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Most Missed Posts from 2012

I posted my top ten most viewed posts in 2012.

In all fairness and just for fun, here are the bottom ten – the ten least viewed posts (although I like to think they were just missed.)

Read on if you dare…

10. From the Mouth of Babes – Two great lessons on Customer Service I learned on a field trip with a bus full of fifth graders.

9. Don’t Marry Your Inventory – Some of the best advice ever on how to manage your inventory better and make it work harder for you.

8. Thoughts From a Wedding – Four really simple but important ideas I got from a wedding I attended.

7. Politics and a Plan – How to be prepared for the unexpected and not have to play the blame game.

6. Stay Above the Fray – Why negative advertising is so powerful in politics and so dangerous in retail

5. Make it More Fun – An NRF study said 78% of consumers would shop somewhere else if they thought it was more fun. Here are ways to make your business more fun.

4. Thanks! It Works! – The power of saying “Thank You!” and how those two simple words can make a huge difference for your business.

3. Tell Me a Story – Emotions move the needle far better than data. Stories are powerful. Are you telling yours?

2. Measuring People – Three different ways to “measure” your staff to make sure you are getting the most out of the investment you put into them,

1. What Do They Know? – One simple thing you can do to become more knowledgeable about the products you sell.

-Phil Wrzesinski
www.PhilsForum.com

Top Viewed Blog Posts 2012

Everyone loves Top Ten Lists.

Here is my list of my Top Ten Most Viewed Blog Posts from 2012

1. Two Thing You Can Correct Right Now – Two simple things you can do that won’t cost you an arm and a leg, but will make the next year better than the previous year.

2. Lessons From MLK Quotes – Five of my favorite quotes from Martin Luther King, Jr. and how they apply to independent retailers.

3. Two Days to Take Your Customer Service to Shareworthy Levels – Announcing a class I am teaching alongside Tim Miles at Wizard Academy on January 29-30. (You really should go!)

4. What to Do About Showrooming – We all face the problem of customers walking in with smart phones, checking out our product, asking our advice, getting our knowledge, scanning the UPC codes and buying it online. You might be surprised at my answer to this ever-growing problem.

5. This Will Be a Successful Year If… – A different, better approach to the dreaded New Year’s Resolution (Appropriate that this would make today’s list. By the way – I accomplished three out of four!)

6. Is JC Penney Making a Mistake? – They announced their new pricing policy at the beginning of last year. I had my opinions on whether it could work or not. Go see if I was right.

7. The Goldilocks Effect – I was egged on by a friend in another online group to discuss this inventory management topic about how to stock and merchandise your store to fit the needs of your customer base better. Apparently other people liked the topic, too.

8. Tell Me About a Time When… – The absolute best interview questions you should be asking!

9. Shopping Local Benefit Salt Lake City – Mostly a link to a great article about a study done in Salt Lake City. Either I have a lot of fans in Salt Lake City or people love to read more articles about the positive impact of shopping local. (You should forward the article to everyone you know in your local and county government economic development positions.)

10. Fair and Square – Another post about the JC Penney pricing fiasco. Their idea was right. Their implementation was wrong, wrong, wrong. Don’t look at their failure as a policy problem, only an implementation problem.

Definitely an interesting mix of posts, don’t you think? Covers a wide gamut from Hiring to Customer Service to Inventory Management to Shop Local to Pricing to Leadership.

Thank you to all who are following publicly, lurking quietly, or just plain stumbling onto this blog by accident. If there are topics you would like me to write about more in 2013, please let me know. I get the feeling the indie retail movement is on the cusp of some serious positive growth over the next few years.

-Phil Wrzesinski
www.PhilsForum.com

PS One of the reasons I believe we’ll see more people Shop Local, Shop Independent is because of a sense of community that they feel at your stores. If you have not yet read the book Pendulum, you need to go get it today. “Sense of Community” will be a driving force for the next decade at least. You should be playing up that aspect of your business.

I’m Gonna Raise Your Sales 300%!

