One of the unique strengths of being an independent brand is that you can leverage your ability to curate your range of products and foster that personalized shopping experience, which is vastly different to the mass market approach of the big box retailers. And so that's a benefit, but it's also kind of a curse.

How do you know exactly what your customers want to buy? Well seasoned retail buyer and founder of the Babel Fair Showroom, Erica Kang is here to give you tips on not just how to choose the right products to buy, but if you are a product brand, how to get those products into stores. Welcome to the Bringing Business to Retail podcast, where we talk all about ways to make more money in your retail or e-commerce store.

Erica, so glad to have you here. Thank you for having me. No problems. You have so much experience like, oh my gosh, you guys listening. It is very rare, I think to be able to get the knowledge and insight of somebody who has been in the industry for so long and looks so young. I have to say, like, you look fabulous and the fact that you are willing to share all of this.

So thank you so much for being here. Of course. I'm very excited to join you. Alright. How did you get into fashion? Okay, so I, I've always been in fashion since a young age. You know, I always worked retail stores in college. I did a lot of various internships from luxury places like Gucci merchandising. I did men's pr, Vogue editorial, and so during my college years, I really experimented with all the different sides of the fashion industry.

And I learned that I loved the business of fashion, so merchandising and buying. So I went on to become a corporate merchandiser for Ann Taylor, and then after that I opened up retail stores and then the showroom. Okay. I have to ask you if you can please define the word merchandising, because it's a really weird term that can have two different meanings.

So for some people it means visual merchandising, but then from a planning perspective, it could mean. Product assortment and product mix and product buying. So which part of the merchandising were you? Yes. That's a really good question because it is a tricky term term and not a lot of people know exactly what it means.

For me, it has to do, for my particular job, it had to do with buying. So usually for a vertical retailer like Ann Taylor Loft, they call their buyers merchandisers. But essentially, you know, we're the main component of a cross-functional team. So we work with our buy, we work with our designers, production, product development, planning, and we're the centralized person organizing all of those different parts of the team in order to get the assortment into stores.

So that means that would've really set you up to work out what are the best products to buy? Yes. So tell us a little bit about that. I have so many questions for you, and I wanna know how you took that and put it into your retail stores and why you even opened retail stores. But let's just start right at the beginning, which is like, what were the key foundations that you learned as a merchandiser buying for big chains?

Yeah, that's a really good question too because Ann Taylor Loft also is not my personal, I would say style. I'm gonna say no. Like you were probably the best dressed person when I saw you at an event recently, and that is, you did not buy that at Ann Taylor. Yeah. And so it really, it really taught me that you can be a good buyer no matter what you're buying for, you know, it doesn't really matter if you personally like that brand or would wear it.

It's really getting into the mind and psychology of being a good buyer. So for, for me, what I learned, and this was my first job, real job outta college, which, which was to be customer obsessed. And so, you know, I had a lot of meetings with marketing. We did a lot of. Brand, a customer research persona, research developing.

You know what? Our customer, our customer was actually a teacher in her thirties, might have one kid, you know, and so all of that really contributed to how she bought what she bought when she bought. So I love doing the store visits where we got to interact with customers. And so that really paved the road for me of how to be a good buyer.

Can you tell us a little bit more about that? So understanding the customer persona. So who is, who is the person that is generically going to be buying our product? But you said that you even went into stores and asked the customers because I personally think if you have a bricks and mortar store, this is a freaking superpower that not enough people leverage.

They do not understand that just having conversations with customers puts them so far ahead of an online business. Yes, and I remember when I went. We thought, you know, sometimes you do stuff in merchandising or corporate because you're so far away from the tactical product. You know, we're just doing things to fill a hole, right?

So like one was we were doing corduroy pants and we needed color because obviously the colors that seller like black and brown, and. I can't, I think the color was purple of the time, but like a bright purple. And so we, when we went to the store, like, this actually looks so terrible. Like at the time it just wasn't moving at all, you know?

And so it's like sometimes you make these decisions so far away from the actual products that when you go see it and feel it and you're like, yeah, no one in the store is touching this. So, yeah, it ki it really helped to have that like real life experience. And were you actually talking to the customers and if you were, what were you, like, what kind of questions were you asking?

Were you telling them that you were like doing market research or like, just walk me through that process? Yeah. That we were really excited and so were the customers. We'd be like, we're from corporate and they were so excited to kind of tell us what they thought, you know, and so. We had a lot of fun. We went, people, women were trying things on, which was great to see fit because that kind of gets lost sometimes.

