This is Part 4 of a 10-part series on the Start-Up Mix, which is the selection of goods a retail store orders prior to opening its doors. Why a 10-part series instead of a quick list of tips? Because as you’ll come to see, the start-up mix is pretty crucial to a store’s success in its first few months of business. And as you may able to see from looking around your town, the first few months are a pretty crucial factor in whether an indie retail shop thrives or fails.
See Part 1 in this series on the importance of nichification in your start-up mix.
And check out Part 2 for ideas around budgeting for your start-up inventory mix.
Part 3 explores start-up inventory principles unique to online stores.
If you’re an indie retailer who’s also a passionate shopper, you might have some reigning in to do.
Today’s post is a big caveat to all retailers, whether brick and mortar, online, or both. For a certain type of retailer personality — the passionate shopper, i.e. people who get into retail largely because they love to shop — this is probably one of the most important principles to protecting their early success.
Ready? Here it is.
Don’t overbuy inventory. Ever.
Overbuying is tempting. When you first start out, you might be flush with loan money or a brand new credit card. Buying great stuff for your new store feels like a worthwhile investment. And the stuff you’re buying seems so great that you can’t imagine it not selling. You’ve been told you have great taste. You know you have great taste. You feel like you have a really good idea of what your right people want and will buy.
Still, I repeat the same advice:
Do not overbuy.
No matter how ‘on’ your instincts are when it comes to what your right people want, I promise you that your instincts will be honed and adjusted every season. Not that you’re wrong in your instincts about what your right people like — you simply don’t yet have the qualitative and quantitative firsthand data that proves to you what your right people really buy versus what they say they want. As you’ll come to learn, these are often two different things.
So buy conservatively, but especially with your first fill, no matter how well-versed you feel in your retail concept. You need to get a feel for what sells, what customers are attracted to, and what they express to you that they’d “hoped you’d have.” {You’ll hear a lot of that, as customers are very vocal with offering opinions.}
What constitutes overbuying?
A conservative definition of overbuying is: buying more than the minimum quantity required by the vendor on any items except for consumables {candles, gourmet items, apothecary — anything people use up and replenish}.
For start-up, you just want to order enough to fill your shelves or create attractive, full enough displays with very little, if any, backstock. Reorders can often ship quickly {depending on the vendor and the time of year, sometimes a reorder can ship inside of one week}, so if you sell down and are running low on one line or another, it’ll be okay. Except for proven lines, I would stick pretty close to the Opening Order Minimums set by the vendor.
Who especially needs to take this advice?
- People who have never owned or worked extensively in an independently owned retail shop before {in other words, working at a national department store or big box store isn’t the same thing — same universe, different planets}
- People who aren’t independently wealthy to the point where they won’t miss a loss of thousands of dollars
Now, this advice does not mean buy ones and two’s of everything and make your store look like an odds-and-ends shop.
There’s a balance between not buying too deeply into any one item and buying too randomly so that there’s no cohesiveness to your store design. How you achieve this balance is an algorithm you create of your square footage, the breadth of categories you plan to carry, your sell-through rate, and your display style {clean and orderly? spare and avant garde? multilayered and vignette-based?}. Your displays should look well-stocked, well-balanced, and aesthetically pleasing {a whole ‘nother post unto itself}, and do not need to be jam-packed to overflowing.
This “do not overbuy” advice applies to online stores, too.
Overbuying for an online store is a huge mistake. Go back and read the third post in this series, which divulges some insider financial tips for online boutique owners. The bottom line here is, when you’re “stocking” an online boutique, you only need to spend as much as you want to. Your customers can’t see into your store like with a brick and mortar, much less into your stock room. If you’re brand new to online retail and have virtually no built-in customer base {such as you might if you have a fairly well-trafficked blog already, or if you have a brick and mortar store with enough tourist traffic who’d be all too happy to buy from you once they get home}, then you might only want to buy 1’s, 2,’s or 3’s of all your items until you get some traffic, start selling, and start seeing patterns in what sells.
In other words, be conservative!
Remember, retail is part art, part business, and part psychology experiment. In all three respects, there’s considerable risk involved. It pays to hold onto your pennies wherever you can — and not overbuying start-up inventory is one smart way to start.
Retailers, what are your personal rules for how much to buy? What advice would you give a newbie retailer on how much start-up inventory to buy?
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