I was at a conference where one of the speakers promised us he could raise our sales 300%!

Yeah, like me, you’re all laughing at him.  Huckster, Snake Oil Salesman, Liar Liar Pants on Fire and other derogatory terms crossed your mind.  But after further review, I think his plan was solid and would probably work.  Short term.

His plan was simple.*  Slash your prices by 50%.  Increase your advertising by 400%.  In short time your sales will be 300% greater than the same period last year.  You’ll be broke and filing bankruptcy, he was quick to note, but you’ll be happy because sales are up!

And therein lies the problem…

Ask any retailer, “How’s biz?” and they’ll either be happy because sales are up or sad because sales are down.  Folks, we’re tying our mood to the wrong numbers.  It isn’t about Sales.  It is about Profits.  Sure, increased sales make it easier to be profitable.  But they don’t guarantee it.

I’m still waiting on the savvy retailer, who when asked, “How’s biz?” tells me, “Awesome! I was able to cut three points off my COGS and finally got a handle on expenses.  Profit this year is well ahead of last year.”

Then again, I think most retailers are not even calculating such numbers.  They are just waiting until the year end when the accountant tells them if they made any money or not.

I get that.  Retail accounting can be scary.  Even though I’ve written a book on the complete financial analysis of the typical toy store and have also written an easy guide to reading your financial statements (those reports Quickbooks and all other accounting software can print with just a couple clicks), I’m still constantly trying to wrap my head around our financials.

But that is far better than putting my head in the sand and ignoring those numbers.  Especially now with the 4th quarter finally under way.

Now is the time to figure out a new pricing structure that might increase your gross profit.
Now is the time to figure out which expenses are out of whack and need attention.
Now is the time to figure out what inventory isn’t moving and needs to be marked down.
Now is the time to figure out where are the holes in your training program.

-Phil Wrzesinski
www.PhilsForum.com

*PS  Don’t try his plan.  Please don’t try his plan.  Even he didn’t want anyone to try his plan.  He was just trying to make a point (and I was, too).  If you try anything, try measuring your financials once a month.  Yeah, it’s more work on your part.  Yeah, it’s way more rewarding when you do that work right!  Waaayyy more rewarding.

Don’t Marry Your Inventory

I had a buyer who insisted that he had to keep 24 pieces of a particular item in stock.  It was a “must have” item, he told me time and time again.  Fortunately, we have a POS system that tracks the sales of these “must haves”.  In the previous 18 months he had sold exactly one.

I define “must haves” as items people come in asking for by name.  If your customer walks through the front door and says, “Where is…?”, that is a must have.  If you bought 24 of an item and 18 months later you still have 23, that is a must go.

The problem we often run into is two-fold.  First, we believe strongly in the products we buy.  If we didn’t we wouldn’t (shouldn’t?) buy them in the first place.  Second, we don’t like to admit our mistakes.  So we end up marrying our inventory, sticking with them far longer than we should, hoping things will work out.

Don’t marry your inventory.  Instead think of your relationship with your inventory as more of a foster parent trying to find each item its forever home.  Your inventory is supposed to leave you – the quicker, the better!  Your inventory needs to move on, create new relationships.  Your job is to help it go.  Some of your inventory is so good at meeting new people that it goes easily and often.  Some takes time (and discounting).

So accept that you will make buying mistakes.  We all do.  Accept that your inventory is not your partner.  Change the relationship dynamic and do what you have to do to move it out.  Pack the bags and smile every time you place your inventory in a new home.  The good news is that there will always be more inventory to replace the ones you sent away.

-Phil Wrzesinski
www.PhilsForum.com

PS  Not sure if you have married your inventory?  Check out my e-Book Inventory Management (free download) and do a little math to see if your inventory levels are where they should be.

PPS  How long should you hold onto something before you discount it?  It depends on the type of product you carry and the type of retailer you are. I have retail friends who give a product 30 days to prove their worth.  I know other retailers who give it one quarter or season.  I like to give my toys one Christmas to find their forever home on their own before I step in to help.  It all depends on the product and type of store.

