers at the Clear Creek Outdoor Education Facility in the Angeles National Forest north of the city. We did team building exercises with these kids. We taught them about nature and an outdoors they rarely experienced back home. We had bears foraging our dumpster, snakes slithering under our cabins, and coyotes howling at the moon.

And we had a Team.

At our staff meeting before each group arrived, we discussed who would lead each activity. That was the only person assigned any task. It was naturally assumed that the other four people would do everything else to support the activity and make sure the entire event was successful.

Now, on some teams, this might be a recipe for disaster. If something doesn’t get done, there would be plenty of people to step up and say, “Not my job.” The NMJ’s are killers to productivity and morale.

On our team, because we were hyper-focused on the experience we offered these adolescents, that was never the case. If one of us saw a job undone, we did it. Period. Everything was our job. There was never any resentment because we all had each other’s back and we all had the overall success of our guests as our goal. It was the most amazing work experience of my life, one I still think about to this day.

What made the difference?

When we weren’t leading team building exercises with the kids we were doing team building exercises with each other. We were all experienced at leading these exercises so we spent the summer creating new exercises to try with the kids. We tried them out with each other first. Our leader, Dana (he was a top-level college wrestler in the ’80’s, would love to find him again but I can’t remember his last name), worked with us all the time on communication, cooperation, problem-solving and trust – the core elements of any team building.

It made a difference for us. More importantly, it made a difference for our students (customers, clients, guests…).

This is why I am leading the all-day workshop SPOTLIGHT ON MANAGERIAL SUCCESS here in Jackson on April 26th. I want to teach you Team Building skills so that you can build your team to this level.

If you manage three or more people, you have a team. That team needs a foundation in teamwork that you can bring to the table through what you train and how you train. This workshop will show you how to do it the right way.

Space is limited. Sign up today!

-Phil Wrzesinski
www.PhilsForum.com

PS Our team disbanded when the LA Unified school teachers went on strike in October 1992. When we headed down the mountain after our last group, we didn’t know it would be the last time we saw each other. I headed back to Michigan and joined a new team that was as dysfunctional as my previous team had been functional. The difference? Leadership. Be your team’s Leader by learning how to build your Team.

Spotlight on Managerial Success – The Class!

You’ve hired a manager. Someone to help you run the day-to-day operations of your business. Someone to be in charge when you aren’t there. Someone to handle personnel issues and make sure all the tasks like stocking, straightening, cleaning, and serving the customers gets done. Someone to schedule (and train) the staff. Someone to give you the free time to do your jobs of buying inventory and drawing traffic and crunching numbers and plotting strategy.

You want a manager who is Reliable, Hard-Working, and Decisive.
You want a manager who is Compassionate, Empathetic, and Service-Oriented.
You want a manager who can build a Team, Communicate Effectively, Teach and Resolve Conflicts.

They have to bring some of those skills to the table. That last line of skills can be taught.

Here is the program I have designed to teach those teachable skills to you and/or your managers.

First we’ll start off the morning by doing some Team Building exercises, both to break the ice, and to show you how to incorporate such exercises into your training programs. You’ll learn a handful of activities you can run yourself, including how to choose the right activity for the level of your group, the steps necessary to build a team the right way, and the techniques used to apply the lessons from the activities to the actual workplace. This is the stuff big corporations pay big bucks for. This is the stuff I did almost exclusively in the late 80’s and early 90’sand incorporated into all my staff trainings over the years at Toy House.

Second, we’ll spend some time doing Communication exercises that help you become a better listener and a better, more clear communicator. You’ll learn how to make yourself easier to understand, how to persuade people to see your point of view, and how to get your directions followed more precisely. Poor communication is most often the cause of breakdowns of teams. It starts with you. Get this right and you have won more than half the battle.

That will get us to lunch. We’ll take a break.

After lunch we’ll delve into identifying and fixing problems. You’ll learn how to settle Conflicts between staff members that makes everyone feel valued. You’ll learn how to get others to buy-in to your philosophies and ways of doing things. (You’ll learn skills that top FBI negotiators use to always get their way even while creating a win-win situation.) Plus, you’ll learn how to keep your team motivated to do their best work. Here’s a big hint – money is not the only or even the best motivator. In fact it ranks fourth. You’ll learn the other three in this class.

Finally, you’ll design your own training programs both for new hires and for continued training & development of your current team. You’ll learn skills that help you Teach in a way that everyone remembers. Some people are born to teach. Others have to learn. You can learn.

If you are the owner and you have a manager…

Ask yourself how much time you would save having a manager trained in those skills.
Ask yourself how many headaches you would save having a manager trained in those skills.
Ask yourself how much money you would save having a manager trained in those skills.
Ask yourself, would you be willing to give up your manager for just one day to save all that time and money and headaches?

The first SPOTLIGHT ON MANAGERIAL SUCCESS class will be in Jackson, MI on Wednesday, April 26 from 8am to 4pm.

Because this is the inaugural class, the regular price of $250/business has been lowered to only $50/person. Yes, only $50/person!

I am offering it through the Jackson Retail Success Academy™ in association with Spring Arbor University. The class will take place in the Hosmer Center for Entrepreneurship at the SAU Downtown Jackson campus. (Take this class and you’ll become a JRSA™ Alumni which gets you discounted pricing on many other JRSA™ offerings.)

Space is limited to the first 18 people to register. Click here to sign up today.

-Phil Wrzesinski
www.PhilsForum.com

PS If you’re not in Jackson or can’t easily get to Jackson, get in touch and we’ll figure out how to do this training closer to your home.

PPS If you’re not sure if you should take this class, answer this question. Do you manage three or more people? If you said Yes, take this class.

Training for Store Managers

My trip through the malls recently has me wondering… Where is the true breakdown in the staff training? You can start with the store managers since ultimately they are responsible for training the frontline staff, but that begs the question. Are those managers properly trained to be a store manager? In a chain store you could ask the same question of district managers and regional managers all the way up to the top. (In an independent retailer there is only you and/or your store manager – are either of you trained for that role?)

According to the National Retail Federation, there are approximately 3.9 million retail establishments in the United States employing almost 29 million people. If you consider that each one of those stores has either a store manager or an owner/operator working as the manager, that means there are at least 3.9 million people in the United States who have the role of manager (and likely another three or four million assistant managers). 

Hammond Hardware 2015 Jackson Retail Success Academy

What training are you giving yourself or your managers?

Are you training your managers on Communication Skills so that they can better relate to and communicate with the staff?
Are you training your managers on Teaching Skills so that they can better share what they know with the staff?
Are you training your managers on Team Building techniques so that they can create a better team culture?
Are you training your managers on Conflict Resolution so that they can keep harmony on the team without just firing someone every time there is a problem (or worse, just sweeping it under the rug)?

Would you send your manager to an all-day workshop that covered those skills? (Would you attend a workshop like that yourself?)

Managers may or may not be in the position to make the decisions on advertising, hiring and firing, and inventory. But the one thing all managers do is manage people. The “soft skills” like Communication, Team Building and Conflict Resolution are necessary for managers to be successful, but are brutal to learn by trial and error. They need to be taught.

You should be hiring managers who already bring the traits of Compassion, Empathy, Leadership, and a Service Mentality. You can train all the rest.

I am developing a program just for managers that teaches those soft skills. How much would that be worth to your business?

-Phil Wrzesinski
www.PhilsForum.com

PS I’ll be doing this program here in Jackson first to fine-tune it before taking it on the road. Let me know what it would be worth to do such a training in your town.

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.