Obviously we have a tech fit designer, but just seeing things on and learning where women were wearing these clothes, you know, learning that a lot of the women were teachers or nurses, and so you have to kind of think about how do these clothes play into her particular lifestyle. Yeah. Yeah. And so were those kinds of the questions you were asking, like obviously you were asking questions about, you know, do you like the fit?

Do you like the colors? Do you, why do you shop here? Things like that. But I guess, what were you looking for in terms of, ooh, that's something that we hadn't, like is there anything that comes to mind where that someone might have said to you, we're like, Ooh, that's really important, and we didn't think about that.

Yeah, it was so long ago. I don't remember exactly, but um, yeah, I do think that we, I think what was interesting was just seeing the actual, like demographic of the customer. I think, you know, corporate thinks they might be a little bit younger. They probably skewed a little bit older, which also kind of helped us assess like exactly who was buying the product.

And honestly we got a lot of really good feedback from the employees. Like they were really excited to tell us like, you know, their thought. 'cause they're there every day, you know? So like, they're like, no one touches this, you know, and it again, it might be a color or like a fit or something like that, but they had a lot of insight and I think it was great to kind of connect with people who are there every single day.

Yeah. I love that. Do you happen to remember whether, when you were in Ann Taylor, you were thinking, oh my God, this is a little bit different to the Gucci customer. Oh yeah, for sure. I mean, the Gucci customer, like I was working in the jewelry department and I mean, it wasn't a very busy department for whatever reason.

So, you know, and we would have, we would know one customer, literally, that's how Gucci, they know their like 10 customers that spend hundreds of thousands of dollars. So it was a lot more personal. Whereas, you know, you're ca you're catering towards like a certain. Very small group of people and, and, and Taylor, you know, you're dealing with a totally different type of customer for sure.

Much more commercial, obviously much more accessible price point. So, yeah, and that's really interesting. That's kind of the perfect segue to the next part that I wanted to talk to you about is being able, as an independent business or an independent brand, really being able to leverage the fact that. You are almost in the Gucci realm in terms of customer association.

Probably not in price point, but that unique ability to be able to really understand who your customer is, because most of the people who are listening are either still. In the trenches dealing with customers or are still working in their business as well as on their business. So you might be doing seven figures, but you still have enough fingers in enough pies to be seeing those customer complaints or to be able to hear those, you know, what people are saying.

And so thinking back to that customer experience, the customer journey, were there any key, I guess, key moments or key highlights or key learnings? That you think is really important for people to, that are listening, to be taking on board because they do have that ability to know their customers more.

Like Gucci. Oh, I think we just found the title of, for this episode. It's like, know your customers like Gucci

as opposed to, you know, the big chain stores. 'cause big chain stores are looking for mass appeal. They're trying to appeal to hundreds of thousands of people, not thousands of people. Right. Sorry. So you mean as an independent brand? Yeah, yeah. Like what are those, what are those key takeaways that you learn in from the difference between Gucci and the difference between Ann Taylor Loft that people listening could be leveraging?

I'm always looking for like the, the hacks that the big brands do that we can insert into our businesses. Yeah, I think Gucci, you know, they obviously have a special exclusivity and I think that, you know, a lot of brands can leverage that as something that they offer. You know, when we start to sell an independent brand at the showroom now, because now years later, I have a fashion showroom, so we represent independent and larger brands, but for independent brands, when we launch a strategy really is to say like, you could be the first in this territory with this brand.

And Yeah, and retailers love that because honestly, I think the reason why a, a shopper would shop with an independent store, right over like a big box retailer, is to have those unique pieces, those unique brands. And if you have territory, which means exclusivity for a certain, you know, square radius, square mile radius, then you have a huge benefit because you might not be able to find these products for.

Maybe not even within states, you know, pretty far you'd have to order it internationally, so that that's a great way to get into a retailer. I love that. And I think, tell me more about that. Because what I have found from many of the retailers that we work with is the whole exclusivity is going away.

Like brands are just trying to flood the market. Get into as many retailers as possible, whether that's big retailers, whether that's independent retailers. Are you finding that the brands that you work with are happy to do exclusivity more, more often than not? Yeah. I mean, and they all, they honestly lean on us because I think that when you are exclusive and you maintain that you actually grow and scale faster because you hand chose, you know, there's a brand, Paloma Wool that.