Do This Math – Now!

Do this math.  It is easy.  If you have a POS system worth a damn, it is really easy.

On the first of every month run a report that shows you your total Inventory at Cost that you have on hand.  Write it down.  Put it in a spreadsheet.  Just collect that number Every. Single. Month.

It comes in handy when you want to know whether you are getting the proper return on the money you spend on inventory, whether your inventory is too high or low, how your inventory (and hence cash flow) fluctuates, and when you need to think about having a sale.

Most POS systems don’t actually track this number over time, only what you have on hand today.  So on the first of the month, after you say “Rabbit”, find out your Inventory at Cost.

-Phil Wrzesinski
www.PhilsForum.com

PS  How does that number come in handy?  To calculate your Turn Ratio and Gross Margin Return on Inventory, you need to know your Average Inventory at Cost (those 12 numbers added together and divided by 12).  I figure if I remind you now, you won’t have to do as much digging to get the numbers from the first 6 months of the year.

PPS  My 4th grade teacher taught us that if you say “Rabbit” as the first word out of your mouth at the start of the month, you will have good luck all month.  I’ve been doing it for over 30 years (who says you don’t remember what you learn in school?) and it works.

What Would You Do With…?

What would you do with 60 copies of the book Hiring and the Potter’s Wheel: Turning Your Staff Into a Work of Art?

  • Would you use them to prop up a table leg or two that is out of balance?  
  • Would you use them as a door stop to keep the front door open when the wind blows?
  • Would you try to sell them and make some money?
  • Would you give them out as favors at your next big gathering?
  • Would you wrap them and give them as thoughtful gifts to anyone you knew who did a lot of hiring?
  • Would you have a contest to see who could stack them in the most interesting way?
  • Would you create a wall covering with the book jackets?
  • Would you use them to start a bonfire on your next camping trip?
  • Would you use them to hold down the floor or hold up the dust?

What would you do with four hours of time with an award-winning, creative-thinking, trend-setting retailer whose store was named One of the 25 Best Independent Stores in America?

  • Would you use him to train your staff to take Customer Service to levels you never knew existed?
  • Would you use him to give you one-on-one advice on your marketing, your inventory management, your hiring & training, or your financials to help you find the extra $10,000-$20,000 you know is hidden in there somewhere?
  • Would you have him help you uncover your Character Diamond so you will have a blueprint and guide for every single business decision going forward?
  • Would you get him to write you new advertising copy that will drive more of your type of customer through the door?
  • Would you share his talents with other businesses in the form of a seminar or workshop that helps everyone become stronger, raising the tide for all the boats in your area?
  • Would you ask him to bring his guitar and harmonica for a little performance?

What if I told you that you could have both for only $1200?  That’s it. 


Twelve hundred dollars gets you:

  • Sixty copies (one case) of my book Hiring and the Potter’s Wheel for you to use as you please.
  • Four hours of my time and business knowledge to help you succeed.

I’ll pay my own way to travel to your location (Continental US only).  I’ll pay for my own room for one night.  I’ll bring the books, handouts, and whatever other resources available to me to help you meet your goals.


What are you waiting for?  Contact me.  (Or share this with someone who could use it.)


-Phil Wrzesinski
www.PhilsForum.com


PS  In case you’re wondering if this is a good deal…  I typically charge $1000-$2000 plus travel expenses for a one hour presentation.  Books sold separately.  This deal is two-fold.  First, to help spread my book out to the world.  There is a lot of bad hiring going on right now that this book could remedy.  Second, I love to help others.  The more I get to do that, the more inspired I am to do more.

Raindrops Keep Falling on My (Son’s) Head

For the last 2 hours my 13-year-old son and I have been on a search of a raincoat.  We live in Michigan, one of the top ten states for # of rainy days per year.  All we wanted was a simple raincoat with a hood, size adult small.

