Doing your market homework

Market Homework-web

August 2018—

Attending furniture markets is only half the job;
the real work starts when you get home.

Whew! Take a deep breath and relax. Kick off your shoes and allow your mind to decompress. It’s been a busy few days at furniture market, and now you’re back in your store.

If you’re like most retailers, as you get back to work there’s a bigger-than-life stack of mail, phone messages, notes from employees, and other concerns, each wanting your immediate attention. And while you’re sorting through all that, you have stacks of catalogs, information sheets and notes from market to review. Until you take these stacks of paper and put them to use, market will be nothing more than a drain on your well-being, wallet and time.

How do you do this? It’s not easy, but this outline can help you stay on task and focused. It’s important to set aside a certain number of hours each day for the next two weeks to address it; take any longer and you run the risk of forgetting what you saw and experienced.

First take your pre-market notes of the manufacturers and product you wanted to see and put it to the side in a separate folder.

Second, if you wrote orders at market, pull the paperwork from the pile and attach the vendor catalog to it as a reminder of what you ordered. This is a good time to fill in the details on these orders, establish your retail prices and total the order at cost and retail. You should also begin a ledger where you note the manufacturer, shipping date, total cost, total retail, and payment terms. Keeping track of this information will help you determine if your cash flow will be sufficient as payment for the merchandise comes due.

Third, examine which departments (bedroom, living room, outdoor, etc.) and fine lines (sofas, recliners, end tables, lamps, etc.) have had increased sales and improved margins. This will be easier if you use a computer to track sales. These trends will show you where your business is going and perhaps where you should concentrate your inventory purchases. Go through your market paperwork and pull out the information for these categories.

Having found and created these three stacks, there’s probably room for two more. The first is the info for the items you saw at the show that you think are going to be your next bread-and-butter pieces. Everything left over becomes your fifth stack, the one you’ll look at last.

This would be an excellent time to take a break from the paper work and get some feedback, maybe from someone you met at market who has a store in another part of the country or a friend you always connect with. Ask them what they’ve done with their information since they got home. Did they write any orders they didn’t plan on writing? Have they cancelled any orders? Do they have any information they would share with you that would make your store better? And of course, do you have any similar information you would share with them?

Now you should be ready to write your orders or adjust orders you wrote at market—make sure to enter the necessary information on your ledger of dollars spent and due dates of these orders.

In the event of a special price or special terms given at the show, be sure to write the terms and the salesperson’s name on the order. This comes in handy in case of a dispute with the invoice. If you have a manufacturer with whom you have an outstanding problem, such as unpaid co-op advertising claims or invoice errors, a phone call before the merchandise is shipped can do much towards getting a resolution.

Once your orders are written, create a cash flow chart to make sure you’re not only able to afford these purchases, but that the timing of the invoice due dates will correspond with your anticipated cash flow. You’ll also need to decide on merchandising and warehousing; having a game plan for your sales floor indicates to your customers and your employees that you are a true professional buyer.

Next step is to have a staff meeting. Pass around photos of the items that will be coming soon to your store and let the employees know what your prices will be. You might be pleasantly surprised to hear and see how often your employees will be telling your customers about what will be new in your store.

As the inventory arrives, start a ledger for this market trip. Note the placement of your inventory on the sales floor, and the dates on which you sell out of items. Visit other stores to see how they’re displaying similar items and their prices, you may not only find great display ideas but opportunities to increase your margins.

Having an after-market plan is just as, if not more, important than the market plan itself. Bringing it all together and documenting it will not only help increase your sales and margins, it will help you determine your budget for the next market.

About the Author

Tom Shay
Tom Shay has more than 25 years of experience in retail. Subscribe to Tom’s e-ret@iler, a free monthly newsletter packed with tips for improving the profitability of your store, at profitsplus.org.