7 Best Ways to Increase Retail Employee Productivity

Posted on May 1, 2012 | Leave a comment

Sometimes getting employees to show up, let alone on time is a challenge.  So how do you really increase their productivity? Having started and run a successful retail venture for more than a decade, I know first hand how important it is to have employees making real contributions.  I learned from my own failures and applied those lessons (painful as they were), implemented the wise actions of other thriving retailers (used their painful lessons) and ultimately increased my success. Here are seven tools that developed out of those lessons.  Each one will make the very idea of employee productivity less daunting and increasing it more manageable.

  1. Set Sales Goals – Employees want something to shoot for just as much as you want them to strive for that sales goal.  Set and share the overall store’s sales goals and then share their individual sales goal.  Yes, this will be a time commitment and you are already time-crunched, but two things to remember:  1) it really only takes 2-3 hours to crunch and update these numbers each month, 2) the dividends it pays back are at least triple the investment. It will also help to identify where someone is struggling and correct their weaknesses.  Whether your employees earn commission or not, each one wants to make a contribution—they just need the tools to get there.
  1. Train on Sales Process – A sales process is more than greeting the customer and thanking them for coming in.  However, it doesn’t have to be a complicated thing either.  In its most basic format it looks like this:  greet, open-ended question to assess needs, fulfill those needs, ring up sale and thank customer for their purchase.  Training new hires as well as continuing refresher courses for the whole staff shows them the company is a viable, thriving business.
  1. Provide Consistent Feedback – In the absence of communication, employees will make it up and usually what they make up is not what the company needs in the pursuit of success.  Particularly with new employees, keep the feedback going daily.  Your more established employees still need feedback, but more weekly rather than daily.  The form of communications should be tailored to what resonates most with each employee.  Some employees prefer a written note of “Good job juggling three customers simultaneously”; others prefer a verbal one-on-one.  However you acknowledge their efforts, letting employees know when they are on the right track and where they need to improve is valuable. They want success for the store as much as for themselves.
  1. Daily To-Do Sheet – A daily sheet keeps everyone working toward the same goals and makes all team members aware of how their individual role is integral to the whole.  Also, seeing tasks and goals laid out on paper leaves less room for the “Oh, I didn’t know I was supposed to do that” and more space for overall success.
  1. Use Employee Enthusiasm – Retail sales people are on the floor, listening to the client base, talking about new products and hearing needs.  They often have fresh ideas as they see first hand what works and what doesn’t.  Asking for their input and then using their energy to roll out a product or program they fought for goes a long way to generating more sales.  The more they see their ideas being used, the more enthusiasm they’ll have for contributing to the overall store growth.  Success builds on success.
  1. Provide Opportunities for Advancement or Recognition – Whether there is a large promotion available for great performance or a small award for an employee who contributed above and beyond.   If people feel their efforts are recognized and appreciated, they will strive to do more.
  1. Conduct Quarterly Staff Meetings – No matter how small or large your staff, a quarterly meeting keeps everyone updated on goals attained, future challenges, new products coming in and programs to be launched.   It’s a good time to ask for feedback and encourage brainstorming on specific promotions.  This is also one of the best opportunities to praise an employee or a team as public recognition are most highly valued.

You may be doing two or three of these, congratulate yourself for that.  Now, just add one each month to increase sales, decrease returns and keep customers happy.  As you add a new tool, make sure to repeat it so it becomes a habit before adding another one.  In this way, you build a structure that will keep paying you dividends for months and years to come.

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Posted in Operations, Selling

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Design Mistakes to Avoid During Store Planning and Build-Out

Posted on March 24, 2012 | Leave a comment

In the process of starting a store, there are many decisions to be made and plans to be executed.  Planning the physical space and developing a layout can be some of the more exciting ones.  It’s new and the stream of possibilities can be enticing (and sometimes overwhelming.)  We ran across an article in Entrepreneur  that provided six good tips to consider when planning your store design.

