Inside Outdoor Magazine

SPRING 2018 | Inside Outdoor 43 an ongoing discipline that everyone in the company adheres to. If there is no significant response from a particular vendor, the merchan- dise manager or owner may need to get involved to force action. After 45 to 60 days, if there is still no resolve and if sales do not pick up to a re- spectable level, the first markdown is taken. This action will most likely land the vendor in the bottom 10 per- cent range. The result of this ongoing analysis is that the store does not end up putting additional funding into lines that are not productive. Let’s say the average GMROI for a given classification is 2.7. Any line with performance less than 2.7 is identified via the POS reports. Things either improve according to the schedule outlined previously or the vendor is dropped, the merchan- dise liquidated, and the money used to reorder top sellers on lines that are performing. Narrow the Resource Structure This process helps the store to narrow the resource structure. If for example, Vendor A is responsible for $100,000 in sales and Vendor B generates only $5,000 in annual revenue, it might well be decided to discontinue Vendor B if is determined that more volume cannot be gener- ated, even if Vendor B is profitable. The additional dollars are then added to Vendor A. This retailer is always on the hunt for new lines. A significant portion of open-to-buy dollars are kept avail- able for reorders and hot trending styles, fill-ins on basic inventory, an off-price buy, or a new line that needs to be “tested.” Another common request from this store is that, when possible, the vendors are asked to “locker stock” inventory. Basically, this requires the vendor to warehouse the backup inventory being reordered weekly instead of the store having to. This practice alone reduces inventory and increase turnover. In years past, this type of approach may have been considered too aggres- sive for some. In today’s retail environ- ment, managing vendor assortment is essential. Brand loyalty must be a win-win. Gone are the days when retail- ers should be expected to buy a line unconditionally that is underperforming simply because they always have. Re- tailers cannot afford to carry a line for a handful of customers who, in some cases, don’t buy until the line is on sale anyway. The resource profits when the store profits. If the store is not profitable with a particular line, the sooner the problem is dealt with, the better. Ritchie Sayner is the author or “Retail Revelation –Strategies for Im- proving Sales, Margins, and Turnover,” available from Amazon. He can be reached at RSayner@ rmsa.com. In years past, this type of approach may have been considered too aggressive for some. In today’s retail environment, managing vendor assortment is essential.