Inventory Management 13: How Often To Buy

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In retail stores, the buying period is called ‘open to buy’. Unlike the optical industry, traditional retail stores are buying 6-9 months in advance, hoping what they bought will be still hot and trendy in 6 months. Fortunately eyecare retailers have a huge advantage.. they can buy and get their products within a few days which has a huge advantage to be able to quickly change as the climate-trends change.

There are several scenarios on the open to buy cycle. I know retailers that will see reps 1-2 a year and reorder what has sold. I know other offices that will do major buys 2x a year and just sell off inventory through out the year. Traditionally most reps work on a 2-3 month cycle, meeting with customers when they are in the area.

There are pros and cons to all buying cycles and it depends on your market, your inventory turns, how trendy you are. If you carry a lean inventory and are focused on the ‘newest, hottest’ products and have a lot of walk in traffic you might want new and compelling merchandise to draw people in. This also has the advantage if you are selling out and ordering in quickly is to provide a sense of urgency to the customer.. Buy it now, it could be gone tomorrow.

If you have little time and lots of space, you might consider buying 2x a year and backing up your top sellers. This can save time in ordering and customer service, It is a bigger order.  As a rep, I loved writing big orders and only seeing the customer 2x a year.. saved time – money. The disadvantages- you can lose track of what you have in stock, by not reordering, it is hard to track what is selling and trends.  By not seeing your rep consistently, if a product is discontinued, you might not be able to return it.

Buying more frequently or in a 1-3 month cycle has several advantages.. buying in smaller amounts allows you to quickly change the mix, predict trends and pick up new products that are geared for specific eyewear lovers. If you are in a heavily trafficked area, it will help the merchandise not get stale. The other advantage which is so important is new inventory hopefully brings new merchandising..  New inventory mixed in with ‘old’ will bring new life to the boards.

The question always comes up:

‘I see 25 reps, and I don’t have time for all of them.’ Firstly, if you have have tracking your sell through by vendor you can probably eliminate a few reps. That might take some time, but eventually you will either sell out the product and the problem will be gone. That said, you can segment your vendors into categories ABC. A are top vendors you see every 4-8 weeks, B are vendors you see every 8-12 weeks etc.. Booking your next appointment with your vendor when they leave helps you to keep track of when you need to see.

 

Kala Mid Page

2 COMMENTS

  1. This is a very well thought out piece. I have sold product for 20 years – both middle, high end and boutique. In addition, I do inventory management seminars and consulting.
    Two things spring to mind from this piece. One is, people who reorder top sellers always have a store full of winners or “A” product. Selling off inventory is not advised unless the item has sat for a while. Secondly, since the retail customer drives the success of the business, it is paramount to do two things. One is never to close doors on looking at new lines and companies. The second is never to look at your reps as an inconvenience – they drive your business. better to know exactly what great things each rep brings to the table and concentrate on those items.
    Unfortunately for reps the reorder process means not so many big orders, but rather visits to tweak inventories and top-up. However, a good reordering customer will realize you more income if they are dilligent, than the two to three times a year big orders of the past.

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