Six Design Mistakes to Avoid in Planning Your Store

We’ll add a couple of additional thoughts to keep in mind when pursuing your store design. First, don’t overspend on a build-out.  It is such an easy piece to blow the budget on, yet it may not pay you back.  Set a realistic budget based on  sales projections  and how long it will take to recover the investment.   Remember, in a typical lease the landlord keeps all leasehold improvements so if you  decide to move he’ll have a nicely improved space  to sell to the next tenant–thank you very much.   (Or, in a potentially adverse situation the  landlord will require you to remove leasehold improvements, e.g., walls, cabinets, etc.)  Moral of the story:  clearly understand your leasehold obligations or restrictions before implementing store design plans.

Lastly, get the help of a retail design professional who understands traffic patterns, lighting and color.   These all impact a customer’s experience and will give your store a professional look and feel.  Customers want to trust that you know what you’re doing before they buy.  Having an interior design that looks consistent with your inventory and brand is essential to building that trust.

For more ideas visit the design galleries on the visual merchandising and store design website —  vmsd.com

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Posted in How To Open a Store, How to Start a Store

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The Siren Song of Retail Start-Up

Posted on February 24, 2012 | Leave a comment

A retail start-up seems so easy.  You just buy a bunch of inventory, rent some space (if you are a physical store and more than 94% are), open your doors and sell to the throngs of people who are going to come in–right?  And it just seems like so much fun.  After all, it’s shopping combined with hosting a party everyday. Who doesn’t love both of those things?  And then add to that the media articles quoting “projected sales” of this store and “growth” of that store and you feel like you would be crazy not to jump into this gold rush.  Before you are lured by this siren’s song, let’s look at one example that crashed on the rocks.

A children’s superstore that was heralded as being THE NEXT BIG THING and still in start-up mode zoomed off the cliff earlier this week.  They had just opened, got their suburb to fork over all kinds of tax credits, enticed a high profile executive to jump from the WalMart yacht to their dingy and invested untold thousands in build out, inventory and employees; only to close abruptly four months later.  See what I mean by zoomed?  It is another reminder of how perilous a retail business can be and how important proper start-up planning is.

The seeds for success in a retail venture are actually planted long before any money is even invested.  I talk with many start-up retailers who are more geared for failure than success.  It doesn’t have to be this way.  So let’s look at why independent retail start ups fail and ways to plant the seeds for success.

First, many new retail ventures fail because they not only  lack  planning, but lack purpose.  A purpose gives you a reason for being in business and draws people in to your company and store.  It drives a real vision of what success will look like for your company and defines your business.  Customers and employees feel they can  invest their money and time in a mission.

Second, the start up retailer may not have a good purpose.  Ego is never a good purpose.  To build and sustain a retail venture, which is risky enough, ego will not help yet it is a frequent reason for starting a business.  Another poor purpose repeated in retail,  is the claim of not being able to find the product that this store will feature.   That is, the new store owner says he/she could not find the kind of kinds of products  she wanted in her community.  This is a problem not a purpose.  Why?  Folks, it’s called the internet, a vehicle on which you find almost anything and it is very likely the lines are available in your town already.

Whew, you say.  You don’t want to be the next one to zoom off the cliff, but you still have a true desire for a retail start up.  So how do you know if your idea passes the litmus test of a good purpose?  Well, here are a few sound purposes that will guide you.  First, you have a mission.  Examples of entrepreneurs who started with such a mission are Toms Shoes and The Body Shop.  Toms wanted to shod the feet of every shoeless child in Argentina.  The Body Shop wanted to feature products not tested on animals.

Second, your mission solves a problem.  In the Wonder store example their problem was the hassle of shopping with kids.  (Seriously, any one who has kids has found just getting the kids in their car seats is the beginning of a long string of problems.  A superstore does not solve the problem, but a delivery service or nanny accompanying a personal shopper does.)  Take a really hard look at the problem you are trying to solve and challenge yourself to see if a retail store is really the answer.

