Working with commodity balances
The inevitability of commodity residues, if you think about it, is one of the most serious problems of the fashion market. Experts unanimously say that no matter how thoughtful the purchase was, no matter how the collection corresponded to all the trends of the season, as a result, a certain number of things will still remain unsold. Is it possible to avoid the formation of drains and thereby save the store from losses? And what if the product is still unsold?
Reasons
Commodity balances can be formed for various reasons. Among them, late deliveries can be distinguished, which can occur both through the fault of the retailer and the supplier.
Another common reason is incorrect procurement planning. To calculate the optimal quantity of goods for an order, it is necessary to take into account many factors, the most important of which are the size of the retail space, the frequency of deliveries and the volume of planned sales. But it is very difficult to understand what will be worse or better to sell next year – too many factors affect it. For example, the weather or the presence of a similar product in the stores of competitors. The difficulty also lies in the fact that the order of a new collection occurs even before the end of sales of the current one. At this stage, it is impossible to say which items will remain unsold at the end of the season. For this reason, buyers often rely on their experience, intuition and market trends.
Experts assure that it is impossible to take into account all possible factors that may affect the appearance of product residues, and you should not panic when you hear that part of the collection has remained unsold: the presence of product residues is a prerequisite for the normal development of a retail enterprise. It's good if 60–70% will be sold before the start of sales. We can say that if there is less product left in the store before the new collection appears, this is bad, because you can lose a buyer: a period begins when everything is sold out, the new product has not yet arrived, and the buyer who entered the store leaves, having formed a negative opinion about the company.
"Absolutely zero balances, in my opinion, as well as large balances, are the result of incorrect planning of purchase volumes," says Oksana Prokofieva, representative of the Gil Bret and Saint Jacques brands in Russia. "Zero balances mean lost profit, in fact it is an insufficient supply of goods, which means lost profit."
How to prevent it?
It is necessary to solve the problem of commodity balances at the early stages of working with a new batch of goods, thus it is possible to reduce future commodity balances to a minimum.
In order for the product not to "hang", it is necessary to form an optimal assortment. This is done with the help of a commodity matrix, which shows how many and what goods should be laid out on the trading floor and when it is necessary to replenish stocks. As a rule, the matrix is compiled empirically, based on the analysis of previous sales. At the same time, the area of the store and the peculiarities of seasonal demand are taken into account. The longer the store's work experience, the more accurate the matrix will be. To implement the chosen assortment strategy, it is necessary to organize purchases in such a way that the necessary goods (in accordance with the approved assortment matrix) are present in the store in the right quantity.
When calculating an order, it is necessary first of all to clearly divide the goods into "transitional" (things that are least affected by fashion trends and have stable demand) and "seasonal" (the group of goods most affected by fashion trends, which, as a rule, does not have clearly defined analogues in previous collections). When ordering a transitional product, it is necessary to rely on the dynamics of sales of previous seasons, the number of points of sale of products, the dates of entry of goods into the range, as well as the objective advantages and advantages of a separate model. When ordering seasonal goods, the period of sale of which is limited, it is necessary to remember that the risks are the highest. In addition, it is necessary to take into account the competitive situation in the market.
Author: Svetlana Michan
Photo: Shutterstock.com
