Always go in with a plan.
Most successful retailers understand that when it comes to stocking up, it's not about what you like — it's about what your customers like. But buying at the major Las Vegas shows is not always so simple.
Here are some tips and guidelines to help you get it right:
Don't overshop. Buy only for July through December, says David Geller of JewelerProfit. Run a report of what you sold last year by department, and look for two things. First, how many units did you sell in each price range by category last year between July and December? Second, how many will you have on hand on June 1? Buy the quantity at price points to fill in the gaps of what you anticipate you might sell again.
Know your store's data, and act on it. Joseph Romano, president of Scull & Co., suggests running reports on the following by merchandise category and by vendor:
- Inventory levels
- Your ability to pay
- Gross profit
- Stock-to-sales ratio
- Inventory turn
- Percent of gross margin contributed to the total
List your top sellers. Maintaining strong inventory turn means reloading in the lines you already carry, and staying away from new product as much as possible. Legendary jeweler Marion Halfacre of Traditional Jewelers, who died in 2007, put it this way: "I'm not big on new product. We have so much that's doing well, it really has to hit me over the head before I'll buy something new." Geller basically agrees, but suggests a limit of 10 percent for items you've never tried before. If the category goes sour, 10 percent won't kill you. And it gives you the opportunity to upgrade your store image and product mix.
SHOP LIKE YOUR CUSTOMERS, says James Dion, author of "Retail Selling Ain't Brain Surgery. It's Twice As Hard." Look at what attracts you first, then look at the price. Ask yourself what your customer would pay for the item and work backward from there to achieve a good margin.
Don't just focus on buying. Instead, use the show to clear out dead inventory. Get your vendors to take back for exchange any items that didn't sell well during the holidays. "They won't refund, but they may go for a two-for-one exchange," says Geller. "Have it written on the sale invoice at Vegas. That way, there's no misunderstanding later."
Have a plan and stick to it, says Romano. Don't get caught up in the show buzz. Your friends in the business can be a great source of new ideas, but if you do buy on their recommendation, do so pending confirmation upon your return to your store.
Only SPEND HALF YOUR PLANNED HOLIDAY OPEN-TO-BUY at the show, says Abe Sherman of Buyers International Group. Then leave the remaining budget for reordering your fast-selling merchandise.
If you're not sure, don't buy. (If you are sure, do.) We're revising this instruction a bit from our 2008 lead. In some cases, it's wise to ask vendors to come visit your store. But remember, if every retailer did that, there would probably be no such thing as trade shows. Instead, to be the best possible "citizen" of the jewelry industry, try looking at purchases made at the trade show as part of your attendance fee. Which means, if you feel confident in a product, buy it on-site at the event. Of course, if you're not sure and need time to think, ask for a personal visit from a rep or even a virtual appointment later.
MAKE SURE YOU HAVE ENOUGH. You don't want to overbuy — but sometimes, a category won't move if you don't have a wide enough selection for customers to choose from. Says Geller: "I knew one jeweler who had only six watches on display and didn't sell many. Once he stocked 15, they started to sell." To hedge your bets, get exchange privileges, and after 12 months unload the entire product line if it doesn't move.
A version of this story first appeared in INSTORE in May 2008.