Take the time now to plant the seeds for retail success before you commit time and money (actually money, time, energy, sleep, interests, friends family, vacations all get invested).  Let a good purpose drive your plan and guide you as you execute your start up.

Wishing you good planting.

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Posted in How To Open a Store, How to Start a Store, Operations, Retail Trends, Selling, Start Up, Store Closing

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Debt and Deadlines

Posted on February 9, 2012 | Leave a comment

Not having a business loan or debt is a good thing, right?  I have met with quite a few brick and mortar stores where the owners are opening and running their businesses with a simple month-to-month lease and without a business loan. They have negotiated with building owners to keep the lease flexible.  They have figured out a way to avoid going to a bank for a loan. (Which, considering the current credit climate, they probably would not get even if they applied for one.)  We should be giving them congratulatory pats on the back, right?  They’re keeping their businesses more nimble. Their knees are bent, allowing them to jump off if need be.

But I maintain that lack of a loan or long term lease can be bad for becoming a profitable business.  I’m not saying go rack up debt on your business credit cards here, (so don’t call Suze Orman on me); but debt and deadlines can be useful in driving efficiency and profits.  In 1996, when we opened our first store, we applied for and got a business loan from a local bank.  Since they were local (I know, I know these don’t even exist anymore), I could stop in and ask for resources and they could check on me.   There was built-in accountability.  I had to accomplish my sales goals in order to pay that loan each month.   However, I see retailers–both brick and mortar and online–that are operating without a loan.  Some of these retailers have a safety net of a spouse or partner footing the bills.  But it makes me wonder:  if an owner is uncomfortable with the idea of a loan, what does that say about his/her confidence in the their business?  Not having a structure or parameters does not force you to strive and may encourage sloppiness.  Such owners can meander along without anything driving them to achieve a profit (or take home a paycheck.)

The logic  here has nothing to do with the standard ones of needing debt to grow a business.  First, a lease or a business loan provide structure.  You have to run your business well enough to last the entire lease.  To a certain extent, having a three year lease with a three year renewal option forces a look at short term and long term goals.  The very practice of setting goals and assessing the achievement of them is an exercise that can only strengthen a business.

Second, deadlines and debt can provide an impetus for change.  The weaknesses in your business are exposed when held up to the light of a monthly loan statement.  Being accountable to repay a bank loan can be an impetus for change. If a business is having a hard time making that loan payment, they need to assess why they are cash strapped.  And a bank is not going to say, “Sure, just get us that payment whenever you’ve got your cash flow figured out”.

If you can’t cut yourself a paycheck and aren’t operating in the black, you need to ask yourself–what is driving the store?  Do you have goals set to earn an income from your business?  What kind of deadlines have you put in place to get out of the red?  Have you detailed the steps necessary to hit those deadlines?

Debt and long-term commitments are obviously not necessary to running a thriving business, but they can be a tool for holding us accountable.  Absent those parameters, it is up to the individual owner to create the structure and self-discipline needed to achieve a financially successful business.

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Posted in Operations, Retail Trends, Start Up, Store Closing

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Pay Yourself First

Posted on January 24, 2012 | Leave a comment

A recent article in the Toronto newspaper The Globe talked about how to pay yourself as a small business owner.  Highlights included tax implications that must be considered when taking an income from your business and how a small business adviser at your bank can be of help.

I would like to add a third valuable point which is:  pay yourself first.  You’ve probably heard this adage, but may not have heard the real-world implications of this.  First, if you can’t pay yourself first your business may not be viable long-term.  That is to say that you may need to take a hard look at reigning in expenses or growing sales.  Do you have “leakage” in the expenses area that can be cut off?  The expenses that may need attention can be big or small.  An example of big is taking a careful look at payroll or checking for reasonable business insurance levels.  Smaller items can contribute to tight cash flow when taken as a whole.  Maybe you don’t have to buy the premium shopping bags, spring for staff lunch every Friday, or have a contracted shoveling service.  So paying yourself first will help you to run a more efficient business .

