Fair Trade Retail Support Q & A

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 You might find some answers here! These Q & A’s are the result of our online Fair Trade Retail Support Group Q & A Sessions hosted by Ganesh Himal Trading. Kevin Natapow (left), former owner of a successful fair trade retail business in Boulder, Colorado,  and now consultant for Creative Retail Solutions, answers the vital questions from the group. In addition, many of the group participants offer up their valuable experience and ideas. The result is this valuable resource that we hope can assist our retailers to run a thriving fair trade retail business, and as a result, change the world!  Join this wonderful community here ⇒

Navigate via the categories below, or the printable documents per session here:

Q & A #1          Q & A #2      Q & A #3          Q & A #4        Q & A #5

 

  • Kevin Natapow

 

Tracking sales and seeing if it makes the cut- it is a metric based on the % sales for the months you are carrying a new product. You should also do it for ALL items 2X’s year

 

  1. So if you sell 20% of what you ordered of a new product in the first month, 30% in the second, and 35% of it in the third, ect?

 

 

  • Kevin Natapow

 

No, it is your sales curve for a year. E.g. Sept-Dec often represents 50% of annual sales for a typical gift shop. SO if you sold 10 of an item during that time then you know you will sell 20 in a year. divide that by 4 and that is your max and then divide by 2 and that is your min (assuming your store does 4 turns of your inventory annually).

 

 

  • Kevin Natapow

 

This relates to the earlier question about managing seasonal inventory. Again, before placing any holiday orders run a “best seller report” from January- August (typically 50% of annual sales but will depend on your individual sales percentages) by profit and determine which items make up top 20% of sales. Ideally, this report will also have the quantity on hand, so all you will have to do is subtract the quantity on hand from the quantity sold during this time period and then add a bit so that you do not sell out entirely or add a lot extra if you know from history that it is a big seller during the holidays. Also, be sure this report excludes any non-related seasonal items such a spring, valentines, mother’s day items, etc. These bulk up orders can be added to the smaller vendors’ holiday orders but for bigger vendors like TTV, SERRV, Matr Boomie, etc., it is probably better to create a separate bulk order with a later ship date than your holiday merch because the items will most likely not be urgent and not needed to go out with the holiday merchandise. This way you will save yourselves the hassle of too much merchandise coming at once. In terms of how to balance your funds- your OTB (open to buy) is critical in knowing how much you have to spend each month and from there you will know how you want to spend your precious $$$. It is a hard balance because your best sellers are your best sellers and they are what make you $ and increase cash flow. But, you don’t want a gift store in November & December that does not have any holiday merchandise. One thing to consider and do is to run a holiday best sellers report and make sure you are keeping your top 20-30% of seasonal best sellers in stock and as the season progresses, ease back on the seasonal merchandise (especially the bottom tier that aren’t selling as well) and shifting $ to your non-seasonal merchandise. Seasonal best sellers are good to have on hand too as they are worth holding over til next season. Unless cash on hand is a serious issue, you don’t want to be selling best seller seasonal merchandise at 40-50% off at the end of the season- reserve that sale for items you will discontinue anyway or items that are not great sellers. Easy Peasy right???

 

  • Kevin Natapow

 

Balancing inventory during the holidays can be challenging and needs a lot of attention so you are not under/over inventoried. First off, assuming you do item evaluation in August/September and physical inventory as well and have cleaned everything up in terms of what is un-orderable and removed from the floor and all new min/max numbers are set, then your regular all season merchandise should be ordered just as you would the rest of the year. You should also be bulking up on regular items (non-seasonal) from your top 20% of sales by profit in August/September. You should be ordering 2/3 of what you will need for Sept-Dec (typically 50% of your annual sales) and checking those OHQ #’s at the end of October to see if you are above or below forecasts but beyond your bulk up items and seasonal items, all regular merchandise should be ordered as usual. All Seasonal items should be reset so the maximum is 50% of the number being ordered in the fall and the minimum half of the maximum. If/when these come up for reorder you will have to monitor them carefully to not just follow your min/max numbers beyond a certain date. We typically reevaluated all seasonal items after Black Friday and placed one more order for seasonal items based on the formula below:

 

if you sold 10 of something in September – October how many more do you need for November –December? After Black Friday you would run the same calculation but just for the balance of December. You will have to use your sales by month percentages. For our store, monthly sales percentages were: Sept – 5.5%, Oct – 8.7%, Nov – 12%, Dec – 20%. So if you are trying to figure out how much more of an item to order at any given time you use your monthly sales percentages. For example, if we sold 10 in Sept/Oct I know I can sell 70 in a year (10 divided by 14.2%). So I know I should be able to sell 15 more in Nov/Dec (70 times 22%). More or less. It is a lot of math but the most important thing for any small retailer to do is to have exactly the right merchandise at the right time and in the right quantities.

    1. As a former department store buyer and merchandise planner, I’d agree there is lots of math involved to end with right amount of inventory. Keep in mind, however, that there will be customers coming to your store post holiday looking for “deals”. While FT is not mainstream retail, know that a good post-holiday pricing strategy can also fuel Jan/Feb sales.
    2. Good point

 

  • Kevin Natapow

 

Yes they will but you don’t really want to be selling merchandise at cost that you know will sell at full retail the following season. Sales are great for stuff you want to get rid of.

  1. We’ve been having some success with buying deeply discounted items from our wholesalers, selling them at a “discount” for the customer where customer is getting 40-50% off regular price, and we are getting a mark-up between 100-150%. Those are the types of things you can bring in for your post-holiday sale – we’ve been using them to feature in things like summer sale or Black Friday as well.

 

 

  • Kevin Natapow

 

1.7 SKU’s per square feet is the general rule of thumb. For example if your sales floor (not your entire shop sq ft) is 1,000 sq ft you would ideally want around 1,700 individual SKU’s. Again, this is a goal and we often crept upwards of 1900-2000 and would get it back down by January/February to 1700-1800 active SKU’s. Bottom line is if you have 1000 sq ft and 3500 SKU’s you need to cut, cut, cut and carry what sells and get rid of the rest.

 

 

  • Kevin Natapow

 

This would depend on how you set up departments, categories, etc. When you do item evaluation in Aug/Sept and again in January you will want to look at item performance by vendor as well as by category. Clothing is a good example as it takes up a lot of retail space and usually requires a changing room or some sort of additional space for people to be able to try things on. If over all sales of all clothing is not great and they do not show up on your best sellers then you would consider eliminating the whole department or at least significantly downsizing it. The key to any and all items is doing item evaluation. You NEED to know on a bi-annual basis what makes it and what does not. From that you re-set min/max numbers and eliminate products making way for new merchandise that will make you money!

 

 

  • Kevin Natapow

 

YES! Not only should it be done annually but you should do it at least twice a year, in August/September and again in January. This is your chance to do many things:1. Assuming you are doing excellent inventory control (hint hint), physical inventory keeps your computer system accurate so orders and inventory valuation are correct.2. It also when you will discover all of the receiving mistakes that have been made since the last count- i.e. items mis-tagged, wrong price, etc.3. From a bookkeeping perspective, it allows you to determine loss from theft/damages4. On a practical level, it is also a great time to refresh major displays, pull damages from the floor, and clean the entire shop and anything else that may need to happen.

 

Question 4:

Here is another good one that still ties into our discussion on inventory control and ordering- BTW- I LOVE this theme! Could not have picked it better myself.

How many units per style is a reasonable quantity for an initial purchase to really get a feel for turnover? Eg. Buying string dolls- how many string dolls total, how many units per style? Dolls are just an example, could be scarves, bags, pottery, etc.

 

Answer 4:

 

 

  • Kevin Natapow 

 

This one ties in quite nicely with the earlier question about initial min/max selection. String dolls are a good one and I will come back to them. In general, you should consider most items as an individual SKU and evaluate it on its own merit but if you have, for example, 10 scarves from a vendor that are all the same item- i.e. “whoop-dee-doo scarf” but have 10 different colors. I would still keep them as 10 separate SKU’s but consider them in terms of their sales performance in the greater context. So, when doing item eval they may just make the cut in terms of qty or $ sold or even be just under your thresholds, but you may want to still keep the item(s) based on how they do as a whole. On the other hand if 7 out of the 10 are amazing sellers and 3 barely make it, drop those 3 and keep the 7 that rock. Additionally, ask your existing or new vendors for their best sellers of any given product before placing a new order and many vendors, if you ask them nicely, will grant you an “allowance” on new items or new orders to get more colors/styles then you may usually carry with a 2-3 month trial period. Meaning, they will allow you to see what colors sell best for you and exchange some of the colors that do not go over well in your shop for credit to buy more of the ones that do. It is usually a 1-time deal and has a mutual benefit. Getting back to string dolls, I would not necessarily keep them as individual SKU’s and have them as an item that when placing orders (we did this with zulugrass necklaces) you take a quick look and see if you have any crazy overabundance of a certain style or are completely out of one you know is a great seller. With zulugrass, we had a chart inside our vendor folder with all the colors we carried and I had an employee decide, knowing we needed 200 necklaces, what color distribution to allocate to various quantities. You really don’t ever want just 1 of an item, unless it is really expensive, so picking new items is always a bit of a risk. See the guide in the discussion on picking reorder points for initial orders as a guide and it will help.

 

  1. So, for you, the zulu grass necklaces were only 1 sku?

 

 

  • Kevin Natapow

 

Yes- with about 15-20 variations but we rung them up as 1 SKU

 

  1. I remember having trouble differentiating between a SKU (an actual ITEM) and the variants which all have different BARCODES in our system

 

 

  • Kevin Natapow 

 

SKU is what rings up when you scan the barcode- it is a unique item in your inventory. Some systems can take an “item” and create variations and print unique barcodes but they should be then considered separate SKU and ordered accordingly.

 

  1. Good Paper (or other) greeting cards: each type its own sku, or one sku for “Good Paper greeting card”?

(In our system, one sku. Thinking about splitting them up for reordering. Should we?)

 

 

  • Kevin Natapow 

 

Good question- YES YES YES

 

  1. I find it so much easier to do reorders if I have every variant as a separate sku.

 

  1. M’kay. I was heading that way but you threw me off with the zulugrass necklaces being all one thing. Maybe ’cause I’m not familiar with them. (smile emoticon)

 

  1. Even with the colors of necklaces, I would have a hard time tracking which colors do best if they didn’t have separate skus.

 

  1. I like having everything be individual skus ’cause I’m often crunching numbers or working on reorders from home where all I have to go on is what’s in the computer – can’t look at the shelf and see which card is which.

 

 

  • Kevin Natapow 

 

It really is the only sane way to do it. A note though, for something’s, i.e. Andes Gifts, it will create tons of SKU’s in your system, which may put you over your target 1.7 number. In that case it is ok to consider them in your mind as 1 SKU but have it in your inventory as many as there are for doing item evaluation.

 

  1. btw……LOVE andes gifts!
    And in my system I enter ANIMAL HATS as one SKU – say its AG-001
    But then the computer can either generate separate “barcodes” for each variant OR I can type in the barcode that is on their tag if I am reusing it. 
    Zebra – 123456789
    Panda – 22345677
    Tiger – 334567888 etc. 
    This allows me to evaluate the SKU “Animal Hats” but also allows me to evaluate each style of hat. Which one sells and which ones don’t.

 

  1. I’ve got my turnover spreadsheets set up so that I can group items together semi-automatically (“all Ganesh earrings between $19.40 and $26.10”) for instance and consider them as a single group-sku. 

    Did I mention the bit where I love math? Also spreadsheets. Spreadsheets are like video games. Mmmmm.

 

  1. Does that sound right to anyone else or am I completely doing this wrong?!?!?!?!

 

  1. Remind me what POS you use?

 

  1. I use Shopify – some loves, some not so much. Changing and growing – so glad they just announced an easy free app to connect to my Quickbooks rather than PDFs etc etc – another conversation.