Did this really well, like, was very picky about what stores that they sold to. I don't know if they would say they're picky, but you know, that's what I observed. And so I really, you know, like that strategy of being strategic, not just saying yes to any boutique, you know, or any store but place. And that's not to say like the status of the store or whatever, but just making sure that your brand aligns with that store and that's the type of brand that you wanna grow.

And so, yeah, I, I see it work really well as a strategy, and so we're talking about that from both sides of the fence. So if you are a store going into a, like a, if a brand approaches you to stock their product and you think it is really well aligned, it's having that, you know, having the, you know, the audacity or having, having the backbone to come out and say, well, you know what, I'm prepared to give this a go, but I want exclusivity.

But then also from the brand point of view is using that as a leverage point. I know when I had my stores, I would get dozens of products coming in every single day and you're just like, like, there's no what? Gimme a reason to look at this. And it wouldn't matter if a, it wouldn't matter if it was something physical that turned up.

It wouldn't matter if it was a look book or you know, somewhat, it used to drive me insane when people just used to call me. It's like I have six people at my counter, like, go away, my friend. No, no, no, no. And I used to, so after Ann Taylor, I opened two stores. And so when I was at the stores, I felt the same way I felt, I mean, also in New York City, that's where my stores were.

It's very high traffic. So you don't really have ti, you're like working with a customer. You don't have time to be assessing lines. And then it's awkward, right? 'cause you don't wanna talk about wholesale price in front of customers. But yeah, I, I don't think that that's the best way to approach a retailer.

Oh, even worse, when they just turn up and then they just sit in a corner or stand in the corner and you're like, I could be hours. Like, go away. My friends go away. Yeah. Or buy something. Try something hard. Right. Like make you feel useful. One of the questions I wanted to ask you just around exclusivity was, is there a world in which.

I know that you work with a lot of big stores like Nordstrom. Yeah. Is there a world in which a brand may select specific items to be exclusive to, say a big box store like Nordstrom, but then have other stores available to Independence? Does that happen? A hundred percent happens all the time. And I think as you said, brands are getting bigger, they want more business, but they don't wanna cannibalize.

I mean, a brand shouldn't wanna cannibalize their own business. So like if you sell the same thing to Nordstrom and the same thing to Bloomingdale's, which a lot of brands do, you do wanna differentiate some point. So a lot of. Brands, including my own will do exclusives for the larger retailers just so that they have something different.

And sometimes even for boutiques, like if, if they can do a hundred of something, we've done it before, you know? And so I think that gives you. That point of differentiation where yes, you have the same brand because brands need to make money, right? They need to sell to retailers. So I, it makes a lot of sense, but I think one way is like if you Google it and you see all of the same stuff at all the same stores, you're gonna just buy the lowest price you know, of that item.

But if that item comes in exclusive color or print for someone, then yeah, they're really driving that interest to their site. Okay. So you just said something that I found quite fascinating and I think. People who own independent stores, whether it's online or bricks and mortar. If you weren't listening, Erica said something along the lines of doing an exclusive color for a boutique, and then she said a hundred units.

Can we dig in a little bit more because I don't know if you said that offhand, but I think a lot of people listening have maybe wanted to do something like that, and it's never occurred to them that a hundred units. Most people, that's probably completely doable to sell through a hundred units. Is that a option?

I know that I to do it, we. We used to have these candles that we bought and we had a baby store, but we just used to have a candle because it selt nice in the store. We had so many people asking for those candles. I actually went to the manufacturer. I had 500 of the damn things made just so that we could sell them.

And it was quite remarkable to me that actually the MOQ was only a hundred. And I'm like, I can sell more than a hundred of these. My friend just gimme 500 and so, so talk to me about that. About what kind of numbers we should be looking at and is it different for different kind of verticals? I know that you deal mainly in fashion, but Yeah, tell me, tell me about that.

Give us the spill, the T. Yeah, so I mean, each brand has different MOQs. So, you know, we do have a, we do have brands that have MQs, which is minimum, minimum order quantity in the thousands. So that's, that's something that obviously I would not recommend. But we do have a lot of designers who have an MOQ of a hundred pieces and sometimes less, sometimes like 50 or 60.