A second advantage of this discipline is that it will force you to take a hard look at other things in your financials.  Until I started taking a paycheck, I was not good about tracking my mileage and taking the appropriate write-offs.  I had to use my car for seeing vendors, dropping off mail at the post office, buying office supplies and dozens of other errands.  I cringe when I think about the hundreds of miles I neglected to claim just because I didn’t have the discipline.

Thirdly, you are probably the hardest-working employee of your business and you certainly have taken the most risk.  You have invested your time, effort, energy and (most likely) money to create and sustain your store.  Don’t you think you deserve to get paid for all that?  I certainly do.  Working away for no money is called being slave or a charity.  You don’t need to be a slave to your business and your business is not a non-profit, so take even a small paycheck to start.  The reward of a paycheck was a good motivator for me.

And talk to your accountant about other ways to compensate yourself as a business owner that avoid payroll taxation such as leasing a car or paying yourself back for legitimate business expenses.

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Posted in How To Open a Store, How to Start a Store, Operations, Start Up

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New Year’s Resolutions — More Foot Traffic

Posted on January 12, 2012 | Leave a comment

It’s 12 days into the new year now and you may be sitting in your store wondering how you are going to drive more customers through the door.  The thoughts can start out idly enough with something like, “Hmm…how am I going to make sure I get enough people in this store to buy what I’m selling?”.  It can rapidly spiral down from that to “how many customers do I need?”, to “OMG, I need to get hundreds of customers in here, no thousands–uuughhh” and I’m sitting here by myself right now!?  If this is you it’s okay.  You’re not alone.  Really, you’re not but it can feel like that.  Other businesses around you may say they are doing fine but retailers aren’t always honest with each other.  For those who feel like they’re living Munch’s “The Scream”; let’s roll up our sleeves, get to work and figure out some things together.  This won’t take long, but will give you some place to focus those energies.  Here goes:

Resolve now to ease your dependence on the daily swings of foot traffic and slow periods by building an events calendar to keep your sales and merchandise moving throughout the year.  Give yourself time to reflect on last year’s successes and challenges not met — such as previous slow periods or times when cash flow was critical.

Developing a continuity of events gives your customers something to look forward to and a reason to visit your store.   Scheduling events during those critical times gives you a boost in sales and cash flow when you need it most.  Events also create energy and excitement for your staff to keep the humdrum of everyday retail at bay.

The mistake that many stores make is to focus exclusively on sale-driven events — though sales (price discounts) are a powerful attractor it can also have an undesired effect of teaching your customers to shop only when you have a sale — which diminishes your profits.  Your planning calendar should include a variety of events and activities.  We used some of the following ideas in our planning process:

  •  Charity sponsored event (with portion of the proceeds going to a local charity — the local charity may also be able to bring in their participants to discover your store)
  • Trunk shows (with featured designers previewing upcoming seasonal merchandise that can be pre-ordered)
  • Multi-store event (partner with other stores in your area to leverage an evening of shopping)
  • VIP previews for the new season of merchandise (exclusive to best customers)
  • Holiday shopping dollars (your best customers receive a gift certificate to spend at the end of the year)
  • Clearance event (major inventory reductions twice a year)
  • Tax free holiday (pay the sales tax for purchases during tax season)
  • In-house clinic (or demonstration) on topic related to your merchandise
  • Runway shows (these are typically held outside of your business but for fashion retailers this can be good exposure to new clientele and the media)

Use a variety of methods to promote your events and see which works best for your customers.  We found the most successful methods were a combination of a news release to local media, social media (blog post) and postcard mailing or e-mail announcement to our customer list.  For public events we also created new window (and in-store) merchandising along with a vinyl window decal which could be removed after the event. Promote the event direct to your customers at least two weeks prior to the event.  Another good habit is to call your best customers to make sure they know about the event.  Media listings typically require 4-6 weeks lead time for print or online publication.