We went to four department stores, no luck.  Only one even had a raincoat of any kind and only in L or XL.  One of the stores told me they sold them but only during the season.  What season?  April showers?  Last I checked we get rain in MI from January through December with the bulk of it from March to October.

We went to both sporting goods stores.  One had only ponchos.  Really?  The other had the same style and brand as the department store, oh yeah, and same sizes, too – L and XL.

We went to two mass market discounters.  400,000 square feet, zero raincoats.

With gas prices the way they are, I don’t see us driving 45 minutes to Lansing or Ann Arbor to the bigger sporting goods stores.  Hello Internet.

The Lesson In All This
Do you have seasonal items in your store ALL season long?  Do you have seasonal items even after the season is over?  Do you have hard-to-find items that the national chains just don’t think is worth carrying any more?  (Do you have a plain colored simple raincoat with a hood in an adult small?)

Are you advertising that knowledge like crazy?  You should.

-Phil Wrzesinski
www.PhilsForum.com

PS  If you need a raincoat in Jackson, MI, don’t go to Target, Meijer’s, JC Penney, Sears, Elder Beerman, Kohl’s, Dunham Sports or MC Sports.

Monthly Chores

Today I…

  • Balanced the store’s checkbook
  • Ran Sales Reports by department
  • Measured GMROI by department
  • Ran current Balance Sheet
  • Ran Profit & Loss for the month and year-to-date
  • Sat down with my buyers to make sure we were on track
  • Monitored Cash Flow*

I’m not bragging.  I’m not even saying I liked doing any of those things.

I am more Big Picture than I am Data & Details.  But it takes Data & Details to draw the Big Picture.  So I spend a few hours on the first of each month drawing the Big Picture with all of that Data & Detail.

Keeps the Big Picture clear in my head.

You, too?

-Phil Wrzesinski
www.PhilsForum.com

*I actually do this daily, not monthly.


PS  The hyperlinks above take you to a couple really cool documents that help you understand those calculations.  Most people won’t bother to click on those links.  But then again, you are not most people.

The Goldilocks Effect

That porridge was too hot.  That porridge was too cold.  But this porridge is just right.

And so goes the fairy tale we all know as Goldilocks.

And so goes the dilemma all retailers face.  How do we have a “just right” product for all the Goldilocks who walk through our doors?  Do we go deep? Or do we go wide?  Do we stick to the tried and true or do we jump on the cutting edge?

The answer depends on the type of Goldilocks who enter your door.

Are you a tourist town with plenty of one-time visitors?  Stock it wide and shallow.  Cover a whole bunch of ground with a wide variety of product, but not deep on anything.  That way you can appeal to the wide variety of tastes.  Plus, you’ll generate word-of-mouth as people marvel at your amazing selection.

Are you selling a commodity that brings people back in the store time and time again?  Then go deep on the top two or three selling items in each category.  Make sure you always have the best sellers in stock.  Never run out.  You’ll win the reliability game and make it up in volume.

Are you selling uniqueness to the same base of people?  Rotate your stock.  Keep bringing in the new and exciting.  Move things around regularly.  Go for the seasonal, the fads (that you like), and the out-on-the-edge products.  People will come back time and again to see what is new.

Are you selling quality?  Stock a good, better, best option so you have something for those who want Mercedes on a Mercedes budget and those who want Mercedes on a VW budget.  The dress sellers know that if you want to sell a $500 dress you better show an $800 dress.  But always show the filet mignon first.

There are a lot of Goldilocks out there.  The key is knowing which Goldilocks are coming through your door.  Figure that out and your products will always be “just right”.

-Phil Wrzesinski
www.PhilsForum.com

PS  Yes, it does make sense to try to cater to only one set of Goldilocks.  You cannot be everything to everyone.  Even Wal-Mart knows who to leave out.

PPS  No matter how you stock it, you still need your inventory to make you money.  For some great tips and two critical formulas you need to be calculating, download my FREE eBook – Inventory Management.

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
www.PhilsForum.com

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