One of the things that you probably pride yourself on as a retailer could also be costing you a lot of money. What is it?

Well, it's your ability to curate a fantastic range, because for a lot of independent retailers, curation is the backbone of your business. It is why customers choose you. They could go to Amazon. They could search through thousands of other products. They could go to a department store.

They could spend three hours on Google looking at every possible option. But they don't want to. They want to come to you because you have already done some of the hard work for them. You found the brands. You've gone through the catalogs. You've walked the trade shows. You've rejected the stuff that isn't right,

You've brought in the things that your customers are going to love. And after you've been doing this for a few years, you get pretty good at it. You can walk down nearly every aisle at a trade show, and you can rule things out instantly. Nope. Nope. Nope. Wrong customer. That's not for. Us, then you get to a booth and you'll go,

"Oh my gosh, our customers are going to love this."

And most of the time, you're right.

But being right about the product does not automatically mean that you have made a good buying decision, and that distinction can cost you a lot of money.

Hey there, I'm Selena Knight, and welcome to the Bringing Business to Retail podcast, where we talk all about the strategies to make more money, growing your retail or e-commerce business. Now I love buying for my stores. I love trade shows.

There is something about walking through the aisle after aisle and seeing all of those new products coming through. You see what's trending. You see all the different colors, the different styles, the brands. And if you are anything like me, your brain is already merchandising as you walk through. That would look fantastic over there. Oh, that would go really well with that range. I know exactly who would buy that. And I think that skill is massively undervalued when we talk about independent retail, because you are curating, you are making choices on behalf of your customer. You're saying, out of everything I could possibly stock, these are the products worth paying attention to, and that is your point of difference, and therefore it is a valuable skill.

And for a long time, I thought that was my only job as a buyer. I thought my job was to choose. Good products. Does it fit my store? Is it on trend? Does it fit with my brand? Will it look good on the shelf or on the website? And will my customers want it? And all of those questions are important. But what I eventually realized was that my job was bigger than choosing just good products.

My job was to allocate the cash to the products that were most likely to make the business money. And those are two very different things. Because when you buy inventory, you are making an investment decision. You've got money sitting in your bank account. You take some of that money out and you give it to a supplier, and in return, you get boxes of product. But now that money is gone.

It can't pay your wages. It can't pay another supplier. It can't fund your marketing. You can't fund a reorder on things that are selling faster than you expected. Your money is literally tied up in stock. So that stock has a job to do. Now, let me be clear on this: you do not buy stock to own products. You buy products to turn the cash that you have into more cash.

Let me say that again: you aren't buying inventory just to have products on the shelf. You buy product to turn the cash that you have into more cash, and every single product must earn the right to receive your money. That is what you need to be thinking every time you spend.

Because if buying starts with,well, what do I like? What do I think will sell? What is on trend? What is the rep telling me is going to be huge this season? You're starting with the product. What I want you to do is start with the business. Start with the business, not the products. Where are you trying to get to? How much revenue does the business need to produce, and how much profit? Do you need those sales to create?

That's where I want you to start, and then you can work backwards to the products. Which products are going to help you get to those goals? Because that is a very different way of going into a buying season. Say you've got a revenue target for the next three months, and you know the gross profit that you need for those sales to generate. Those numbers now become a filter.

You might find something gorgeous at a trade show. That's fantastic. Your customer will probably love it. Awesome. Now tell me. What job is that product going to do to help you to reach those numbers? Because every product you order has a job. It should be helping you to create the revenue that you're trying to produce. It should bring in enough profit.

It should turn back into cash within the time that you planned it to, and it should earn the space, the money, and the attention that you're giving it. That's the part that I think gets lost when you're really good at curating product. We can look at a product and know that it belongs in the store, and then we move on to the next range. But this belonging in my store.

Hasn't told you what the stock needs to do for your business. It hasn't told you whether you deserve ten units or fifty units or two hundred and fifty. It hasn't told you whether customers are going to buy it at full price.