 

 

  • Kevin Natapow 

 

Not sure if I fully understand how your system does that but bottom line, you want to be able to assess each items performance at any given time and decide to keep, discontinue and adjust individual min/max for each item. Zebra hats might be the bomb one year and not so much the next so you will want to be able to adjust your min/max seasonally to account for that.

 

  1. Quickbooks POS or vanilla Quickbooks?

 

  1. I do not use Quickbooks POS – i use QB for accounting purposes only

 

  1. I have a question – prob. a new post if anyone is interested – about the new October 2015 EMV requirements

 

  1. Yes, EMV requirements – good topic!

 

 

  • Kevin Natapow

 

See new thread (below) for EMV requirements

 

 

  • Kevin Natapow

 

Somewhat… below is a general guideline for choosing initial mins/maxs for new products you are bringing into your inventory mix for the first time. Just a quick reminder that your goal is 1.7 SKU’s per sq ft of retail floor space so if you have 1,000 sq ft you should have only 1,700 active SKU’s in your inventory. So, assuming you are eliminating and underperforming or discontinued item and bringing in a new one, here is a guide for setting the initial numbers:

 

Retail price: Min/Max:

$1 to $5 6/10 (max will not always be 2X’s min early on)

$5 to $19 2/4

$20 to 29 2/3

$30 up 1/2

 

Again, all of this information is critical for ongoing item evaluation. If you set your initial min/max numbers but never adjust them to reflect actual sales, you may as well not put them in at all and save yourself the time. Item evaluation of all new items on a two/three month cycle is important to ascertain success of new items selected and to reset initial min/max numbers. The more months of sales history used in reviewing a new product the more accurate the min/max will be but at the two/three month mark (depends on your review schedule) you will enough information to generally give you an accurate and workable picture of a product’s potential annual sales and reset your numbers. There will be the occasional hot new item that should be updated before the early reviews. However, avoid the urge to constantly be reviewing outside of the two/three month parameter. When auto-generating orders on existing inventory, do not change a quantity on the purchase order arbitrarily. If you believe a product is outperforming its min/max designation review it using the established monthly percentages, change the min/max and let the computer do its job of adding it to the purchase order.

 

  1. I need to cut and paste this in a doc and get out my ruler I just boarding my flight home from NEW YORK after an amazing gift show. I need to rethink some things I bought. When you refer to SKU’s I think you items not specific colors?

 

 

  • Kevin Natapow 

 

If an item comes in 5 different colors than it should be 5 different SKU’s, but see my note about Andes Gifts and other items where you can put them in your system as individual SKUs for inventory control, tracking and evaluation, but consider them 1 SKU for your overall SKU count or SKU’s per sq ft

 

  1. To make sure I understand, when placing the initial order, you’d get the max # of each sku?

 

 

  • Kevin Natapow 

 

Yes and set the min so your system will reorder as soon as you hit it

 

  1. Got it.

 

 

  • Kevin Natapow 

 

You always order the max when reordering

 

  1. Order the max, or to bring qtys up to max? Max is 10, min is 6. At 6 I reorder – do I get 10 (so there are now 16) or 4 (so there are now 10)?

 

 

  • Kevin Natapow 

 

You get back up to your max so you would order 4

 

  1. Roger roger.

 

 

  • Kevin Natapow 

 

Just a reminder copied from below, “There will be the occasional hot new item that should be updated before the early 2/3 month new item reviews. However, avoid the urge to constantly be reviewing outside of the two/three month parameter. When auto-generating orders on existing inventory, do not change a quantity on the purchase order arbitrarily. If you believe a product is outperforming its min/max designation review it using the established monthly percentages, change the min/max and let the computer do its job of adding it to the purchase order.

 

 

  • Kevin Natapow 

 

The key is to make sure your mins/maxs actually mean something! That is just all math (smile emoticon)

 

  1. I (heart emoticon) math.

 

  1. Shipping is a HUGE cost for us (yay Canada) so it isn’t feasible to top up just a handful of items if there isn’t more from the same supplier that we need – that handful will no longer be cost effective if they have to carry the burden of shipping costs alone. Suggestions?

 

  1. Kevin Natapow 
    In your situation you would come up with a min/max formula that takes into consideration your shipping costs and time. It usually requires more cash on hand to be slightly over inventoried at any given time but ultimately will save you in the long run on shipping costs

 

  1. That’s what we’ve found. And when all else fails, we throw in extra jewelry! (wink emoticon)

 

 

  • Kevin Natapow 

 

Yes- but only order what you know is a great seller- you want to be over inventoried on the items that turn faster!

 

  1. Thanks Kevin

 

  • Kevin Natapow

 

HUGE- many of you who have seen my presentation at FTF or elsewhere know that I put a huge emphasis on location (50% of your success) but that should be an easy one, which is another discussion. Customer service, and inventory control, which plays heavily into your customers overall experience are much more challenging as they are ongoing and represent about 10% and 25% of your stores success respectively in my book. As small independent retailers our challenge is to create a unique identity for ourselves, perfect the customer service experience, and find awesome merchandise thaQuestion 1:

t attracts, and fosters, a loyal customer following. A recent survey of 2,000 consumers showed that 83 percent were willing to spend more on a product or service if they felt a “personal connection to the company.” We all know this to some degree but the belief that the products we choose and the artisan stories alone will sell the product is not true. We have to create that amazing “wow” experience that makes our new or existing customer want o keep coming back because of their experience, not just the fair-trade factor. In addition to an outstanding customer service experience, you have to maintain excellent inventory management practices to further capture that customer loyalty to your brand. Inventory management protocols keep stock moving efficiently through your stores, without overstocking and tying up cash. Ultimately, you’ll increase sales (upwards of 25% if you are not doing any inventory control measures and do it diligently going forward), maximize profits, improve customer satisfaction, and develop that unique identity that customers can remain loyal to. Some quick examples of how inventory mismanagement can affect the customer experience and subsequently sales are that too much inventory can lead to excessive discounting, which will eat into profits. It can also overwhelm your customer with too many choices, which studies have shown lower sales. Conversely, not carrying enough inventory results in missed sales opportunities, leading to lower revenue and dissatisfied customers. So yes, customer service is hugely important and I do a lot of work with clients on an efficient and effective hiring process, training procedures and protocols, and ongoing employee/volunteer management. All of which give every customer a top-notch experience, but again, doing inventory control is hugely important for the whole customer experience. You can have the best-trained employees in town, a top-notch location, but if you have the wrong product mix, in the wrong quantities, at the wrong time, you will lose that customer loyalty and see your sales drop. A recent study showed that worldwide, retailers collectively lose an estimated $800 billion a year due to mistaking low sales for low demand, making it one of the more damaging, yet preventable, issues facing retailers.

 

  1. Very interesting! I have never thought about the important relationship between inventory control and customer service!

 

  1. Having trouble reconciling “don’t overwhelm customers with too many choices” and “have XXX # of skus per sq ft”. 

  2. Don’t remember what XXX was, it came up last time, but it was more than we have, and already people exclaim about how much there is to see and how many choices they have. They say it like it’s a positive thing, but as often as not people who say that don’t make a purchase.

 

(Mind you, we haven’t broken down every style of each product into its own sku. Working on it!)

 

  1. It is a very interesting correlation – that if you don’t have the right inventory “mix” your customer won’t be satisfied when looking in the store for a purchase.

 

 

  • Kevin Natapow

 

As you all know, customers are a finicky bunch! The goal is to get it just right and studies show that too much overwhelms them and too little bores them. The goal is 1.7 SKU’s per sq ft which I will discuss in another question but that is a number that for store like ours is a good balance. The goal is to be close to it.

 

  1. And just to confirm the #SKUs per sq foot increases for Holiday to What?

 

  1. This is great info Kevin, and good stats.

 

 

  • Kevin Natapow

 

Inventory control is all about having the right merchandise (sells) in the right amount (min/max) of merchandise at the right time (seasonal). If you don’t control these factors your customer will tell you with their dollars by not spending them there!

 

 

  • Kevin Natapow 

 

It is not necessarily an increase in the # of SKU’s as it is an increase in inventory. You will see an uptick in overall SKU’s but SKU’s per sq ft includes all active SKU’s, even if they are only seasonal. You may have items that are spring/summer/easter/valentines, etc that will not be on the floor on actively in your inventory but now autumn/holiday are. You will have more of everything because most shops will do 50% of annual sales between Sept-Dec so you need the inventory $ to make those sales.

 

  1. SO would I order more quantity of those best selling SKUS or always follow the min/max – Some items I cannot “reorder” during say November or Dec.

 

 

  • Kevin Natapow

 

EVERYONE should be doing a fall/holiday bulk up order- run a bestsellers report for non-seasonal items and order everything you are going to need for sept-dec of those items and ignore reorder points for them.

 

NEVER run out of your cash cows!

KEVIN: What is most important is to see how each SKU does on its own merit, but it is good to have home accents, jewelry, accessories, bath and both, food, music, cards & stationary, kids clothing and toys, books, etc. You do not it much more broad than that and you should pay attention to how departments do overall when you do item evaluation but don’t get stuck on the departments. Most of our shops are too small to really think about “departments” but it definitely helps in categorizing items and creating open to buy (OTB) based on holes you need to fill. It can also help control your buying in departments where you don’t need to be doing buying and keeping your SKU count under control.

 

(2) “Open to buy”?

 

(3) Accessories are ALWAYS best sellers!

 

KEVIN:  How much you have to spend on a monthly basis which is determined by your current inventory valuation minus your needed inventory valuation for the following 3 months of sales (assuming 4 turns).

 

KEVIN: When you say accessories, do you mean bags/purses? scarves? jewelry? what else?

 

(6) How do you determine what you need for the following three months if you don’t have any history to go on? We’re finally coming up on our first anniversary but even so this summer won’ be anything like our start-up summer.

 

(7) We lump all the above in one group — but jewelry & scarves are the largest portion of that

 

(8) we defined accessories as purses, scarves, headbands, etc but kept jewelry separate.

 

(9) My prior inventory only allowed 6 categories, and I’ve never broken it down again. 

(10) If you don’t have history that is hard but use your previous 3 months and anticipate as best you can what the next three months will be like based on other retailers sales curves or sales curves from your chamber or other local biz orgs.

 

(11) We’ve got jewelry on its own, bags and scarves are subcategories of accessories, and then everything else (headbands, hats & gloves, belts, etc) just falls under the main “accessories” heading.

 

(12) I’ve been adjusting our categories now that we’ve got several months of business under our belts. I started with broad categories (home dec, accessories) and then broke out anything that represented a very large portion of the category into its own subcategory. Hence the bags & scarves in accessories, and baskets and pillows as two of seven subcategories within home dec.

 

(13) Love the idea of getting stats from local biz orgs & chamber. As someone said recently, folks outside of the FT sector aren’t as inclined to share this kind of intel, but there might be some aggregate data available.

 

KEVIN: you don’t need their actual numbers, just their sales curves. Local biz orgs should have that data too from the retail sector just make sure you are comparing apples to apples.

 

(15) I’ve even broken Jewelry into subcategories (Necklaces/bracelets/earrings/rings/other). (One funny caution – when we first got our POS system and were printing labels, our POS would ‘truncate’ our categories, so many of our labels came out printed ‘Jew’! We manually fixed it but it lead to some interesting conversations). 

KEVIN: In terms of product mix, you always want to try and have something for everyone. Maybe you don’t carry clothing or some specific thing but it is good to have home accents, jewelry, accessories, bath and both, food, music, cards & stationary, kids clothing and toys, books, etc. Keeping things fresh is not so much a matter of scope of products as it is doing ongoing inventory control. Remember that 1/3 of your SKU’s will likely not make the cut on an annual basis. If you are evaluating new items as they enter your inventory (2-3 months review to set accurate min/max levels) then you will know right then if it makes it or not. If not move it through and make space for new items. Plus if you are doing item eval 2X’s year (which you should be) you will be eliminating a lot of items thereby leaving room for new items to refresh the look of your shop. For a 1000 sq ft shop you should be bringing in 500-600 new items a year!