The good news is that the promotional tools you use and the structuring of events becomes familiar and efficient as you begin to repeat the process.  Take note of things that work particularly well with your customers so you can use them in the future (repeat success and eliminate those things do not work.)

Most of these events tend to be a low cost investment (less than $500) with most of the money going towards promotion materials.  The financial returns can be substantial and often create residual foot traffic for days after the event.

Start now to ease your dependence on the daily swings of foot traffic and slow periods by building an events calendar to keep your sales and merchandise moving throughout the year.

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Posted in Marketing, Promotions/Events, Selling

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An Insider’s View on Establishing & Maintaining Credit

Posted on December 15, 2011 | Leave a comment

Guest post by Mike Wittman

I have been working with independent specialty stores since 1974.  First as a company representative and for the last 10 years as an independent rep.  From time to time I have been asked by credit managers to talk to an account concerning late payment or no payment.  I have also been asked by my customers to intercede with a credit manager after they have received an aggressive letter or phone call concerning payment.

Here are some of my thoughts:

Use Your Sales Rep as an Ally

Your sales rep and vendor will do everything possible to help you run a profitable business.  The last thing a credit manager wants to do is put an account up for collection.  Therefore, the most important thing you can do is have a good relationship with that credit manager.  If you are going to be late with a payment call them before they call you.  If they know what is going on they will help you any way they can.  Perhaps, you can send in a partial payment.  This will let them know you have good intentions and perhaps you will be able to receive some small orders as you pay.  Credit managers tend to really get excited
if an account doesn’t answer the phone; they fear you are not still in business.

Write Smaller Orders More Frequently

Write smaller orders more often. Sales managers like to hatch great plans to make their numbers so they create programs like: Minimum order is $2,000 and that will get you a 10% discount. Or write a $2,000 order and the vendor will give you an extra 30 days to pay.  These are great programs for vendors, but may not part of your company’s current plan.  I have always told my sales managers that I would rather have two orders for $1,000 orders or 4 orders for $500 so the account can sell the merchandise before the invoice is due.

To that end, don’t be afraid to use your credit card.  If a company gives you 30 day terms, you can use your credit card and get an extra 30 days to pay. Now you have 60 days to pay.   Just be mindful of your credit card debt.

The Aggressive Letter or Call

Sales divisions and accounts receivable departments have different goals and usually don’t talk unless something has escalated.  Not to throw stones, but yes, there are very tough credit managers out there.  Don’t be afraid to use your rep.  Over the years, accounts have given me copies of letters from credit managers that they felt were overly forceful.  I have always forwarded such letters to a vp of sales.  Many times the end result has been a new letter with a less threatening tone being created.

If I can leave you with one most important thought, it is COMMUNICATE.  In this retail climate everyone needs to have as many people helping them as possible.

Mike Wittmann is owner of Wittman SP, an independent sales company for lines such as Baggallini Handbags, Lewis & Clark Travel Accessories and Tucano Briefcases.  He has more than 30 years experience in the accessories industry.

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Posted in Buying, Inventory Management, Operations

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Protecting Your Reputation Online

Posted on December 12, 2011 | Leave a comment

Comments Posted Online Can Affect Your Reputation and Revenue

In the not-to-distant past, dare I say the 1990′s,  the reputation of your retail business was probably driven by word-of-mouth with real customers talking to their  real friends about your store and (hopefully) how much they loved it. Today, with the rise of social media, your business reputation can be influenced positively or negatively by the comments of a few website posts, whether on blogs or user review sites such as Yelp and Citysearch.  Online comments and postings have the potential to turn your hard-earned, positive “word-of-mouth” reputation into a negative one very quickly.

