• 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