(2) That’s part of the challenge and fun to find new products!

(3) I find it extremely challenging to keep finding new item. I have my favorite suppliers, but they don’t always come out with enough new items. I feel like I’m always looking for new suppliers.

KEVIN: There are SO many new items all the time- my wife kept folders by department of new items she wanted so when we did item eval and old items came out she just pulled the folders and generated new orders from those (great way to keep your SKU count down)

It is not unreasonable to have 40-60 vendors to choose from- so many good ones out there!

(6) Ahhh…I need to bump up my vendor base. Got it.

KEVIN: Contact me and I can get you a good list to work from!

(8) Much of our popularity as a wholesaler rests in our wide variety.

(9) We have some niche vendors from whom we get just a few items, but we’ve also got two or three biggees from whom we get a bunch of different things. Ganesh is at the top of the list!

(10) Ganesh Himal is one of our best/biggest vendors after villages too grin emoticon Love it. And more importantly, the customers love it!

(11) We can’t order from Villages. At first that seemed like a real handicap but in the end I think it sets us apart, so it’s all good.

(12) will also be emailing for your vendor list! Always looking for new groups to ‘keep in the wings’ so to speak (we’re a villages contract store so we’ve got a whole different sent of parameters and random complications in terms of working within their POS system and getting sent ‘new items’ that we may or may not always want. What do you have to do to sell TTV product by the way? I don’t even know)

(13) You have to be in the US. The Canadian branch isn’t taking on new wholesale customers.

KEVIN: You CAN easily do a FT shop w/o TTV!

Yes, please, Kevin – would love a copy of that vendor list as well!

email me at kevin.natapow@gmail.com and I will get it to you

(1) I do, but I there’s still tons that I don’t know. We bought it with the store, and sometimes I’m totally confused. I’ll try to help if I can, but can’t promise anything. I think I know just enough to make a sale and put inventory in. Reports are a total mystery.

(2) Heh. I’ve been using QB for POS for years now, but don’t have the actual POS component of the software. I’m trying to figure out which reports will (help me?) calculate sell-through, turn around times, etc. I’m also curious whether anyone who has the POS component could comment on what it can do that regular QB Pro can’t.

(3) If *I* can help you, let me know! We may be an example of the blind leading the blind, but at least we’ll have company?

(4) Are you referring to QB POS? There is the financial software and they also have a separate POS Program (http://quickbooks.intuit.com/point-of-sale-systems/)? If you are talking about the POS system I used it for 7 years and am quite well versed in it and would be happy to help in any way. There are limitations to it but there are also some great work arounds and tricks for being able to maximize inventory control.

(5) Not the POS program, just plain old Quickbooks Pro. We’ve been using it for our “POS” (using it to track inventory, do sales receipts/returns, etc.) and have been very satisfied with it so far.

Now I’m wondering how to get it to tell me the stats I need to calculate sell-through and all the other numbery bits needed to implement your inventory control advice.

(6) Also, we have the non-subscription form of QB and I’d very much like to stick with that rather than the online subscription version.

(7) Quickbooks financial is not suitable for POS and tracking inventory. You really need to get their POS (or another retail POS program) to be able to measure what you are seeking to do. QB Pro is VERY limited and really does best as a back-end business tracking- money coming in and money going out…

(8) We’ll look into a separate POS system but in the meantime it’d be nice to know how to get these numbers out of our accounting software. If anyone knows how to do so, I’m all ears.

(9) We use the QB POS, but Sage Peachtree for accounting, so have not integrated them — quite happy with the POS, though

(10) Do you have the desktop or online version?

(11) Desktop

(12) It’s a flat fee, yeah? Not a subscription?

(13) yup — you get free ‘help’ for a year, and then have to pay for that, but after one year almost all my questions and problems were worked out, and when I DID have a problem, I called and they gave a month support to answer the questions I had and now nothing more. We’ve had it since 2012

(14) we have QB Pro too. If you have very descriptive SKUs and are meticulous with your sales receipts, you can use the built-in sales reports to track how various SKUs do. We export the reports to Excel and then have to monkey around a bit to get the numbers we want. Sorry I’m not being more specific, I’m away from the software right now. It’s not as good as having a true point of sale system, but it allows us to measure margin and turnaround.

(15) that’s *exactly* what I need! Are you up for further consult sometime?

(16) A MATCH!

(17) I’ll get back to you when I have QB in front of me. It’s clunky but you can make it work, and I just can’t spring for a true POS right now.

(18) I use QB too and am believing I need to upgrade to a version with more capability.

(19) You have QB POS and they are talking about QB Pro (financial). You could be a good advocate for getting a POS system!

(20) it’s really confusing — our version of QB POS is also a pro version!

(21) There is a Pro POS version but QB financial is VERY different from their POS software

(22) Yup — I’m sure!

KEVIN: Ideally you want to have around 1.7 SKU’s per sq ft in your shop so if your retail space is 1000 sq ft you will want 1700 SKUs. In terms of an initial order you never really want to order just 1 of an item so if the retail price is $20-40 you will want at least 4-5 but what is most important is to do ongoing item eval for all new items (2-3mos) so you can reset your min/max based on actual sales

 

KEVIN:  Bottom line is you do not want your shop to feel cluttered that is why you want to optimize your SKU’s and only have ones in your shop that make you money!

 

(3) The sku per square foot ratio is hard for me to visualize. But this all reinforces your bottom line from last time: ditch the stuff that’s not selling and stop holding out

 

KEVIN:  You should not have to visualize it  Your POS system should do it for you. Take your retail sq ft X 1.7 and that is how many SKU’s you should have. Compare that to your active item list and see what the difference is. If you do Item eval my guess is you can get that # down in a strategic plan that will not hurt you too much financially and give you space to bring in some best sellers that will make you $$$$

KEVIN:  You want to be sure you have a POS system that gives you plenty of data points to enter in all of the necessary data for properly tracking sales of every individual SKU in your inventory. You will need: your item number, vendor SKU, item description, country, artisan group, size, color, season, month received (critical), cost, sets (when applicable), retail, etc.

 

In terms of your description, it should match your item as best as possible. If you get the colorful cord bracelets and they come in three colors, you will have three SKU’s all with the same item description, same artist group, but a different item number and vendor SKU. Even if the vendor uses the same SKU for their SKU you will put XE-214-THT (Blue) for the blue one and same code plus red for the red one. That way you can track how each SKU does and your vendor is not getting confused by what you are ordering.

(1) This is a very personal choice. I am not a huge fan of sales or sale sections. Most of us are operating in small retail spaces (500-2500 sq ft). Our goal is to do as much in sales per sq ft as possible so every sq ft is critical to maximize sales. On an annual basis you can expect (with a well run inventory control system) to get rid of 1/3 of your underperformers on an annual basis. Assuming you have a good positive cash flow (which you should if you are doing inventory control) you should be able to pull underperformers on a monthly basis, eat the cost and bring in new items. I think it is OK to do after “season” sales- i.e. holidays, spring/summer, valentines, easter, etc. Again, evaluate sales for those items, pull the ones that don’t make the cut, and put those on sale at 50% off. If an item makes the cut and you will carry it again next year, put it in a box and get it off the floor and make room for stuff that will sell. It is OK to hold over seasonal merchandise so long as it is a good seller and you will buy it again next year.

 

(2) So when you say “get rid of under performers” you are saying 1/3 of your inventory may prove to under perform, and put those on sale at 50% after x amount of time?

 

(3) you should be doing a full item eval 2X’s per year and pulling all under performers then and any new items should have 3 months to make the cut and you can either give them a 2nd chance (not likely) or get rid of it to make room for an item that WILL sell.

 

(4) and how do you get rid of them? Donate?

 

(5) We donated to a local thrift store that supported a local wildlife sanctuary- they LOVED us and sent lots of customers our way.

 

(6) We also donated Jewelry to Dress for Success

 

(7) Kevin, this is a difficult one for some of us smaller retailers with little foot traffic. I know Candy says the same thing as you are saying here… but I have so many things that won’t sell for a long long time because I just don’t have the foot traffic. Perhaps I’m carrying too much inventory then?

 

(8) Your bottom 1/3 can be moved out over time. I have great strategies for doing this but if it is a 0 sales item- get rid of it! Slow movers can be phased out over a 6-9 mos program to slowly move things out, get your cash in hand and buy BEST SELLERS.

 

(9) I’d also be interested in the strategies you use to move the bottom third along if you’re opposed to sale sections

 

(10) Break your 1/3 into thirds based on your items sold report. Take the bottom 1/3 and get them OFF your floor, the 2nd third, give them 3-6 months before removing them, and the top 1/3 give them 6-9 months. This will take longer if your bottom 1/3 is closer to 1/2 of your inventory.

 

Final Comment:

 

Also, selecting the right merchandise and keeping it fresh is what keeps your customers coming back in. Do VM moves monthly- major ones seasonally and DO inventory control. Get a POS system that works for you and use it to the max. It will make your life SO much easier and boost your sales big time.

 

Responses:

 

It was good being reminded that inventory control follows right on the heels of location in terms of importance. Booting the bottom third & being strict about it to keep things fresh & appealing. Needed to hear this!

(1) There are so many good programs out there. I have a great “shopping for POS systems handout that will help you ask the right questions when shopping for one. You can go very wrong though so don’t go cheap and do your research. There are a lot of good cloud based systems out there but you also really want something that live son your computer at the shop. Most importantly you want a system that is robust enough to be able to customize item data, reports and inventory so you can do the right inventory control measures necessary for your store to be most efficient. If you system is not able to give you the data you need or the reports you need to effectively evaluate the performance of your inventory than you will not have the right quantities at the right time to maximize your sales potential- THIS is makes gives you a positive cash flow and will make your shop profitable.
Artisan POS
Lightspeed POS
ERPLY
Quickbooks POS
These are a few good POS systems to explore and see if they are the right fit for your operation. The main difference these days are programs like Artisan POS and Quickbooks POS and ones like Lightspeed and ERPLY is that the former are software programs that you pay license fees for up front and have to upgrade annually or at least when the version you have sunsets. They are a big chunk to bit off for startups and stores that have tight cash flow. The later systems are monthly fees that can be cheaper at startup but can end up costing you more in the long run depending on various factors. Bottom line- you NEED a good POS system and consider any cost for one the cost of doing good business.

 

(2) Are any better than another for both online and in store POS systems that are integrated?

 

(3) Lightspeed is a good one- ERPLY is good too. Talk to Sam Carpenter at Global Gifts about ERPLY.

 

(1) This is always a bit of a touchy subject. There are many shops that ONLY buy from FTF or WFTO members and I think that is great. Many shops are also part of small communities that have strong independent local artisan populations. I personally don’t see anything wrong with a hybrid shop that sells both fair trade products as well as products from either local artisans or domestic artisans. Depending on how your structure your shop and what your product mix is you may run into some identity issues but nothing that can’t easily be overcome. If you do more “art gallery” for the local products, especially if it is consignment, you may also have some issues with how you evaluate inventory and maintain your inventory control systems. There are work arounds for everything and you could easily keep the two inventories separate in your system and evaluate them independently based on different turn cycles.

 

(1) Some POS systems allow you to do this but they tend to be the more advanced ones. I am kind of old school and think there is great value in literally counting every widget in your shop. It is your bi-annual chance to find items that are damaged or mis-tagged and allows for a good system for checks-n-balances to make sure you are getting accurate counts. With all hands on deck it should take you 6-8 hours.

 

(2) Not sure how that can work. Did a handheld scanner of our inventory on January 2, and it took 13 hrs!

