Inventory Management through a Product’s Life Cycle
Most retailers develop skill at selling products on the sales floor. For many, this is part of why they became retailers. They love gaming, and their enthusiasm helps them sell their favorites.
But those popular games represent only a fraction of your sales. If you build them but ignore the rest of the sales cycle, you’re not maximizing your store’s sales potential. You must sell products before they hit the shelves and not stop selling until every last vestige of them has disappeared from the supply chain.
Before the Release
Sell upcoming items by reminding customers in advance of the product’s release date. For a big release, remind them of the release date in shrinking increments of time: three months out, a month out, a week out, and then the day before. For lesser releases, a notice a week or two in advance is sufficient.
Products like Alliance’s Game Trade Magazine are helpful tools for collecting pre-orders. You can have a stack at the counter, lay them out on game tables, or hand them to your best customers. You might create a pre-order sheet and leave it on the counter so that interested parties can sign up. If you use a standardized special-order form, fill it out ahead of time with the name and stock number of an item you want to promote; that way, customers need only put their name on it and turn it in. The easier you make it for them to order, the more pre-orders you’ll get.
New Item Sales
This time is perhaps the most important stage in a product’s life cycle. Generating a huge player base of any given game creates the potential for supplement or add-on products later on the game’s lifetime. If you have 30 players for a new CCG with the first set, then your potential for sales with the second set is excellent. You’ll also have a strong network of players who will continue to play the game. On the other hand, if you only make 5 players, then the game will probably die for you within an expansion or two, leaving you with cash-killing unsold product.
Raise your players’ interest with tournaments. Introduce new players through demos. If the manufacturer doesn’t provide one, you might want to design your own demo deck, oversized game pieces, or RPG scenario.
Stock new items together. Have a “New Releases” shelf or end cap inside the front door. It’s perfectly okay to stock additional copies with the rest of the product line, but you should keep at least one copy visible to everyone who walks in. It’s easy, and it builds sales.
The midlist refers to products that are not new enough to justify high visibility but not old enough to clear out. It includes most of the product on your standard shelving or pegs. Your midlist products generate a large portion of your sales. Maintain product visibility. Keep hot merchandise face-out rather than spine out. Keep it in stock. Make sure it’s shelved in the right place.
Department signage helps your customers find this merchandise. Shelf-talkers bring attention to items you wish to promote. Rotate products and displays often so that regular customers see different products.
You might not keep backlist items on the shelf. Maybe you removed them so that something better can have that floor space. Maybe you stock Goon the RPG, but you don’t carry the Thug and Bully expansions.
Instead, place a manufacturer catalog on your shelf, next to the Goon core book. If it’s a small publisher and their product offering fits on a single page, you might include it inside the book’s cover. If your customers are interested, they can place a special order with you. A stamp on the catalog with your store name, phone number and URL can help customers remember where they bought the book and who should get their order.
Good special-order practices are key to increasing sales of this category. Have a standard procedure for taking orders, placing them promptly and then making sure the customer knows about them. Follow up as needed so that you can either sell those goods to the customer who ordered them or move them elsewhere quickly.
Some stores refuse to take special orders because of the flakes who place orders and then fail to buy those items. At my store, the greatest amount of product in my hold bin was about $1,100. The average was less than half of that. On the other hand, special orders earned the store $100 to $250 a week in consistent, regular sales. That’s about a 20x turn rate. The rest of your store won’t do nearly that well.
You might trade unmoving product with another store. One retailer’s trash, as they say, is another’s treasure. Some manufacturers offer stock swaps in which they accept a return on unmoving inventory in exchange for other inventory. Your distributor might, under certain circumstances, offer something similar. You can always ask.
With most of your products, you want your price to reflect a happy meeting of sales velocity and revenue. Price too low and you sell faster but you make more. Price too high and sales slow but profit margin rises.
With clearance product, the happy meeting point lies closer to the speed side than the profit margin side. Clearance product won’t create a player base, it won’t generate repeat sales, and it won’t provide a long-term revenue stream of any kind. Your goal is to get it out of your store so that you can use your valuable floor space selling profitable merchandise.
The keys to creating speed lies in awareness and the right price. You create awareness by creating a visible display. A wire floor bin is perfect for many products. It should hold a big sign that says something obvious, like “Clearance” or “Buy me or the terrorists win.” You might also mention product lines you’re blowing out in your weekly e-mails, newsletter, or on your website. If you maintain a bulletin board in your game room, try sticking a note on there announcing the latest addition to the clearance section.
In some cases, a low discount might be enough to generate customer interest. Such products might be the unpopular booster set from a popular game, an overpriced terrain piece that competes against a superior product, or an RPG supplement you over ordered.
Sometimes the discount needs to be higher to get attention. When you’re not sure how much to reduce the goods, offer a climbing discount, increasing the discount by 10% each week or two until it’s gone. Except in unusual cases, I don’t bother with more than 70% or sometimes 80% off. It’s not worth the effort at that point. The dollar or two you get isn’t worth the storage space or sales effort. At some point, you’re financially better of throwing dead product away and using that space to sell items of greater value.
Instead of using your valuable retail floor space, you have at least three other options for getting rid of slow-moving merchandise. EBay is an almost guaranteed sale within a week. You can do an in-store auction very profitably, mixing your own clearance products in with customer sales for a huge sales day or weekend. Blow stuff out at a convention and don’t worry about poisoning your own customer base with deep discounts. If you have off-site storage, you can hold products there until the next sales opportunity.
How it Helps
One problem you’ll notice as you start your store and place your orders is that you always want more stuff than your buying budget allows for. You want to buy all of the new stuff and restock the stuff that sold. The trick, then, becomes knowing what not to restock.
Careful attention to selling your dead games helps remind you which items required a lot of work and time to sell. Don’t restock those things. Selling these games also adds a small amount to your weekly sales total. If you’re using a percentage of one week’s sales to set the next week’s buying budget, you’ll find that you have a few more dollars available for ordering.