It hasn't told you how quickly that money is going to come back to you as cash, and it hasn't told you whether putting ten thousand dollars into that range means you won't have enough cash left to reorder something that has already proven that it can make you money.

So there's one question that I believe that you need to ask yourself after you think my customers are gonna love this, and that question is, how much money does this need to make me? Because stock has to make money. Some products are gonna do it in different ways. You've got those dependable staples that your customers just buy on repeat. You've got the products that create that higher average order value.

Some products will give you fantastic margin. The profit just rolls on in. Some product will bring customers in, and some will create that newness that keeps your best customers coming back. Others might just deserve a small order to see what happens. They don't all need to do the same job.

They do need to do a job, and the amount of money that you put behind them should reflect the evidence that you have that they can make you money. This becomes really obvious when you're actually.

Standing at a trade show, you found the product you love it, and the rep is sitting there with their order form out, and they say, "So how many units?"

Now, if you are anything like me, you've got about thirty seconds before the silence becomes really uncomfortable. You're looking at the product, you're thinking about last year's sales, you're doing some rough math in your head.

Maybe you go a little bit higher because you're scared of running out. Maybe go a little bit lower because you've already spent an awful lot of money today, and the invoice is making you nervous. And there you go, you just made maybe a four or five figure buying decision in less time than it takes to make a coffee. And the same thing happens online. You've got the supplier portal open.

You type in fifty. You get to the bottom. You look at the total, and you go, maybe I'll just make it forty. Still don't love that number. Okay, thirty-five. Thirty-five feels better. And I say this because I have done it. But here's what's interesting: nothing changed between fifty and thirty-five. You didn't get some new sales data. The margin didn't move. The selling period didn't change.

You changed the quantity until you were less uncomfortable with the number at the bottom of the invoice. And that is why the first thing I do when I work with a retailer is get them to put those revenue and profit targets in place. Because if I know what I need this product to do, and I have evidence of the demand.

I have something that is much stronger to base the order on than how confident I'm feeling that day, or how much money is in the bank today. Maybe last week was an amazing sales week, and there is plenty of cash in the bank. So today, 50 feels okay. Maybe three supplier invoices just landed in your inbox, and now 40 feels a little bit safer.

Neither of those things change how many units your customer is likely to buy, and this is where curation. And commercial buying have to be separate for a moment. Your eye for the product got the item into consideration, but now the product needs to earn your investment. If you cannot explain how a product will help you reach your target, you don't have a buying decision. You have a bet.

Now, sometimes you are going to have to bet. This is retail. This is business. There's always going to be new ranges or trends or products that customers haven't seen before. And so you can't possibly have three years worth of sales data telling you what will happen. That's just part of being in retail. But if you are betting, go into it knowing that you're betting, and size that bet accordingly.

You don't need to put a huge amount of cash behind something just because it fits your range beautifully. I want you to test it. I want you to let the product earn the bigger order, because sometimes your eye for the product is going to be bang on. And the amount you buy will still be wrong, and sometimes what you think is driving the sales isn't actually what's driving them at all.

One of the craft stores inside of my million-dollar store had this happen. She had been doing this for a long time. She knows all of her products, and she knew that there was a certain brand that performed really, really well. But when we looked at the sales, that brand sold. But digging into the numbers further, what we found was actually the strongest pattern wasn't a particular brand.

The strongest pattern was literally a pattern. It was bright prints. Bright prints moved so much faster than the plains and the neutrals. Now the plains and the neutrals sold eventually, but they took significantly longer to turn back into cash. And here's why that is important.

Because if you are looking at your report at the end of the year, both of those products are going to show up as units sold—a bright print that sold out in three weeks, and a neutral that sold out six months later. Both of them sold. They can look very same if you're looking at the wrong report, but they did very different things from your business.

A product that sells in three weeks and a product that sells in six months both appear as sold, but they do not produce the same outcome for your business. One gives you the cash back quick so that you can reinvest it and make more money. The other one holds your cash literally hostage, and that changes your buying decision because it sold just isn't enough.