 

(3) We counted all 2K SKU’s 2X’s a year and started at 10am and finished by 6pm with double counts of all items that were way off. Then we spit-shinned the shop- another great excuse to close for a day in January/August.

 

(4) Did you put them on a count sheet tally and then manually enter them?

 

(5) Yes– our POS system created count sheets by department (or any way we wanted to sort them) and told us what we should have and then a blank line for what we actually had. At the end of the night we went through the system and did the update.

 

(1) Again, you will just have to test your market and see what it can bear. Our store, Momentum started out with the same goal and we had to over time move our price points down. We still maintained a higher than normal avg price point and higher-end level but had to respond to customer demand. On an annual basis about 1/3 of your products will not make the cut and will have to be moved out. Experiment with what YOU want to carry and DO inventory control and you will know in real time if your store can maintain that level. For example a 1,000 sq ft shop, with 1,700 SKU’s in their inventory, will bring in about 500-600 new items every year, leaving your plenty of room to experiment a bit with new trends, styles, etc.

(1) In fact, all items can and should be more than keystone. Talk to your vendors too and find out their SRP. For example, Minga, Mr Ellie Pooh and Costello recommend very high margins on many of their products. Be realistic about what your market can bear but always go for above keystone (52-58% margins) for most products.

 

(2) Food? Talking to Equal Exchange I’m told it’s expected to be lower?

 

(3) Yes- food, bath and body, candles (usually) are closer to 40% and not much you can do about those. But most “gift” products should be above 50%

 

(4) Bath/body/candles too!! Had no idea, good to know
(5) usually…was for Alaffia and some other B&B products w

 

  • Kevin Natapow

 

That is a tough one- as a former retailer I know that we want to get our merchandise in as quickly as possible and be able to make those critical sales not only for our own store, but for our great wholesale partners and ultimately the artisans. Something that may be helpful is a direct email/update to your retail partners with a photo essay type format so they could really see what things looked like before in terms of production, capacity, etc. juxtaposed to the reality now. It may help them understand the severity of what is happening there. Also, maybe getting pre-orders in early (too late now) so that the artisans, and all along the supply chain would have as advance notice as possible. This is also something I am working on for the regular season as well with wholesalers and retailers.

 

  • (Ganesh)

 

This is a good idea. I try to communicate conditions on the phone with people, but an image, when available may be helpful.

 

  • (Ganesh)

 

Good advice. We do have an advance order system and it is really helpful to the producers but not every customer takes advantage of that so I think we will emphasize that more in the future.

    1. I’d like to say, as a retailer and your customer, I get and appreciate everything you and your team are doing to help the people in Nepal. If I ask about a status it’s because I don’t know and am trying to plan spending. Some sites will show an item as unavailable, I don’t know if you have that ability. Or a message when we log on.

 

  • Kevin Natapow

 

Just like any relationship, communication is key smile emoticon

 

  • (Ganesh Himal)

 

Thank you, I will definitely look at that on our website and show items as unavailable. That is great. I am hoping that people are reading our newsletter too so that they are staying informed on current situations there. Please let me know if there is a better way to help communicate! Please always ask about status too! We need to hear that!

    1. I agree! I myself tried to order sari placemats this week and got the phone call that they weren’t available – which I totally understand! But I had no idea. If they could show up as out of stock in the online store that would be helpful but even more helpful would be a quick print out or explanation that we could share with our customers. Our customers know and love the sari placemats, so they want to know about the artisans and how they are coping after the earthquake. In some cases it has prompted a great conversation about how to donate to help the specific artisans that we work with!

 

  • (Ganesh Himal)

 

Really good feedback- thank you! We need to inform everyone of the blockade that India has on Nepal borders as well. They are not allowing in any petrol, cooking gas, thread….etc. It is crippling Nepal.

 

  • (Ganesh Himal)

 

I am curious, if you saw an item as unavailable would you still back order it? Or just skip it all together. As much as the delay is a pain our producers… and us…rely heavily on backorders and knowing what you need.

  1. I would back order
  2. Kevin Natapow

Backorders are key but retailers also need to keep an eye on them this time of year as you don’t want them to go to far beyond a certain date if they are seasonal items or you placed an order for more (a bulk up) for the season but won’t need that many in January/February.

 

  • (Ganesh Himal)

 

Very true Kevin, I try to ask our customers especially this time of year if they want something back ordered or not.

    1. I would back order but it would be helpful to know right then what is out so I can make some thoughtful substitutions.

 

  • (Ganesh Himal)

 

Great feedback, thanks!

  1.  I feel like GH is one of my best vendors when it comes to back orders. You guys are very prompt and thoughtful
  2. Kevin Natapow

I second that!

    1. Backorders can be hard to keep track of. If it is something I’m counting on I likely would want to be in line for it. If it’s seasonal I probably wouldn’t.
    2. Same here! I always appreciate getting GH back order calls and suggestions on what else might work!

 

  • (Ganesh Himal)

 

Thanks! Good to hear that positive feedback

 

  • Kevin Natapow

 

I have a good system for keeping track of backorder– email me!

 

 

  • Kevin Natapow 

 

This is always going to be a bit of a subjective issue. For whatever reason, many of us independent retailers are not members of one or all of that many fair trade governing bodies- WFTO, FTF, etc. This is not necessarily a bad thing. Many shops choose to carry products from local artisans whom they know and trust and are likely active members of the local community. Some retailers choose to carry handmade products from domestic producers/artisans whom they know and have vetted to follow guidelines that are in line with fair trade and fair labor standards. Bottom line is that you as a retailer have to believe 100% in what you are doing and also have the support of the community that supports you. Openness and transparency are expected at every level of the fair trade supply chain and should apply equally for products, vendors and resellers of any product that is being promoted as being on that same or higher level. In terms of the Fair Labor Assoc and if they should be used as a yardstick that is hard to say. If you look at the list of participating companies on the site, many we KNOW are NOT following the standards they have signed on to- Nestle is listed, as is Nike. I think it is our duty as retailers to do our own homework if we feel like something is not up to par. If we choose to carry items that are not FT certified or approved by some reputable FT body we HAVE to do our own work to decide if it fits within our mission and org values. It is extra work but necessary if we are going to continue to improve the lives of all individuals involved in the fair trade world.

 

  1. I know the session is over – but I just attended NYNOW. There is an amazing “wing” of many fair trade global/handmade products. Some wholesalers who are FT certified chose to be in other sections – Home, or Living or something else. (Broader market for them.) BUT there were many many amazing “fair trade” wholesalers with amazing products who follow FT practices, promote themselves as FT but do not have certification, cannot afford the certification, etc. Some are new wholesalers – 4-5 years old. Thoughts on those? Is it THAT expensive for the wholesalers to be certified.

 

 

  • Kevin Natapow 

 

Check out the 4th question in the Q&A archives section: https://ganeshhimaltrading.com/faqs/

 

 

  • Kevin Natapow 

 

I also shared with a bunch of you in one of the earlier sessions a questionnaire we used with wholesalers that were not FTF, WFTO, etc for one reason or another and made our own call based on their responses and openness to discuss and share with us more detailed info about their relationships, etc.

 

  1. So many were saying they can’t “afford” the certification fees. Anyone know what they are?

 

  1. Curious to know who the FT exhibitors at the show were, so went to the website to see if I could tell. No “fair trade” in the drop down menus that I can see, but I get a sizable list when I put “fair trade” in the keyword search. Does it look like it’s complete, those who were there? http://www.nynow.com/the-market/exhibitor-list/

 

  1. The FTF and WFTF had a printed list at the show – it is in the store and I can scan it in tmrw. Of course, their list is only the Certified members. I was planning to post a list of some other goodies I found.

 

  1. Lists are here: http://wfto.com/news/wfto-members-ny-now-15-19-august
    http://www.fairtradefederation.org/nynow/

 

  1. FTF and WFTO members are “verified” (certification refers to commodities). In addition to referring to Kevin’s questionnaire, check out the applications for FTF membership: https://www.fairtradefederation.org/…/application-forms/ People should be able to answer these questions if they are indeed committed to fair trade.

 

  1. FTF works really hard to keep dues low, so that we can support small fair trade businesses – membership dues start at just $250/year and scale up (SLOWLY) depending on annual sales. And I am committed to running a lean organization! (Costs and benefits of membership here:www.fairtradefederation.org/benefits.) It is true that there is time involved in the application, but we have great staff here at the FTF office who can help applicants navigate the process. Many retailers who wish to buy from non-member wholesalers simply ask the wholesalers to answer the FTF application questions anyway – it’s that kind of transparency that is the mark of fair trade practices, and is what makes the fair trade community so impressive!

 

In relation to dealing with vendors who are not FT “certified”- This is a doc from FTF that may be helpful in determining dues cost. I don’t know if this is specific to retailers (it does not say it is) but you would also have to know your wholesalers annual sales. Many vendors have told me they just don’t have the time to go through the process- not just the money for them… http://bit.ly/1MV5oP8

(1) This is a tough one- I think this is where you need to use your best judgment and do some research on why they left? We carried products from non-FTF members but rarely from ones that were but let their membership lapse for one reason or another. Do your homework, have a discussion with them and use your best judgment.

(1) Yes!! Interested in this too. We’ve tried to work directly but then came up against customs/ import complications /communication issues..which I guess is one of the benefits of working with domestic wholesalers :}

 

(2) We tried it too and only found a few groups (Batsiranai, AYNI, NEW Sadle) that were worth working with directly. We decided we wanted to be great retailers and that it was too much to do both. There are so many great wholesalers out there there really is no reason to reinvent the wheel, unless there is no outlet for their goods.

 

FT is all about relationships and we need to be able to have open and honest conversations at every level of the supply chain so don’t be afraid to ask and have those hard conversations and ask the hard questions.

 

(1) WFTO is a good source too. Most of the non-FTF or even WFTO members we worked with we discovered on our travels and were just too small to be members but we believed in what they were doing. We also carried from non-FTF wholesalers in the USA who were not members yet but we had our own questionnaire for them to fill out and we did our own interview.

 

(2) we have faith in Fair For Life! They monitor a sort of bean to hand in coffee and chocolate

 

(3) They are great too but somewhat specific to food and consumables.

 

(4) We have our own informal list of interview questions we like to ask whenever someone comes in with “there’s this group I know…can you carry their product?” By the end of our chats it’s usually pretty clear what their motivation is and if they are actually working in the ‘spirit’ of fair trade. Would be interested to see what questions you are posing if you don’t mind making that questionnaire available!

 

(5) Would love to hear what questions you both ask.

 

(6) I can dig it up and email it to anyone who wants it- it is closely based on Global Exchange’s own purchasing practices.

 

  • Kevin Natapow

 

Yes- we always did a “working interview” with people. Sometimes they seem great on paper, interview well, but are a disaster on the floor. We would give them our customer service document, give them 15-20 min to digest it and send them out. We did not require them to have FT or product knowledge but DID expect them to be courteous, engaging and confidant.

 

  1. Can you tell us more about your “customer service document/” I think we need one of those!!

 

 

  • Kevin Natapow

 

Email me and I can get it to you!

 

 

  • Kevin Natapow

 

It can be hard to translate a like into a customer but in a small way you already have. If you are able to use SM strategically and consistently, you will more than likely be able to convert a FB like into a customer. Using tools that help you post across multiple platforms at once will also help you minimize your time and efforts and reach more people. Consider developing a SM plan and coming up with themes and way to create patterns that people can expect and appreciate

 

  1. Likes, clicks on info in a newsletter, clicks on items or articles on your webpage…ALL of those equate to building relationships with your customers, which in this particular business is especially important

 

  1. Good question!

 

 

  • Kevin Natapow

 

Pinterest and going to lots of cool hip stores anywhere you go. We always got great ideas on vacation by “shopping” at other stores. Hit some major ones in Berkeley one year and had some great VM displays for months!