Just the MOQ really depends on the factory and depends on the brand. And so I really do encourage boutiques to ask, because you never know, you know, like. What the MOQ is, and it's rare. We actually had a boutique inquirer this week about cutting six styles, a hundred pieces each. I mean, it is higher for a lot of single boutiques where they're buying six to maybe 10 units.

It's doable, right? Especially sometimes people have two locations and so I would say if a boutique has a bestseller, and of course we all have that seller, like I, I remember ordering a dress for my boutique and I just kept getting anything that they had left. I was like, just give it to me. And we probably did sell a hundred at the end of the day.

So I would say if you have a bestseller that just is selling out like crazy, I would inquire with the, with the brand to see if they can recut it for you. Wow. And to me that is like almost the perfect opportunity to go back to that customer engagement. And you are literally building campaigns around, you know, Hey, we're going to create this thing, it's a bestseller.

We're going to get our own unique color. Do you like green? Do you like this purple? Do you like red? You know, putting it out to customers. And then of course, it's a presale opportunity, so I'm always about taking the money beforehand. Oh, of course. Yeah. You get a deposit for sure. Wait, that is a good point.

I don't think that sometimes boutiques don't leverage as much of that as the majors do. 'cause obviously the majors can really cut anything. 'cause they can sometimes do 300, 500 pieces. So if they want something, they can get it back. But sometimes that's also true for boutiques. Okay. Can you just. I found out, I remember this story where a friend of mine was a visual merchandiser, freelance visual merchandiser, and she was doing some vi visual merchandising in my store, and she just casually mentioned that she'd been doing it for one of the big brands here in Australia and that the brand had paid some ridiculous amount of money, tens of thousands of dollars to be in the window.

And I was like, hold up. Brands pay to be in the window, like. What is this? And she goes, oh yeah. If they're in a catalog, they pay to be in the catalog. In fact, they'll pay more to be at the front of the catalog versus the middle of the catalog. How big the pictures are, they pay to be in the window. They pay for shelf space if they're discount.

I did not know this, my friend, like, nobody teaches you this stuff. If you're in a big box retailer and the products gets discounted, it's not the big box retailer that's taking the cut. It's the the supplier or the manufacturer on the backend who is taking the cut. That changed my entire concept of business, this throwaway line, and I actually, like, sometimes I think, oh my God, the audacity of you girl.

I actually created, I called it the Windows media kit, and I sold space in my shop windows and in my email database, and it was, I think it was a thousand dollars if you wanted, we had two stores that were quite premium in terms of frontage. If you wanted the windows in those two stores, I think it was a thousand dollars.

And then you also got X number of shoutouts on social media and you got email and, but, but they could choose whether they wanted to pay me in cash or pay me in like a thousand dollars wholesale in product. You know what I wanted, I didn't want the cash. I wanted the a thousand dollars worth of product because that was $2,000 and it meant my order to them had to be so much smaller.

They, you know, they had to give a, at least one giveaway. And I created, sometimes I look back and go, and people paid me for this. Like, who the heck was I? And yet we would sell out our windows month in a months in advance. Wow. That's amazing. I have not, yes, you are right. That's what big box retailers do. I will say you need a good sales agent to negotiate, sometimes not doing, not paying for it, but they definitely.

Try to get advertising dollars for, you know, any, any marketing opportunity because when you have that many eyeballs on something, they realize like, yes, you can charge for this. So it's, it's definitely a good way to get additional revenue in for an independent boutique as well. And then you were just saying something else then they, so many eyeballs, and this is something I think.

Independent stores, forget. And also brands forget. So independent stores, forget to say, to be able to go to a supplier, manufacturer, a brand and say, but we have 200,000 customers a year coming through our store. And then, but then I see a lot of brands go, well, I don't want, you know, I don't wanna be doing wholesale to retailers because that's a cut in my profits.

And I'm like, but that's 200,000 people in that one location. That are never going to see your product. And I think that independent stores forget to leverage that kind of information, but then brands sometimes forget to appreciate that information. Yes. I mean, I'm a now having the showroom. I've had that for over, you know, 13 years about.

Which is also known as an agency. I'm a big proponent of wholesale. I feel like it's a necessary component to scaling a brand. As you said, it gives you a platform for people to try it on. And you mentioned this to me, which I thought was a really, really good insight that. Sometimes they're not even buying it from the independent retailer, I hate to say, but sometimes they are.