Eventually, selling the product does not tell me whether that stock did the job that you bought it to do. How quickly did it sell? Did people pay full price? Did you eventually have to put it on discount? Did you clear the last third of the order? And could that money have been used again, two or three or four times over while it was sitting there?

That's the bit I want you to go pay attention to, because if we go back to the craft store and what the buying data showed her, she thought she knew what the successful products had in common. It was the brand. The money showed her something more specific. It was the prints from that brand, and this is why I want you looking at the actual products that are doing the heavy lifting.

Because a brand can look successful, but inside of it, maybe only three or four SKUs are actually generating the most sales. A category can look weak, even if one SKU repeatedly sells out, and you can keep putting money into a range because that brand does well for us.

When most of your cash is being made by a handful of products inside it, you need to know what has earned more of your money. Your stockroom is giving you buying information. Those boxes that you keep walking past because you don't want to deal with them—they are giving you buying information. The products that you bought because you love them, that are still sitting there three months later, are telling you something.

And yes, it's uncomfortable. Every retailer's been there. We all have those boxes of products. We just want someone to take them, just take them, just get rid of them out of my sight. But I would much rather have that information before I place the next order than make the same buying decision again. Because my memory tells me that something sold pretty well. This is where curation becomes expensive.

You've built a fantastic range. Customers tell you that they love it. You walk into the stockroom and there is product everywhere, so you feel well stocked. And then one of your proven sellers runs out. Customers keep asking for it. The team keep ask when it's coming back, and you go to place the reorder. But actually, there's no buying budget left this month.

Because your cash is sitting in that stockroom in products that customers aren't choosing fast enough, and you can have tens, sometimes even hundreds of thousands of dollars worth of stock, and still not have the stock that your customers want to give you money for. And that's the part I want you to connect back to curation, because curating a range isn't about saying yes to every product that fits.

Sometimes the strongest buying decision is no, because your budget isn't infinite. Whether you're spending. Twenty thousand this season, two hundred thousand, or two million. There is still a limit. Every dollar you give one product is a dollar that doesn't go somewhere else. So I don't want your starting point to be how much can I afford to spend.

I want you thinking: What does this business need, and what do I need these products to produce for me? Because there's a difference. You can stay inside that buying budget and still buy badly. You can spend exactly what you planned. And end up with too much money in products that move slowly, and nowhere near enough in the products that customers want to buy. The buying budget tells you what you have available.

Your revenue and profit targets tell you what that money needs to do, and then your customers' behavior can help you decide which products have earned the chance to do it. That is a far stronger buying decision. And if you start seeing your inventory this way, you also start looking differently at the end of the season.

I don't want you opening your stockroom in January and seeing boxes of things you're now trying to work out how to get rid of. I want the stock to have done its job. It sold. It generated cash. It produced profit. It helped you hit a target, and that cash came back so that you could decide what to do with it next. Because that is what inventory is there for.

So yes, keep curating a fantastic range because that ability is probably one of the biggest reasons that your customer chooses you. And I want you to keep that. I want customers to walk into your store or open your website and think, "Oh my gosh, where did they find this?"

But remember, your job is to allocate cash to the products that are most likely to make you money, because you do not own stock to own product.

You buy inventory to turn the cash that you have into more cash, and every single product must earn the right to receive that money. Now, before we finish up, just a quick reminder that I will be hosting a free masterclass on September 17, showing you how to get your customers buying before. Black Friday.

This is the last one in my Q3 free masterclass series designed to help you make more money this peak season. Hundreds of retailers have already registered and already benefited from the first two sessions,

knowing what products to buy and how to make sure that you don't drain your cash at this busy time of the year. This final masterclass wraps everything up and gets your customers spending earlier.

Register for free at https://salenaknight.com/q3 to save your spot. Thank you so much for joining me. If you are heading into the buying season, I hope this has been helpful, and I will see you on the next episode. Remember, grab your free masterclass spot at https://salenaknight.com/q3. 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 that 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.