 

  1. I try to follow what Anthropologie does for their window displays. Lots of inspiration there!

 

 

  • Kevin Natapow

 

YES- great resource!

There are also some good VM resources online but many of them cost money. If you look for a bit you can find some good resources for free though.

 

  1. I rearrange often. Things I always do as part of the process are: look at it from the front door (1st impression) and walk around like I’m a shopper (can I see it, touch it ok).

 

 

  • Kevin Natapow

 

Hire your first employee- there is no science or math on this one. No one person can/should run a retail operation on their own. You can’t do it all and just make sure you take your time and hire the RIGHT person.

 

  1. I’m proof no one person can do it all 

 

 

  • Kevin Natapow

 

I do not think you need to sacrifice one over the over. Demographics always shift to some degree and if you are picking up a new one then great. Esp with your expanded space you should have ample space to cater to both. You can also see if your town, etc has done any extensive demographic studies. Bottom line, we always have to be trying new merchandise and tracking it. You will know in 2-3 months if an item and even a new vendor makes it so do your inventory control measures, and try new things as you move old ones out.

 

  • Kevin Natapow

 

For those of you who received the Best Seller’s list this year (if you did not please email me and I will get it to you) you will see of the 10 store reporting ½ were down and most were flat. It was an interesting year for retailers and one theory I have heard out there is that after years of recovering both financially and psychologically from the 2008 collapse, many consumers are now making larger purchases like homes, cars, and other big ticket items they have been putting off for years. How true this is I don’t know but they trend I am noticing, both from clients and colleagues in the FT retail world is that sales did take a dip or at least a major slow down in 2015. That being said, many are still optimistic that 2016 will be a solid year with positive growth. Again, here is my plug for inventory control- this is a great time to buckle down and really find out what is selling for you. Reset (or set) min/max numbers and stay on it. Purge duds and start bringing in new items and best sellers that have been around for a while. Track those as they come in and set accurate min/max numbers for them and generate positive cash flow and higher turns. Don’t back off now and get cautious- this is the time that if you are not doing these things will make or break you so do it! Nuff said…

 

  1. *tough love*

 

  1. *knocks on wood* We’ve had a really great January and February is shaping up nicely. This is usually our dead season, but things are amping up compared to years past. People are buying things to fill their new homes/apartments with. All of this said, I’m looking forward to some purging and new items to keep the place looking and feeling fresh.

 

  1. We, too, have been off to a good start. I really have no idea why. Which is also good but scarey.

 

 

  • Kevin Natapow

 

Purge with care and buy with care- don’t do it on instinct- do it using math and a system. You have to have the right merch, at the right time and in the right quantities. No one is that intuitive!

 

  1. This is so KEY. Nothing is “magic” about this work.

 

  1. “THIS work, not his” oops

 

  1. I agree for the most part, but a little magic is necessary.

 

  1. Yes, after I wrote that I realized that magic is part of the fun, and can be very instructive. Fine balance I guess.

 

  • Kevin Natapow

 

This ties into the VM discussion earlier in terms of how you arrange the store- make sure you don’t create any blind spots, or at least minimize them. Keep the flow and floor plan open. One element that often gets overlooked in this area is customer service. Have your employees out on the floor, have them mingle, being there for customers if they need them, but OUT on the floor. Having people standing behind the counter is very unproductive-note, you should always have someone there to ring up sales or if it is a 1 person operation at least be paying attention to when a customers does need your help at the register. The rates of theft drop exponentially if a potential thief has been greeted, recognized and they know there is a staff presence. A large portion goes into training staff to know what to look for, red flags, and how to interact with a customer you feel may be about to steal or you think just did. Have a plan for how to react and move quickly as a team.  

 

  1. Can you recommend any good resources for learning “red flags” and reacting plan?

 

  1. We met with our local Police (an officer actually came to the store) to talk to us about theft, safety, etc. Discussed personal safety as well as theft prevention. There are times where we only have ONE person in the store (slow snowy January days for instance!) and it was good to have some tools on what to do with an irate customer, someone who makes us uncomfortable, etc. We live in a safe community but we live in a scary world.

 

  1. I totally agree with what Kevin said above. Watch for people who shop with their hands in their pockets (especially hoodie sweatshirts and big pocket jackets). Also baby strollers (believe it). Finally, if someone is looking over their shoulders or watching you…being on the floor is the best. I tell my staff to go fluff the store when customers are in – even if the customers don’t want help or don’t want to talk to you. Stand in proximity and rearrange, tidy up areas.

 

 

  • Kevin Natapow

 

This is always a good one but VERY subjective and store specific at times. Sarah was able to create a VM photos folder that I think will be super helpful in sharing ideas for how to display products, set windows, and other creative ways to arrange shops to have effective VM displays.

 

One thing I often tell people is not to be cheap and conventional in your displays and display pieces. Like with a location, don’t skimp and go big. We were big fans of antiques or antique looking displays. We tried our best to avoid merchandising supply stores for our major VM pieces- tables, chests, hutches, trunks, etc all worked well to provide look that did not look cheap but was not crazy expensive.  You want your store to have enough merchandise to make the sales you need to do (INVENTORY CONTROL- I will always sneak that in) but you don’t want your store to feel cluttered and overwhelming (over inventoried and too many SKU’s). Allow for a good flow around the shop and make sure you don’t create any visual blackout spots for employees as possible. Customers want to come into a shop and feel a sense of openness, not void or overwhelm. Make sure your cash wrap is NOT the first thing they see and that they have a threshold to ease themselves in so they feel safe to commit to entering. If you have not read already Paco Underhill’s “Why We Buy” I highly recommend reading it and understanding the psychology of how we consume and how setting up a store right can be a huge key to success. Use bright colors- heck, use color! Decorate, use products as part of displays, use tablecloths on tables, give a sense of what these things could look like in your home or a friends home.

 

Also, use forums like Pinterest to get ideas and designs. Try to do a reasonable VM move monthly or every other month. And 1-2 major VM overhauls every year- usually one after the holidays and one in the spring/summer as your change from fall/winter merch to spring/summer. Move things around and redo displays. I can’t tell you how many VM moves we did with no real new merchandise and regular customers would come in and think we got all new stuff in and would be so excited.

 

Redo your windows to follow seasonal themes- ski’s in winter, bikes for bike month, red and pink stars in the window for valentines, etc.

 

  1. What is a good budget for VM supplies? Is there a certain percentage of annual sales like there is with marketing? Or do you know how much you spent annual at Momentum?

 

 

  • Kevin Natapow

 

We spent a lot on VM but it paid off. The upfront cost is always the most, but once a year we would drive up to Ft Collins which had this awesome antique row and pick up a few new pieces. It completely changes the feel of a shop and gives that Anthropologie look vs. a cheaper gift shop feel.

 

If you email me I can get you hard numbers on what we spent over the years and % of sales.

 

  1. Thank you! Will do.

 

  1. I agree when we move things around sometimes we move merchandise up to main counter, in which then people are asking ohhhh, new inventory. I have a hard time saying either yes or no, I usually default to isn’t this beautiful it’s from Vietnam or talk about a point on a piece, just to stay honest. Also we also seem to do a lot of sales just right out of inventory and the box.

 

  1. You could also say something like, we’ve had it for a little while, but decided it’s beauty was better showcased up here.

 

 

  • Kevin Natapow

 

Nice move!

 

  1. “Make sure your cash wrap is NOT the first thing they see”…you mean the cash register/checkout counter? Kevin, why is that bad or not recommended?

 

 

  • Kevin Natapow

 

Yes- it is a psychological block for many people. Paco Underhill talks a lot about it. In a perfect world you want your customers to feel “safe” coming into a shop, travel freely and end up at your cash wrap. Often if they walk in and BAM there you are behind the register it can put them off and turn them instantly into an IJL (i’m just looking) customer and it is hard to talk to them a second time after that.

  1. Does anyone put a sign on the door?

 

  1. I find good customers make good employees and often have good recommendations. However, I’ve only ever hired part time folks.

 

  1. We get a ton of traffic on FTF’s job board –www.fairtradefederation.org/jobs. Feel very free to message me with your posting and I’ll put it up!

 

happy to do volunteer postings as well ( -:

 

  1. If we’re ever able to afford an employee, I suspect we’ll be posting our job openings with a bottle of champagne and noisemakers. (tongue emoticon)

 

 

  • Kevin Natapow 

 

Some of our best employees came from a sign in the door and a few from craigslist. We also got some CRAZY applicants from CL too so it is a lot more work to weed through that than the ones who come through the door. I also agree that good customers can make great employees too! The key is to have a solid job description with clear detail on what your expectations are for an employee. Have a solid interview process, and follow up and an even better training procedure. I also highly recommend and “working” interview with anyone who makes the 1st cut. People can seem great on paper and even interview well but bomb on the floor and you will see from the other discussions last night how important the customer service experience is!

 

  1. I’m talking to folks about a new POS this week.

 

 

  • Kevin Natapow 

 

I get the sense from most clients I talk to that their merchant services provider, especially is they are using an integrated one, have been quite supportive and helpful in making sure they are compliant and have the right equipment. Others?

 

  1. I’m waiting for a new “chip reader” to arrive – hopefully before October 2015 so I won’t be liable for any fraud. Although (knock wood) have not had any fraudulent experiences.

 

  1. We have been using an EMV terminal in one of our stores for over a year. It takes some getting used to but no biggie. We’ll get one for the other store prior to October. What I am unsure of is what changes to make when a customer doesn’t have a chip card. We’ll probably ask for photo id for non-chip cards and we’ll need to review our security settings for our website. We haven’t talked to our merchant Services provider (Chase Paymentech) yet.

 

  1. We use Square on an ipad for credit card processing. The new emv reader is a bit clunky, but works. We paid $20 for the reader. It needs to be charged frequently, and takes some time to “warm up” when we wake up the ipad.

 

  1. do you use the square stand?

And does the new reader attach to an existing stand?

Other Canadian retailers: does the EMV business in the US affect us?

 

  1. October 2015: The End of the Swipe-and-Sign Credit Card

http://blogs.wsj.com/corporate-intelligence/2014/02/06/october-2015-the-end-of-the-swipe-and-sign-credit-card/

 

  1. We bought an inexpensive stand to hold the ipad. It doesn’t connect to our pos software, which is on a laptop. We use the pos software to ring up the sale, then run the total amount through square if it is a credit card payment.

 

  1. love your profile photo — just saw one of those custom bowls when I was on vacation in Rhode Island. Looking into getting some custom Fairfield, CT ones made. Do you get them from Mira?

 

  1. Yep. It was really easy. Minimum is only 30.

 

  1. We have the Square stand from Apple for our iPad and do the same. (Ring up in QB, put charge through on iPad.) Wonder if our existing stand will work with the EMV reader or if we’re looking at a new stand. Assuming we need to make any change at all. 

    We’ve all had chip cards for yonks in Canada so most retailers have chip readers with pin numbers, or even just tap. We’re odd man out by having a swipe and sign machine at our store.

 

  1. Any apple pay users out there?

 

  1. Thanks for that link. This paragraph filled in the blanks for me: “if a merchant is still using the old system, they can still run a transaction with a swipe and a signature. But they will be liable for any fraudulent transactions if the customer has a chip card. And the same goes the other way – if the merchant has a new terminal, but the bank hasn’t issued a chip and PIN card to the customer, the bank would be liable.” Easy peasy.

 

  1. My iPad is my POS – the “swiper” plugs into where you would put your headphones! I love how stream lined it is. Worried about a chunky clunky EMV thing!

 

  1. we just use the little reader that also works in iphones. We also pre-ordered the emv reader that sits on the counter.

