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That Kind of Customer

Don’t you just hate the customer who walks in, looks around, and then asks, “What kind of deal can you make me?”  No deal, no special, they aren’t buying.  Not only that, they are walking out grumbling as though you missed the boat. Everyone else has a special. Why not you?

Let me ask you this…

Would you rather have a customer who comes in once a month and spends $50 on regular priced merchandise or a customer who comes in twice a year to buy $315 worth of merchandise for $300?

We hate that second customer, don’t we?  Can’t stand seeing them walk through the door.

Yet we are all guilty of being that kind of customer.

I’m attending a conference and trade show for the juvenile products industry this week.  In a couple days I will walk the trade show floor asking every vendor what kind of incentive they will give me to place an order.  5% off?  Free freight?  Extended dating?  All of the above? Go big or go home.

And the vendors look at me the same way I look at my customers who do that.

Here is the funny thing…  Unless the deal is really big, writing two orders a year is the surest way to put you in the poor house. It’s bad for cash flow.  It’s bad for product mix.  It’s bad for flexibility for your store.  When you place orders that big, you tie up a lot of money, a lot of showroom, and a lot of warehouse space under the hope you can sell it.

But what if you don’t?

Your store will actually have more cash, more flexibility, and more profit if you made six or more smaller orders at full price than two big ones at minimal discounts.  First, you would have more flexibility to always be in stock if one item starts selling fast.  Second, you would have less dogs to markdown when an item dies on the vine.  Third, you would have the cash in hand to pay for the order before the terms came due.

And finally, you would become the kind of customer your vendor wants to do business with.

Be that kind of customer.  It will improve your relationships with your vendors and bottom line.

-Phil Wrzesinski

PS  But still ask for those discounts when you do go to the trade shows.  Just don’t stretch your order to get them. More often than not you’ll lose all the discounts by buying stuff you don’t want or can’t sell. Better yet, ask for smaller minimums so you can make more small purchases throughout the year instead of just waiting for the next trade show.  For more on how to manage your cash flow and inventory download my FREE eBook Inventory Management

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