In our retail business, we worked hard to satisfy thousands of customers.  In many cases we even received written thank you notes for some of the extra service we provided.   But any time you are open to the public, there are going to be some negative people.   Despite  our best attempts to make a situation right–accepting returns of damaged or worn merchandise– some customers were determined to remain  disgruntled.  In every single case (and fortunately there were only a few) it was an isolated incident and not indicative of a major problem within the business.

Unfortunately, disgruntled customers are the most likely people to go directly to internet sites like Yelp to post grievances and create a stain on your business.  (And for some unidentified reason, these are the people who seem to hours and hours of free time.)  Adding insult to injury, the reviewers posting on many of these websites may not even be your customers!  But their comments are a powerful influence on those thinking about visiting your store.  Following are remedies to unwarranted and unfavorable reviews about your business.

Manage Your Online Reputation

To manage your online reputation we suggest 3 actions:

1. Monitor the web so you know when comments are posted about your business.  Pay special attention to local business review sites.   Many of the monitoring tools to do this are free such as Google Alerts or BlogPulse.

2. Assess the comments to decide if they are worthy of a response.  If there are trends, look for ways to address an overall problem so that a comments clean-up will stay cleaned up.

3. Take action on those comments that are worth removing.  Work directly with the website where comments are posted to respond, remove or identify the individual who posted the comments.

Additional Tips:

  • When posting a response to a bad comment remember to use a positive and constructive tone.  Responding in a hostile tone will only make you look hostile.
  • If you have taken steps to remove a problem that was causing poor comments announce it to your customers on your own website or blog and post it on the website where your business is receiving negative comments, e.g., extended return policy for holiday gifts.  Customers will appreciate that you fixed the problem and that will demonstrate positive goodwill about your business.
  • Encourage your satisfied customers to post comments on sites that review local businesses.  It’s better to proactively show the army of satisfied customers versus the minority of a disgruntled few especially if you are a new business and need a groundswell of initial support.

Don’t let negative comments ruin your business reputation — take charge of your online reputation today and make it the best reflection of your business.

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Posted in Marketing, Retail Trends, Social Media

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Make Holidays Easy for Customers

Posted on December 9, 2011 | Leave a comment

A recent article in the Orlando Sentinel states more consumers are turning to on-line shopping for the (perceived) ease of sitting at a computer and ordering gifts to be delivered to their front door.  Consumers sited that they want to avoid the hassles of lines, crowds and parking.

The take-away for independent retailers is that you can capture more sales  by making it easy and fun for your customers to shop  your brick and mortar store.  Yes, the standard of having hot cider is nice, but take slightly more meaningful steps such as:

  • Have wish lists complete for your customers.  The palpable relief on the gift-giver’s face when she hears that he has already picked out his favorite bike accessories, color and size specified translates into fast sales.
  • In addition to the ubiquitous wrapping, offer to ship their packages to out-of-state recipients.
  • Have different price point items so that the customer can pick out the “big” gift and all the stocking stuffers to go with it in one, easy stop.

When customers know their shopping is done, they’ll relax and enjoy the warm and fun holiday atmosphere you’ve created in your store even more.

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Posted in Promotions/Events, Retail Trends, Selling

Point of Sale? Open to Buy? Both?

Posted on December 3, 2011 | Leave a comment
Which one should you have first?

Guest post by Mort Haaz

Because you are a retailer selling ever changing products, you are faced with constant buying decisions on future delivery merchandise.  How much you buy in each product category will impact your sales, your time, and your cash flow.

In order to gain greater control over their business, many retailers are turning to computers to help them develop the answers to almost every retail management question.  Programs are available to help with accounting, personnel,  payroll, etc.

Since your bottom line is tied directly to your buying, software that develops information that will insure proper buying and inventory levels should be the first considered.  There are two types of systems available in the area of inventory control: point-of-sale (POS) and open-to-buy (OTB).  The question for each retailer is: “What’s the difference and which system do we begin with?”.