 

EMV Liability Shift – We’ve Got You Covered | Square

 

https://squareup.com/emv-liability-shift?gclid=CjwKEAjw9dWuBRDFs9mHv-C9_FkSJADo58iMLKHHh7HOJC8Io9vtRQB-siEoaD73DUoxX4xaHHbHDBoChfbw_wcB&pcrid=46291102057&pdv=c&pkw=square%20emv%20reader&pmt=e

 

  1. This is what our stand looks like: http://ecx.images-amazon.com/…/I/71KVdgs8XKL._SL1500_.jpg

 

ECX.IMAGES-AMAZON.COM

 

  1. It is SO much better than the little plug into the mic thing. You anchor it to the desk and it pivots around. You enter the transaction on the screen, twirl it around to face the customer (it clicks into place so it’s steady) and they sign.


And it’s got a power cord so the ipad is always charging.

 

  1. I haven’t had any problems w/ my swiper in the mic spot. My stand also swivels but I do not have it anchored to the desk. We charge it at the end of each day. I have even taken it w/ me to other locations in the store, even outside for “sidewalk sales” and to an offsite event. Can also use phone or another iPad for that too – just have to log into the software.

 

  1. Sounds like we have a similar setup

 

  1. We didn’t want to drill holes through our sales counter so we fastened the stand to the desk with that white poster gummy stuff. Works a treat. We also didn’t screw the ipad in so we can pop it out to take pics, whatever. We use the regular plug into the mic jobbie for events we go to outside of the shop.

 

  1. I’d like to start two new threads: how to post a job opening and POS for Mac users

 

  1. I was hoping to ask about Holiday Help!

 

  1. Sorry I am late to this thread. I use Lightspeed for my POS. They told me to ask my merchant services (Cayan) about new credit card processing hardware. The only option Cayan gave me is to lease a new machine at $20 a month. Is this a good deal? I don’t like having another monthly expense that would last forever…

 

  1. Timely thread for us! We just finished “installing” updated POS to support new Pin Pad, EMV reader. Intuit and Innovative Merchant Services. I gotta say, it should have been a lot easier than it was. The support people were very helpful, although I had to ask lots of questions which I think should have been covered in directions etc. I kept coming up with questions that I didn’t know I needed answers to until I traveled along the “new system road”. I do like Intuit’s 12.O POS system however. We are a small nonprofit. Our clerks are volunteers, so we needed a pretty user-friendly system.

 

 

  • Kevin Natapow 

 

I have heard about the $20 fee from Lightspeed. Do others have to pay additional fees from their providers?  Does QB charge an additional fee or require additional equipment? We were on QB POS 10 when I sold Momentum and although I had my issues with QB POS all in all it was a good system and agree that it is VERY easy to learn for new employees and even has a practice mode that they can use a dummy version of your shops file to play with and not mess up anything in the real company file. We used the integrated merchant services and really liked the ease of transactions, batching, and reporting. QB also has a new cloud based system that a client just tried and DID NOT like at all! It is powered by Revel and really is a Revel system with a QB label on it. So different than anything I have ever seen from QB and I started with QB POS v.5.

 

  1. We bought a “package deal” that was on sale from Intuit. It was the “new pin pad reader thing”, Intuit mobile “square”, 12.0 QB software for about $900 including install off our old system. Our merchant processing is bundled into it. Still on the learning curve, but we are progressing. We have not tried the cloud back up. That is asking a lot of a dinosaur.

 

(1) There is a lot of good info from LOHAS in Boulder, CO but focuses on the entire consumer trend.

 

KEVIN: In the past we’ve sold Putumayo cds and uploaded samples cds to an iPod to play over speakers in the store on an unending loop. We’ve had some ongoing communication problems w/ Putumayo and in our particular store cd sales have been negligible (plus the fact that with technology cds are on the way out & environmentally they’re not a great idea)… so we’re looking into other options.

We’ve thought about playing cds of local bands with a global sound & selling their cds on commission as a way to have music & connect with the community but that doesn’t cover the environmental/technological side of things. Do most of y’all go the way of Pandora?? Curious what’s worked for you. Thanks!!

 

Answers 5:

 

(1) I’ve been going pandora

 

(2) I guess I’m wondering if there are any ‘little guys’ doing the same thing as Pandora. Though I guess you’d probably also have access to less music that way. Hmm

 

(3) It gets to be a really long day if you have limited music to play! 

 

(4) Yeahhhhh…no good 

 

(5) Pandora. We make stations for each of the employees based on the song that was #1 on the day they were born. Thumbs down to anything explicit.

 

(6) Pandora isn’t available here in Canada. I have used tunein in the store but since we started carrying Putumayo we’ve just been playing them and they sell fairly well. Not all titles, so we just let them sell down and reorder the best movers.

 

(7) I used to play Putumayo, but it’s not doing so well for me either. I actually play the local college radio station. It’s commercial free, they cover several decades in music, and people seem to like that it’s local.

 

(8) Yes! We’ve actually advertised on our local public radio station (based at UT) so that’s been another thought but based on the time of day can get too rockin’ for some customers. Guess that’s when we pop on a Putumayo. That’s also the most cost effective option so far

 

KEVIN:  We stopped selling putumayo when the local market got so saturated. Plus, most people wanted to listen to it then would go home and buy something online. We unfortunately gave up on CD sales…

 

(10) I’ll do the same. Every so often they’ll schedule in some heavy metal, so I have the CD’s handy.

 

(11) I have a global mix on an iPod or use Pandora and do the same for holiday. Mainly I do it to create a vibe in the store. If I have someone working and allow them to play their music list it has to fit in with the vibe I’m fostering.

 

(12) We’re still selling Putumayo – I guess our customer base isn’t quite as hip to online music purchasing yet? 

We copy all the tracks of the cds we carry into iTunes and play them all day. We have each disc as its own playlist and one playlist with everything in. If a customer asks what’s playing, we can play more of that particular CD for them.

 

(13) Pandora one and love the variety and low cost

KEVIN: If you are interested in selling your business, I think one of the best ways to go is to find a manager/potential manager who is looking to own their own shop. Hire them and slowly train them to take over your business with a strategic buy out plan. Slowly transfer interest in your business to them until you hit a certain point and then have a buyout in place.  If you don’t find someone who is interested/capable/financially able to buy your business through a gradual transfer, put it out to the FT community and your local community. Everyone told us we were crazy to make our potential sale public but we felt like we had done right and that it would work out. The outpouring of support from our local community in response to our appeal for a buyer was so tremendous we saved many of the emails and put them in a scrapbook. # of our potential buyers came from that email alone. We also reached out to the FT community and found someone who was looking to buy a FT shop and the rest is history.

In terms of valuation, we had our business professionally valuated by a company in CA that does small business valuations. They were very helpful in taking the time to understand our business, our hopes for it and explaining in great detail why they felt the number they came up with was a fair price. We had a particularly disappointing experience going through a business broker (ours worked as both representative for the seller and buyer and that did not seem right to us) so we brokered the deal ourselves and worked with an attorney to make sure we covered everything needed for a good purchase and sale agreement. The attorney was not cheap but we had to commission fees to a broker.

KEVIN: Great question- many of you who have attended my workshops know that I put a great deal of importance on choosing a good location. Over 50% of your “out of the gate” success will be tied to your location (second most important thing is inventory control). Don’t skimp- start small but go prime! Find a good location in a high traffic district in town and do research on foot traffic, parking, etc. This always sound crazy to folks but if possible, own your real estate. Whatever you do, don’t be scared of high rents- you can likely find cheaper spaces but ½ the foot traffic and likely ½ the sales. Also, be next to your “competition”- be next to other retail stores, gift shops, and clothing stores. Try not to be in a strip mall full of sports bars and restaurants for example- wrong clientele at the wrong time.

 

(2) We moved half a block and across the street about 1 1/2 years ago and with a larger space have seen an increase of nearly double what we were doing! Location, location,location!

 

  • Kevin Natapow

 

This is a good question and good discussion. Some of it has already started but I will add my 2 cents to the mix. There are some good platforms out there to easily sell your merchandise online but I am a strong advocate for not mixing your online inventory with your brick and mortar inventory and let me explain why… Get ready, here it comes, SURPRISE- inventory control. Ok- lets assume you do inventory control and you set all your min/max numbers 2X’s a year and then you decide to go online. Online can be unpredictable- hugely successful, not much traffic, seasonal, etc. but it will mess with your min/max numbers and you will not have in the shop your optimal inventory if you are also selling online which is a huge disservice to your customers and your bottom line. We never did online sales in part because I did not want the added expense of maintaining the website, fulfilling orders, managing a separate inventory, etc. but we also did not have the luxury of what Global Crafts is offering. I think if you are determined to have an online presence, especially if you are in a high tourist area and want visitors to be able to continue to shop with you when they fall in love with your shop on vacation, consider doing something like what Kevin & Renice offer as you will not have the maintenance issues, etc. But, talk to folks who have done it and find out what their experiences have been. I can see where you would run into the issue of a customer seeing it online and coming in only to find it is a product you do not actually carry in the shop but maybe something could be worked out where you could process the order for them on the spot via your site and have it shipped to them at the same cost. Not helpful if they need it that day but may help convert a few sales.

 

Bottom line, talk to folks who have done it, check out their platforms, but keep it simple. I have met very few small brick and mortar retailers who do more than 1-2% of their annual sales online and we all know how challenging it is just to run a brick and mortar shop on a day to day basis, why complicate it for an additional 1-2% is my feeling…

 

  1. THANK YOU. Jill and yourself have saved my life this week.

 

  1. That may be a bit of an exageration? (From Jill)

 

  1. Probably not, because when I get overworked and stressed out my kids want to kill me. smile emoticon

 

  1. I’m wondering if these %ages are higher in 2015 and certainly moving forward. For the first time ever (nationally reported news) Q4 sales were HIGHER for e-commerce than brick and mortar stores. I realize places Target are in those #s but it has to have an impact on the local stores too.

 

  • Kevin Natapow

 

I think the big challenge is how to convert folks who may only be at that event but don’t know your shop or are in a different locale into a loyal customer. Education is a huge part but branding is key too. If they are close enough that they could be regular shoppers you may want to implement some sort of rewards program or loyalty program that would bring them in again. I have mentioned this before but if someone joined our rewards program they automatically received a $15 gift certificate on their birthday every year.

    1. Thanks Kevin, I wish everyone who shopped with us would at least check out our web site, but even after each week’s Saturday market event, we don’t get a lot of hits on our site. We give each customer a business card with our url and an offer for free shipping on the first order on the reverse side.

 

  • Kevin Natapow

 

I would focus more on getting them physically into your shop. Maybe a 20% off coupon good only in the shop?

  1. Or if you don’t have a physical space, maybe using that coupon for your online sales.

 

(1) There are SO many sites these days and outlets for fair trade, handmade, etc. I often tell people to consider their web sales as a portal to make non-local customers able to buy from you (especially if you live in a touristy destination and you get repeat non-local customers) or for locals who just like online shopping. It is always going to be hard to compete with Etsy, etc. Again, look for a POS that works seamlessly with an online platform so your not spending too much time promoting and maintaining an online website. Keep your life simple and put your time and effort into making your brick and mortar shop as amazing as it can be. Most shops I talk to who do online says report that online sales only makes up at best 1% of their annual sales but that is not to say you can’t do better or do it differently. It’s a lot of work though.

 

(2) So I find this interesting because I started as an online shop- selling my own creations as well as handmade goods from around the world. I am opening up a brick and mortar shop NEXT Saturday!! It’s part of a share space so there are other vintage shops and studios int he building with me so I think it is a good fit because it’s like what you said in another post, I’m with similar businesses that will attract their (already established) customer base that will also like my shop. Also it’s in an up and coming arts neighborhood in Providence so I think the demographic will be a great fit. I have to change my thinking though such as labeling and signage in the shop to share with people where these things are made and who makes them since usually online all the information is right there on the page with the product. Just have to restructure and find a balance between keeping my inventory up to date online with my in-store. Definitely some challenges, but I’m hoping I’ll reap the rewards of having a physical location. Anyone I show my products to love them, and I think there is an element that you miss when you don’t have the tactile experience.

