Inventory Management part 8. Your Mix- what do you carry, what should you carry by style, sex and price point. If you are not getting you turns, it could be your inventory mix, or if patients are walking away without making a purchase, could it be they have now found something they like.
Now comes the hard work. This one takes time and I recommend you use 2 people. You may have this information at the click of a mouse, but I would highly recommend you do this in person, because when you do, a whole new world will open up.
For this purpose, we recommend using a graph based upon retail price: Using excel or another spread sheet program, make up a sheet that looks something like this:
The categories, retail price point will vary depending on your stock level. The more you break it down, the better it will be: What you will see is retail price point by category and where you are lacking in a price point.
For Instance I would add:
- Safety Frames
- Insurance companies separate i.e. Davis Vision
- Other Specialty Frames
- Make a separate category of ‘Go Away’ Frames
- Make a spread sheet and put in your retail price and type of category
- Go through every frame manually place tick marks in the retail price
What it would look like when it is added up:
What do you see? Gaps in price point? Gaps in Styling? Gaps in mens, womens, kids, sunglasses and any other categories.
What do you see in this inventory?
What I see based upon this;
- Total number of frames= 1427= which means in order to achieve turns you should be selling about 357 frames per month. (Total divided by 4 turns). If some of the ‘Other’ are speciality products you can delete them out and calculate turns.
- Very little in the over $300 price point, which probably means you are not selling that price point at all or have a starting point to ‘downsell’
- The biggest selection is in the $81-$160 retail price which probably mean that your average frame transaction is $120.00.
Just by looking at this, you can determine by category and price points what you are lacking. If you want to increase your average transaction, put in higher end frames. (Show the best one first) Do you have too many low end frames?
Share your thoughts and questions in the comments below: