Smart buying is a component to a boutique's success, no matter if you are an e-commerce boutique or a brick and mortar boutique. Knowing and understanding your brand, demographic and your customer persona are all key in the merchandise you will purchase, but what about the business of buying? The structure of inventory? With a few tips and structure, you will have the business structure side of your boutique working like clockwork.
What do I need to know?
Open to Buy - What is it and why do I need to know? It is essentially your merchandise budget for your seasonal purchase. An in-depth process of taking into consideration your markdowns + beginning/ending inventory = your open to buy.
Understand your inventory before you start your next buying cycle.
· What are your current inventory levels? Your OTB will help here.
· What is your gross margin? The margin you make on the merchandise after all costs.
· What is your Initial Markup? Understanding your IMU assists with understanding your margin.
· What is your seasonality? Do you sell 65% of your merchandise in the 8 weeks before Christmas? Know your seasonal peaks and valleys.
· What are your sell through rates? How long it takes to sell these items.
Once you understand the mechanics of your inventory, you will want to be sure you have a buying structure in place. It's essential to know your customers and know your products.
· Do you know and understand your customer demographic? Understanding your customers persona determines what you purchase.
· Identify what your product gaps are. Do you sell out too soon or do you not carry these items? Listen to what your customers are asking for or if you are referring them to other boutiques.
· Have you visited a neighboring boutique lately? If you don’t have a personal relationship with the other boutiques in your area be sure to develop one. You don’t want to carry the same brands. Visit their store, have coffee with the owner and when purchasing from a new vendor discuss market penetration in your area. Remember—be respectful, each business owner is very private about their brands and sourcing.
· How well do you know the brand you are purchasing? Can you purchase wholesale online? What other items do they carry? What is their shipping policy? Get to know your sales rep and they are your best business partner.
Product mix is important!
Take the time to know your brand and how to use them.
· Keep track of your brands! Keep a notebook (paper or electronic) on all of the key things about your brand from FOB to fit and color. When you meet with the sales rep you can discuss opportunity. When purchasing you will have this information so you can plan ahead. When training a new team member, you will have all information about the brand. Understand why a brand is better suited for your business needs.
· Do your research. Search online, search social media, be on the lookout for styles and brands you are interested in. Find unique companies that are not already represented in your market.
· Attend markets and trade shows. Depending on which event you attend, there could be cash and carry sections or order writing only. Be sure to do your research before attending.
Markets and Trade Shows
Markets and Trade Shows are great ways to learn about trends, new products, different products and to develop relationships.
· Research travel discounts offered through the event.
· Education, fashion shows, trend seminars and more are often available during the markets.
· Set appointments with your sales people so that they have time allocated to work with you and show you the next seasons offerings, show you and discounts or promotions.
· Know your event map out the must see new vendors, your appointments and your current brands. Time allocation is key.
Planning is your opportunity for success! Knowing what you need,
what you want and where to go will make a buying trip less stressful.
Here are a few of the larger markets and trade shows:
Atlanta : Americas Mart
New York : UBM Trade Shows
Dallas: Dallas Market Center
Las Vegas: UBM Trade Shows