It just gives it, it makes it more visible and you don't know actually where they end up buying it. As a brand. As a brand. Yep. And but, but they're acting as your agent. So every retail store and every online store becomes an agent. And when you just mentioned before about the exclusivity or even just being.

Picky about the options that you have for different stores. I think if you are a brand that is such a great strategy because it does mean that the stores on the, you know, the frontline stores have the opportunity to be different in diff, you know, in different locations. But it also means that you, you know, you are not competing against mass market, so you've got.

You've got this blouse, but then 300 other stores have got it, like you said, and now it's a race to the bottom. And then all that ends up happening is you end up discounting and then your stores get upset because it's like, well, you didn't offer us a discount. So that idea of being, you called it picky.

I'm gonna go with picky as well. Being selective about the product range that you offer to different stores. I think that is a brilliant strategy. That way too many brands don't actually employ. For sure, for sure. And I think, you know, for boutiques, as things are getting more commercial and universal, there's big box websites, I think it's really how you curate your collection and how can you find these independent cool brands that might not be at other places, because that's what people are really gonna come to you for.

And you know, customers know they're, they're like, I go to this boutique and they have these amazing brands that they can't find anywhere else. I think the assortment is so crucial now where it used to not be as crucial when, um, there wasn't the shop ops and the revolves and asos and all this kind of stuff, but I think more it, it is now, so more than ever.

So can I ask you, because you have the showroom side of things, many people who listen will go to, you know, a buying fair, whether that's a static buying fair or something like magic. Here in Australia, we have the read gift fairs and things like that. How did they find the brands that aren't in those places?

You real, I mean, 'cause I, so I started with, after Ann Taylor, I started with two stores called Babel Fair. And then with Babel Fair, I specialize in international brands that were hard to find. And I will say like, yes, we did a lot of research on the internet, keeping our ear close to the ground, like. You know, constantly finding out what was trendy and cool in other countries.

But we did find a lot of gems at trade shows because a lot of trade shows, especially the big ones, whereas everyone's like, oh, there's nothing cool at magic. A lot of international brands, for example, only know magic in the US so they come and they just do it, and they're like in a weird booth in the back and no one's talking to them.

But if you really take the time to walk every single booth and look, you can find gems for sure. I found so many amazing. I found an amazing Japanese brand at Magic one time. That was, I mean, silk dresses that were beautiful and no one really was picking up because they were just in the wrong section.

Really hard to find the show didn't care about them, you know, so they didn't have a great booth. So I would just say some buyers kind of beeline in and out of the show, but, and you really need to take the time to walk it and spend a few days finding those gems. So when people are going to something, I mean, it is completely overwhelming.

And you just said a few days and they do go for several days. Mm-hmm. And I'm gonna say that most of the people I talk are kind of like you. They either have two strategies, which is, I'm in and out, or I'm gonna go the first day and I'm going to like, you know, do my recon and then I'm gonna go back the second day.

What would be your suggestions? Because I love the fact that it's like go to all those janky booths down the back that you know, you are thinking, you know, those people are worth nothing. But actually, let's kind of flip that on the head and go, this is an opportunity waiting to happen. But as people are going, it's, we're about to hit peak buying season.

Like if you haven't already bought, you're about to start buying. What are we looking for? Yeah. I would say at the trade shows, I always spent time. I, I always booked enough time to walk every single aisle. That might be cr but accessories ju 'cause clothing, brands are mixed in sometimes by accident. So I was really scouring those trade shows and I took being a buyer very seriously.

That's why I learned at Ann Taylor, you know, your job is to buy product that your customers are really gonna resonate with. And that's not always easy, you know? So I think it's easy to kind of go to a, the few brands that you know, but you really have to mix in that newness and I felt like that's what kind of put our store on the map.

Yeah. Spending a lot of time digging through a lot of different. Brands at the shows. So when people are going to buy, should they be analyzing what sold last year? Or should they be looking at what's trending? Like you are in the thick of this right now. What are you seeing? What are you seeing that people are really latching onto?

And that the, the people who are listening, whether they're in fashion or not, can take some advice away. Yeah, I think there's an, there's an unfortunate trend that's happening because business hasn't been great, right? So when business is not great, people stick to what they know and they don't go outside of their matrix.

So they're just because they, and you see this not just in fashion, but you can see that there's so many sequels of movies right now because no one's willing to take a risk on, on something that's kind of, you know, avant garde or totally new. And I think that actually kind of hurts you. I think that if you're only sticking to what, you know, there's no newness and everything feels very stale.