 

  • Kevin Natapow

 

Doing events in your store can be a great way to connect with the community that supports you in a unique way. It has the potential to attract customers from a different demographic then you typically attract by how your structure your events. One strategy that we used was to host monthly fundraisers in the shop on the 3rd Saturday of every month. It was for 3 hours (typically) and we usually picked a theme- e.g. March was an event celebrating International Women’s Day, April was Earth Day, May was Mother’s Day, etc. We would have either an artisan group, local NPO, or allied organization represented and we would donate a portion of proceeds from the day if it was not a specific product or group or 100% of proceeds if it was for a specific product or group. Another example, to give perspective, was the soup tasting event we did every November. We would host the Women’s Bean Project and folks from the organization would come up to our shop, have crock pots full of warm tasty soups, corn bread, cookies, etc and any sale of a WBP product that day 100% of the profits was donated directly to them. Another fun one we did back in the day was when Whole Foods first starting carrying FT flowers, we did a wholesale deal with them and got buckets of FT roses and gave them out to all the moms as they shopped. People were walking all over town with beautiful long stem FT roses and big smiles on their faces- they remembered us that day!

 

We would do our own promotion of the event via our newsletter, social media, in store event cards, reminding customers about the event and by posting it on free community calendars hosted by local magazines, newspapers and business associations like the chamber and our downtown development association. Then the organization that was the beneficiary did their own promotion to their community and supporters and their people would come out to support the organization by shopping with us. Maybe it was their first time in the shop, etc but now they know about it, maybe they joined the membership program, etc and you gained a new customer. You are also giving back to the community that supports you and everyone loves when a local biz gives back.

 

Doing off-site events is another possibility but can also be a lot of work for minimal return. If you are doing events in your area you may pick up some customers that have not been in the shop but my experience is that a 10×10 booth does very little impress people and convince them to come into your shop at a later date, plus you have the expense of the show, booth, staff time, etc… It is not to say they cannot be effective, they surely can, but be very judicious about the ones you choose to do as they can be huge time sucks, cost a lot of money, and exhaust your staff/volunteers.

 

Another strategy is to do some branding/marketing work with a local company. We worked with a local company in Boulder to do a video of the shop that was expensive at the time to make but the returns were incredible. They did a lot of cross promotion on their site and via social media and we were able to use the video as a great tool to give people a taste of the shop, the products, and mission without them ever even coming in. You can check out the video we did here to get a sense of the quality and feel for what we did: https://vimeo.com/28975411

 

  1. Nice Kevin!

 

 

  • Kevin Natapow

 

It was money well spent and we used it for years and I think it is still in use by the new owners, even though it has our ugly mugs in it.

 

  1. So, you used this one your website, in social media and on the producer’s video. Anyplace else? Would you promote it repeatedly on Socia media?

 

 

  • Kevin Natapow

 

We used it all the time on SM. Anytime we could plant it into something we did as it really gave people a sense of what we were all about and some of the things they may find in there. Our downtown biz groups promoted it, etc.

 

  1. Kevin, when you say 100% of profits/proceeds, how to you figure that?

 

 

  • Kevin Natapow

 

retail minus cost. We would run a report at the end of the day, see how many we sold, and subtract the cost. the difference was what we donated to the org. Kind of like donating product…

 

  1. So you didn’t account for credit card fees or supplies (merchandise bags, tissue) or any % of OH?

 

 

  • Kevin Natapow

 

Nope- it was the easiest way to have a great fundraiser, gain new customers, and make everyone happy. It was a way for us to spend marketing/ad dollars on something we felt had a more powerful impact

 

 

  • Kevin Natapow

 

We also sometime booked it as a marketing expense depending on the size of the “donation”

 

  1. interesting; i know TTV gives 10% of profits and thats what i’ve been doing but it never amounts to much so I end up pitching in more.

 

 

  • Kevin Natapow

 

Sometimes we did a percentage of profits and sometimes we did the proceeds, but always be clear. I cant stand when people say they are donating a portion of profits to something. Be honest about what you are doing- big or small.

 

 

  • Kevin Natapow

 

This is always a very difficult expense to track, unlike inventory, we are not able to often directly track the impact of our marketing and advertising dollars spent. That being said, I think there are some effective ways to maximize your dollars spent in these areas with closer ways to track their impact.

 

Many of you have heard me say this before, but I am not a huge advocate of print media and conventional advertising. Again, that is not to say you should never do it but pouring your money into newspaper/magazine ads, in my opinion, is not only ineffective but next to impossible to track. Many newspapers and especially magazines, do not like or allow ads that offer a discount, etc. So unless you are asking every customer what brought them in today and they are giving you and honest answer, you likely will never know if that ad in the monthly local magazine reached them.

 

As I often say in my workshops, plan on spending 6-8% of projected sales in year one to build brand recognition and 4-6% in subsequent years (less if you are in a high foot traffic area). That being said, HOW you spend that money and categorize it in your expense accounts can vary greatly. For example, we did VERY little print advertising (a few special events 1-2X’s year) and did 2 annual NPR underwriting bits. The NPR was expensive and still hard to track but we did notice a lot of verbal comments appreciating our support of NPR and general comments like, “I heard you on NPR this morning”. Again, not a direct conversion of $ but good to know people heard it and that they appreciated it. Instead, we poured our $ into what we considered guerilla marketing.

 

We still spent 5.5% in 2012 on marketing and advertising but this is how it broke down:

 

Advertising

Radio- 0.1%

Print- 0.8%

 

Marketing

Newsletter- 0.1%

Print Materials- 0.3%

In-Store Events- 0.2%

Customer Rewards- 3.9%

 

So what does that mean, we spent money on our loyal customers. We developed a rewards program, called the Momentum Membership. In 2013 when we sold our store there were over 11,000 members. Members were mailed a $15 Gift Certificate and birthday card every year on their birthday. An additional benefit is a $50 store credit for every $500 spent, which was tracked automatically in our POS system.  Customers benefit from membership in this free program and Momentum also benefits by being able to track sales and trends in customer purchasing. Thanks to the program, best customers were not only known (their name popped up on the screen and employees were able to put names to faces) but they were also rewarded for their patronage.

 

Beyond that program, we would appreciate the top customers quarterly by mailing hand written thank you letters and 20% off coupons which had a note on them that helped us track their rate of return.

 

  1. What POS did you use to track your shoppers? 2nd question – does anyone know if this is available with Quickbooks POS?

 

 

  • Kevin Natapow

 

It is- QB POS is what we used and it is called their rewards program. Many POS systems have some sort of program that can track and reward customer and that is a critical question to answer if you are shopping for a POS system. Also, I think it is only available with the PRO version of QBPOS

 

  1. Tracking marketing success is very possible these days, especially if you have an online store, but also for brick and mortar. You can use google analytics and also the analytics on a newsletter like Constant Contact to see what people are interested and how those clicks contribute to sales.

 

  1. Not Basic version- QB POS

 

 

  • Kevin Natapow

 

Help me- I can’t find the dislike button

 

  1. Indeed

 

  1. How do you track how clicks contribute to sales in a brick and mortar?

 

  1. If you are doing a particular promotion for a product or several products, and you see a correlation between clicks on that item and an increase in sales for the item over the course of the campaign, it’s a safe bet that there has been some impact.

 

  1. Thoughts on comparative time spent on instagram and pinterest and facebook? We could spend hours on any one

 

 

  • Kevin Natapow

 

I think FB and IG can be more effective in reaching customers and drawing them in but I also never dealt much with Pinterest. I always used it for VM ideas…

 

  1. Instagram can save time for you if you start there because it will automatically post on Twitter and Facebook.

 

  1. If you have time though, you should always post different content on IG and FB and Twitter. Otherwise there is no reason to follow you on the different platforms. Additionally, the audience for each of those platforms is typically very different

 

 

  • Kevin Natapow 

 

Exactly- use tools that minimize your time managing these multiple platforms and spend that time with customers in your shop!

 

  1. You can Pin an item and credit your store, especially if you have an on line presence you can reach around the planet!

 

To clarify with Pinterest you are pinning a photo on a board (which you can have many). Others see your Pin because they follow, like the theme or are searching. So, you Pin the felted hot pads from Ganesh Himal Trading and it spreads.

 

  1. pinterest isn’t something that we are using as a wholesaler. Do you follow many wholesalers on Pinterest?

 

  1. No I don’t follow any wholesalers. I have found someone of interest on Etsy through a Pin. I was searching by keyword. I’m just saying it’s another vehicle.

 

  1. I follow any of my vendors/wholesalers/artists who are on Pinterest including Mata Traders, Mira Fair Trade, Global Mamas, Dsenyo. Just another way for me to keep up with new items they have. Their pics also give me ideas for how to couple and display my/their products.

 

  1. good to know. How does this compare to Instagram for you?

 

  1. Instagram seems to create immediate responses. I’ll post a pic and customers contact me that same day asking me to hold it or they come in to buy it.

So I guess I would say I use Pinterest for inspiration and to help me, as a retailer, buy. Instagram helps me connect to my customers and helps me sell.

 

  1. One other use for Pinterest: one of my employees creates private Pinterest boards for me with her product recommendations along with her notes as to why she thinks they are a good fit. She also includes vendor name/SKU/link so if I’m interested I can go right to it. Totally her idea, great employee.

 

  • Kevin Natapow

 

The long-standing customer service experience question- a good one! My opinion is that anything you can do within reason to make your customers experience the best it can be and set yourself apart from everyone else is worth every penny and effort. Wrapping can be a real pain but depending on what you use for your own non-seasonal merchandising. For us, we used 4 different sizes of brown paper kraft bags with our logo printed on either side. And 4 sizes of kraft paper boxes with our logo on top. We used sage jute rope to tie bows on the handles with sprigs of dried lavender from our garden and brown kraft tissue inside fluffed out for presentation. That is what we did all year long and during the holidays, we had a family member send us a big box of cedar bough clippings from the Pacific Northwest and we would put a sprig in the bow on the handles and/or under the jute tied around the boxes. It was really attractive and we offered it for free always. Our merchandising expenses were slightly higher then normal but we built those into our retail costs of all items sold. During busy times, we always had 2 people on both registers and at least 1 person doing the wrapping in the back bar area and 1 person circulating the floor. During the December rush we would have 4 people behind the cash wrap rigging up sales and wrapping and 2-3 people on the floor. If we got too backed up we would often ask people who wanted extensive wrapping to come back later and it was up to them if they wanted it or not. Being as we offered it for free we did not feel bad if it did not work with their schedule. Bottom line, whatever you can do to make your customers feel like you are the best store EVER is worth it and should be done. You have to be better that Pier 1 and World Market and it is these little things that make people come back and feel special!

    1. Agree! Many of my customers say they appreciate the care and presentation of their purchase.

 

  • Kevin Natapow

 

It makes a huge difference- beyond what we may even see in that moment.

    1.  No wonder Momentum was so wildly successful! Those small touches are huge for developing customer loyalty.

 

  • Kevin Natapow

 

We always got such positive feedback on our packaging! Men loved it too cause they didn’t ever have to wrap anything.

    1. Could you talk about how you incorporated merchandising expenses into retail costs?
    2. LOVE the cedar bough (and lavender) add!