Not too many retailers really understand the need or value of OTB, but almost everyone has a feel for what a POS system will do.  For many years POS has been heralded as the answer for everything.  A good system will provide many benefits.  A retailer can track sales by item, vendor and category, keep a perpetual inventory, print reports on hot sellers, slow sellers, sales by size, color or any other variable.  Mailing lists can be accumulated, every type of sales transaction handled, merchandise received, and orders written.  All of this information has value, but each retailer must decide just how much information is really needed to do the most efficient job.

For larger retailers, the need is clear.  With a large quantity of sales transactions and inventory items, POS will make the operation much more efficient.  But there are costs in purchasing, setting up and operating a POS system.  There is the obvious dollar cost, but also the time necessary to install the system, mark all merchandise and enter the codes into the computer.  Additionally, retailers have found that even with all the good information generated by POS, buying problems will occur without the guidelines that can only be developed with OTB.

OTB, on the other hand, is a must for any retailer who wants to properly plan their buying dollars ­- no matter what their size.  There are only two known ways for retailers to approach their buying ­- OTB and guessing.  And no matter how experienced you are, if you want to make money and not just get by, you need OTB planning.  OTB will enable you to forecast a monthly buying plan in each category of merchandise 12 months into the future based on anticipated sales and desired turn rates.  The OTB plan, very simply, provides the most important management information a retailer can have.  Using OTB enables you to have the right amount of inventory in the right categories at the right time.  Lean and balanced inventories will turn faster, create more interest and generate greater sales and a stronger cash flow.

So in the great POS vs. OTB debate, the answer should be clear.  Any retailer will benefit from POS and for some it is an absolute necessity. All retailers need OTB, and the sooner the better.

But OTB and POS are not mutually exclusive.  They work well as a team and provide even better information when used together.  POS will track item and category purchase, receipt, transfer, markdown and sales information and then feed information to the OTB system.  In turn, OTB will use this data to plan and control buying to insure correct inventory levels, ever increasing turnover and a positive cash flow.

So, if you have a computer, or access to one, or are considering computerizing your store, your first step should be OTB. OTB sets up in only a few hours and will show where you are over- or under-stocked, over- or under-bought and develops a buying plan for the next 12 months.  This is information that no retailer should be without.  OTB not only gives you immediate answers, but will identify sales trends and adjust as things change to keep your buying on target and your cash flow positive.  OTB pays for itself as soon as it is set up by pointing out over-stocked and over-bought areas -­ allowing retailers to take action to correct and avoid costly mistakes.  More than likely, using OTB will generate more than enough additional profit to pay for the computers and the OTB system, and a POS system as well!

After OTB is set up, POS can be added at any time.  Depending on the POS system and the size of your inventory, set up time will vary.  It could be a month or it could be six months.  I have heard stories of it taking a year or more to get a POS system fully operational.  But however long it takes, you will be buying right and maintaining a positive cash flow during that time by having an OTB system in place.

Like some retailers, after working for a time with OTB, you may decide that you are too small for POS.  Many retailers have made this decision and have chosen to stay with OTB and a competent cash register to keep their buying on target.  For those who want more detailed inventory information as well as the other benefits of POS, the combination of OTB and POS will give the best possible results.  Reorders will be timely and within the OTB plan.  Mailing lists can be constructed and utilized for promotional opportunities.  Etc., etc., etc.

So where do you start?  With OTB!  Then, if you determine the need, add POS.  This will give you maximum control of your buying for maximum profits.  What more could you ask for?

Mort Haaz is president of O.T.B. Retail Systems in Santa Monica, CA. His company markets and supports THE OTB BOOK, their complete open-to-buy software system covering all aspects of the buying cycle is available  through an online subscription and sold with a unique Performance Guarantee taking all of the risk out of ordering.  For more information visit their web site at www.myotbplan.com.
 

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Posted in How To Open a Store, How to Start a Store, Inventory Management

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