And so, you know, a lot of brands are sticking to the same stuff that they've already done, and retailers are sticking to the same brands that they know. And I will say, obviously you can do that. Maybe I would keep it though to 80% and I would say 20%. You're gonna stick out if you have that newness, if you have those unique pieces and those unique brands, because I see retailers really get hurt when they're not trying something new.

I, I think the same thing, like you have to keep it fresh. Yeah. At the end of the day, even whether it's color, whether it's style, whether it's something like accessories, it is really about finding reasons and. Reasons don't have to be discounts, but it's finding reasons to get people to come back to your website, to come back to your store, to come back and look at what is happening.

And as we, as we literally, as we're recording this, we're in launch for a bootcamp, which is to show people how to make promotions. And I think. Retailers forget that promotions don't have to be discounts, but you've gotta be doing promotions pretty much every week because a promotion is just an excuse to get people to come back and see what you have.

Give them excuse to buy something. Yes, and I, I, this is such a simple statement, but one of my brands told me a long time ago, they're like, customers love new and it's always stuck with me. They want a new, they love a new brand, they love a new collection, they love a new, you know, like newness is always gonna keep it fresh, obviously, and just get people right coming back again.

You don't want them to come back. And then it's the same exact brands, the same stuff that they already saw before. 'cause then they stopped coming back, you know? So it was the same when I had the boutiques. I would just like try to, even if it's a small portion of the assortment, just to get something new in.

Yeah, make sure you're changing out those damn windows. Like I was talking to someone the other day and I was like, when, when was the last time you changed out your window? And she said, three months ago for the season. I was like, oh. Oh, exactly. Yeah. You should be changing the window. Yeah, I, you are a lot more polite than me as we go in, like you've given us so much information, particularly around buying, but I would love to know what do you think is considered to be a bestseller?

So a bestseller is how fast it sells and how many units it sells. So sometimes brands or shops will say, this is a bestseller. They sold out of it, but it took eight months. Right? So if you sell out something and it took eight months, that's not exactly a bestseller. You wanna see how long it took you to sell it.

So, rule of thumb for me is getting kind of hyper-specific is usually I plan products when I had a store and an Ann Taylor at 60% full price. Full price sell through after six weeks. So, yeah. Can we, can we just dig into that because. You. I say nothing after nine. Like I'm 45 days, but nothing after 90 days.

It's gotta be gone after 90 days. Yeah. But at 45 you should be looking at getting rid of it. Please walk the listeners through because they've heard it from me, but sometimes they need to hear it from somebody else who has more knowledge and more experience. Walk us through what that looks like. Yeah, so 60 per, so I actually started for six months as a planner at Ann Taylor before being a merchandiser, which is actually the planning of the inventory.

And so we would always plan at 60% full price, sell through after six weeks, which means for six weeks you're selling through 10% of that inventory. And then after, if it was a very solid. B plus seller at six weeks, you would start to go to markdown. With the 40% that was left, we had a little bit of a higher margin, so that was okay.

But yeah, we would start to start the markdown cadence. And I have to say, the other thing that I said, I just said this on my Instagram the other day, but something that I see boutiques not do is mark things down. And it is. Yeah. I see you agree? Yes. So if you are watching the video, you see my face and look, I'm always gonna be the first person who says, don't discount.

But there is a point which Erica literally just walked you through, at which the product is now costing you money. It is opportunity cost, and it is a literal cost. And so, yeah. Continue, please. Discounting. So as a planner, they were just like, as soon as it's like a, you know, something is a dog, mark it down.

You gotta get it 'cause you, 'cause the, we call products dogs when they don't sell, but you know, 'cause the ca it's such a heavy cash business, right? There's a lot of cash in and a lot of cash out. And cash is your lifeblood. So you do not want it tied up into inventory. You just wanna recoup E like, you know, even if you can recoup the cost, which would be great back and move on to buy something, reorder something, buy something that's trending, you know, make use of that money rather than just have it.

Locked up in this inventory that's not selling. And you know, I, I say this because I see a lot of boutiques have things on the ground for, for like a year and I'm like, you need to mark it down and re just get the money back. I'm like, it's so the money is worth so much more. Yeah. So cut your losses and just mark it down is what I said.