 

  • Kevin Natapow

 

Well if you look at your annual P&L and see what % of sales your merchandising expenses are you can take what is above normal or what you feel you can’t eat yourself and build that % premium into your overall margins. For example if your COGS is 52% and your merchandising expenses are 1-2% higher then you may like or is normal for a shop your size you could increase your over margins to absorb that cost. If you can get your gross profit up to 52-55% you will be absorbing some of that additional cost. You just don’t want o overprice your merchandise but honestly most items I see are underpriced anyway and can bear a higher margin (except for our Canadian friends)…

  1. Our gross profit was 53% last year but I would like to see 55%. Merchandising costs seemed like an area where I hadn’t looked, so this is very helpful!
  2. Additionally I will add that our store is 23 years old and we used to actually WRAP boxes in wrapping paper for folks. It was craziness. 3 years ago we changed over to just doing clear cello bags with colored tissue, ribbon, foil stickers with our logo, and branded Gifts that Change the World cards with a brief Fair Trade explanation. Not one customer complained about not having a wrapped box. It’s free – and I have found that most customers are just so happy to have anything offered at all!

 

  • Kevin Natapow

 

One thing to look at is what system if any does your POS offer. Many have a built in rewards/loyalty program and these are great questions to ask if you are shopping for a POS system. Our system was a hybrid- it tracked customers and their purchases and applied (at our decision) a $50 reward for every pre-tax $500 spent- like always getting 10% off. We added in the birthday gift certificate for $15, which we had to track manually with some assistance from our POS.

    1. Good idea to tie it in with a POS choice. I hear from a lot of retailers that a loyalty program allows them to get to know their customers better – their names, etc. A plus for customer service!

 

  • Kevin Natapow

 

Great point – customer like to feel they are “known” so having a system that allows you to use that information for their benefit is huge.

  1. Thanks I think this will encourage me to use my new system to its fullest. Collecting names has helped so many times.

 

 

Kevin Natapow: HUGE- many of you who have seen my presentation at FTF or elsewhere know that I put a huge emphasis on location (50% of your success) but that should be an easy one, which is another discussion. Customer service, and inventory control, which plays heavily into your customers overall experience are much more challenging as they are ongoing and represent about 10% and 25% of your stores success respectively in my book. As small independent retailers our challenge is to create a unique identity for ourselves, perfect the customer service experience, and find awesome merchandise that attracts, and fosters, a loyal customer following. A recent survey of 2,000 consumers showed that 83 percent were willing to spend more on a product or service if they felt a “personal connection to the company.” We all know this to some degree but the belief that the products we choose and the artisan stories alone will sell the product is not true. We have to create that amazing “wow” experience that makes our new or existing customer want o keep coming back because of their experience, not just the fair-trade factor. In addition to an outstanding customer service experience, you have to maintain excellent inventory management practices to further capture that customer loyalty to your brand. Inventory management protocols keep stock moving efficiently through your stores, without overstocking and tying up cash. Ultimately, you’ll increase sales (upwards of 25% if you are not doing any inventory control measures and do it diligently going forward), maximize profits, improve customer satisfaction, and develop that unique identity that customers can remain loyal to. Some quick examples of how inventory mismanagement can affect the customer experience and subsequently sales are that too much inventory can lead to excessive discounting, which will eat into profits. It can also overwhelm your customer with too many choices, which studies have shown lower sales. Conversely, not carrying enough inventory results in missed sales opportunities, leading to lower revenue and dissatisfied customers. So yes, customer service is hugely important and I do a lot of work with clients on an efficient and effective hiring process, training procedures and protocols, and ongoing employee/volunteer management. All of which give every customer a top-notch experience, but again, doing inventory control is hugely important for the whole customer experience. You can have the best-trained employees in town, a top-notch location, but if you have the wrong product mix, in the wrong quantities, at the wrong time, you will lose that customer loyalty and see your sales drop. A recent study showed that worldwide, retailers collectively lose an estimated $800 billion a year due to mistaking low sales for low demand, making it one of the more damaging, yet preventable, issues facing retailers.

 

  1. Very interesting! I have never thought about the important relationship between inventory control and customer service!

 

  1. Having trouble reconciling “don’t overwhelm customers with too many choices” and “have XXX # of skus per sq ft”. 

  2. Don’t remember what XXX was, it came up last time, but it was more than we have, and already people exclaim about how much there is to see and how many choices they have. They say it like it’s a positive thing, but as often as not people who say that don’t make a purchase.

 

(Mind you, we haven’t broken down every style of each product into its own sku. Working on it!)

 

  1. It is a very interesting correlation – that if you don’t have the right inventory “mix” your customer won’t be satisfied when looking in the store for a purchase.

 

 

  • Kevin Natapow

 

As you all know, customers are a finicky bunch! The goal is to get it just right and studies show that too much overwhelms them and too little bores them. The goal is 1.7 SKU’s per sq ft which I will discuss in another question but that is a number that for store like ours is a good balance. The goal is to be close to it.

 

  1. And just to confirm the #SKUs per sq foot increases for Holiday to What?

 

  1. This is great info Kevin, and good stats.

 

 

  • Kevin Natapow

 

Inventory control is all about having the right merchandise (sells) in the right amount (min/max) of merchandise at the right time (seasonal). If you don’t control these factors your customer will tell you with their dollars by not spending them there!

 

 

  • Kevin Natapow 

 

It is not necessarily an increase in the # of SKU’s as it is an increase in inventory. You will see an uptick in overall SKU’s but SKU’s per sq ft includes all active SKU’s, even if they are only seasonal. You may have items that are spring/summer/easter/valentines, etc that will not be on the floor on actively in your inventory but now autumn/holiday are. You will have more of everything because most shops will do 50% of annual sales between Sept-Dec so you need the inventory $ to make those sales.

 

  1. SO would I order more quantity of those best selling SKUS or always follow the min/max – Some items I cannot “reorder” during say November or Dec.

 

 

  • Kevin Natapow

 

EVERYONE should be doing a fall/holiday bulk up order- run a bestsellers report for non-seasonal items and order everything you are going to need for sept-dec of those items and ignore reorder points for them.
NEVER run out of your cash cows!

KEVIN: I think this harkens back to the earlier question on how to convert customers in to advocates. If you are awesome then people will generally believe you are awesome and spread that word. We did very extensive training with our employees on the customer service experience and the goal was for every customer to leave our shop feeling like they just left the best shop ever. Not only did we want to have the best merchandise, with the best story behind it, displayed in the best way possible, but we wanted them to have an experience that left them wanting more and talking about it with friends colleagues, etc. There is no better advertising then word of mouth so if your customers think your store is ho-hum they may mention the availability of fair trade products at your shop but they are not likely going to “sell” your store to anyone.

 

Kevin: We often hosted events that supported local NPO’s and community organizations. It was a win/win as we drew on their support network as they wanted to support their cause and our supporters wanted to support our efforts to support a local organization. We usually structured it as a benefit event- all profits donated to the org or 15% of the days sales donated, etc.

Anything that broadened our support network but attracting unlikely supporters was worth it. Maybe they didn’t know about us or were skeptics of FT, but they liked what they experienced and were in once they came down.

 

KEVIN: Rewards Programs- spend your money on in-store programs to reward your customers. You can directly track benefits and how effective your campaigns/efforts are. Create a loyalty/rewards program where, for example, you can give them a $50 reward for every $500 spent. Many POS systems will do this automatically and customers will not have to do anything but be your customer to participate. You can have them fill out an information card so you capture all their info- mailing address, phone, email, etc so you can mail them things and add them to your email list. We started a rewards program and our e-list went from 2,000 subscribers to over 10,000 in just 2 years. We also sent “members” a gift certificate for $15 on their birthday every year to be used in the month of their birthday. You can then track how many get redeemed and how much they spend on their birthday transaction. We had about a 40% return rate and avg sale of $40 on including the $15 GC. Most importantly, our customers LOVED the program and felt it was very personal. We got emails and verbal acknowledgements of the program and how special it was.• Best Customer Tracking Program- again, reward those who are your biggest supporters. Once a quarter, run your best customer report by dollars purchased and take the top 20 or so and send them a handwritten thank you card with a 20-25% off coupon. A customer like that will be flattered and will of course tell all their friends. Word of mouth is some of the best advertising you can “buy”

 

KEVIN: Also, use social media well and use it to promote your awesome in-store programs. Advertising, although many times necessary, is hard to track, expensive and in my opinion not the best use of $ in small stores like ours. It also depends quite a bit on your local, demographics, etc

 

(3) I pay for very little print advertising, I get a bigger bang right now from Social Media and turning your customers into Advocates for your store (word of mouth is the best way to get new customers into your store).. Also, many newspapers are desperate for content, if you are willing to write something for them and they publish it – Boom, free advertising!

 

(4) Do you recommend spending money on boosting social media posts?

good question 

 

(5) I’ve not paid to boost any of my SM posts. Maybe someone else has experience.

 

(6) I have not seen much return on that- most of your FB/Twitter, etc followers already follow you and boosts don’t always seem to reach the right people. Anyone else have experience with boosts?

 

(7) I have heard from others who say FB boosts have a direct effect, still haven’t tried it myself.

 

(8) I’ve had good returns from boosts when they are done to custom audiences that are set up to mirror my email list

 

(9) We tried it and after refining the parameters to our local area it helped some.

 

(10) I usually boost facebook posts for $5 and that gets me about 800 veiws (only to likes and their friends). I feel that there is a increase in sales after those boosts.

 

(11) I guess do some research and talk to others who have done it on how exactly to do it.

 

(12) Also, for those of you who are FTF members or are considering membership, they have a new HUB that would be a great place to really connect with folks on all these questions too. I am sure there are many shops who have really figured out some creative ways to use SM effectively.

 

(13) FB is tricky – when you post something your fans do not automatically see it in their newsfeed. Only the fans who interact w/ you them most. If you want ALL of your FB fans to see it, you have to pay for it. It’s actually FUN to pay $10 to boost a post for a day, watch the “analytics” page and see what happens. There is a huge difference between what FB calls an “organic reach” or non-paid post and a paid post. 
Right now I am trying to gain FB “fans” and paying $15/day for 3 days, set the demographics. My hope is to gain FB fans and try one of those SOLDSIE facebook sales. 
SO my question is: has anyone else tried those facebook sales and what were your thoughts w/ it?

 

(14) We just started a rewards program in the form of punch cards earning a % off after it get filled and that has so far produced the most favourable comments.

 

(15) Customers LOVE to be rewarded 

 

(16) I rewarded my top 5 customers of the first quarter and wrote them a hand written note of thanks w/ a gift card to the store. They were thrilled (and one of them was an employee!!!)

 

(17) on this FTF HUB, that’s a facebook thing or???

 

(18) From a wholesalers experience we have had some good luck with the facebook post “boosts”

 

(19) Nope- FTF launched it at the conference this year and if you are a member you have access. They will likely give you a trial access if you are considering membership but the access alone would likely be worth your annual fee.

KEVIN: On occasion. I add $1 for packing and add whatever the shipping costs are through the Post Office (most of my stuff fits in their boxes). Stop there, they can give you a price list.

 

(2) I ship about once or twice a month in response to things I put on Facebook. Since I need their address anyway to ship, I actually pack it, calculate by USPS and round up $1. I then email an invoice through Paypal. Most of my items are only slightly bigger than the USPS small box, so it keeps the shipping costs down a little by packing in my box versus the next size up in USPS.

 

KEVIN: I highly recommend offering shipping to your customers, especially if you live in a touristy area (put signage up in your shop and at POS). Having shipping available will often make/break a sale if someone is on the move and does not want to carry stuff on a plane or the rest of their trip. We used a tiered structure based on our shipping estimates and experience with UPS (see attached photo). Sometimes we lost money and sometimes we made money- at the end of the year we usually broke even or made a little bit on our shipping and handling. We created a non-inventory “item” called shipping and handling that was on the customers receipt.

 

(4) I also offer shipping, it is about customer service and getting a sale. Agree with everyone else, pretty much break even.

 

(5) Thanks everyone. I have been shipping for folks but haven’t had the courage to post it yet. Need to get my ducks in a row and this is very helpful. Thanks for the guidelines, Kevin. And can you tell me where you get your paper mache animal heads and how they did for you? BTW – I visited your store several times in my travels and I must say, it is so beautiful! I was always inspired.

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