I worked out that if you had a product that you sold for $40 and you paid $20 for it. Cost the the lost cost, the opportunity cost of that product after one year is literally a million dollars. Yeah. Wow. Because it compounds. So just a quick, it's like, okay, if I sold that today I have $20, I have $40, I can now buy two.

So after that, I can then take that money and buy four. And so that just continues to multiply and you stepping out the 10% per week. For the first six weeks. So by six weeks we have sold out 60% and there are gonna be so many people listening here going, oh yes, but we're not a chain store. It doesn't matter.

Yeah. It doesn't matter what kind of store you are. The simple fact is you need to be selling because it is, inventory is cash. It's literally your money locked away. Yes. Can you tell us about what happens to the next 40%? So the next 40% gets marked down in a markdown cadence. So, and then you start to pull different levers and it gets a little bit more strategic.

But, you know, you start with a shallow discount if it's not moving after one. I, I can't remember exactly the amount of weeks that we did, but. You slowly mark things down until they move. 'cause obviously you don't wanna jump to 50% if you don't have to. You know? So, you know, maybe your shallowest discount is 15%, 10, 10% sometimes doesn't do it, but sometimes it does if it's an expensive item.

But basically you start to go down, you know, let's say 15%, 20%, 30%, 40%. But you wanna just keep marking it down. I would say, depending on how busy your store is, you know, 'cause it really depends on how many people are seeing this. Marking it down every week or two until it is gone. Yeah. And so when you were working in a big box chain store, at what point is it out?

What point does it have to be sold? Gotten rid of, written off. Yeah, that's called kill price. Um, we would do kill price probably after 90 days. May like it was maybe 60 to 90 days, depending on, you know, do, it depends on other conditions, you know. But, um, I, I wanna say it was around like 60, 90 days. You don't want that hanging around too much.

No, but it's just money. At the end of the day. It's, it's literally your money sitting there staring in your face going, ha ha, you can't have me. Yeah. And what I hate seeing is like a basement full of just inventory. You know, when you go to boutique, because again, I've been there, I've had, I had boutiques for 10 years, so I understand.

But I think something, 'cause you mentioned boutiques might be like, oh, I don't that I'm not a big box retailer. But honestly that's how I learned how to run my boutiques. You know, I ran them the same exact way down to our assortment planning down to. You know how I planned our dollars, I really stuck to a budget because I noticed that sometimes boutiques don't stick to a sales plan or know how, what they're buying to.

You know, like I had very straightforward, we planned 20% up to last year by month, and then we looked at what that, what our margin was and followed that to get to our cost dollars, you know, so it was very formulaic. And then I usually. Didn't only bought 85% to that plan and left 15% for Chase. So that's exactly how I did it, you know?

And it worked. Yeah. I mean, at the end of the day it worked. You've, you've moved on and now you help brands get their products into stores. Big, big stores, independent stores. I think you left the best until last. I think that we're gonna have to cut that little bit out and make a great reel on that because the knowledge that you just imparted about sell through rates and you did it so well was probably game changing for the people listening.

And so as we go in my friends to the Christmas holiday buying period, I don't wanna see any of that stock in January. Yeah, for sure. You don't wanna see it in January. Yeah. King. Thank you so much for sharing all of this with us. I just can't believe like that was, that was bombshell. What? You just Thank you.

Thank you for sharing that. Great. I had such a great time. Thank you for having me. So that's a wrap. I'd love to hear what insight you've gotten from this episode and how you're going to put it into action. If you're a social kind of person, follow me at the Selena Knight and make sure to leave a comment and let me know.

And if this episode made you think a little bit differently or gave you some inspiration, or perhaps gave you the kick that you needed to take action, then please take a couple of minutes to leave me a review on your platform of choice. Because the more reviews the show gets, the more independent retail and e-commerce stores just like yours, but we can help to scale.

And when that happens, it's a win for you, a win for your community. And a win for your customers. I'll see you on the next episode.

Erica Kiang is an NYC-based fashion entrepreneur and real estate investor who has generated $60M+ in sales over 15 years in the fashion industry. After building a successful fashion showroom, she realized that true financial freedom doesn’t come from just running a business—it comes from owning assets. So she has dived into real estate within the last year, purchasing a 3 unit property in Brooklyn and is an LP in a 20 unit property. Her mission is to help fashion entrepreneurs scale their businesses and invest in multifamily real estate to create long-term wealth. She’s also the founder of NY Women Real Estate Investors, a growing community empowering women to build financial independence through real estate.