Salena Knight 0:02
Hey there, and welcome to the bringing business to retail podcast. If you're looking to get more sales, more customers, master your marketing, and ultimately take control of your retail or E commerce business, then you're in the right place. I'm Celina Knight, a retail growth strategist and multi award winning store owner whose superpower is uncovering exactly what your business requires. To move to the next level. I'll provide you with the strategies, the tools and the insight you need to scale your store. All you need to do is take action, ready to get started.

Salena Knight 0:51
Okay, in today's lesson, we're going to talk about buying for profit, specifically how to navigate trade shows for the best products and the best deals. So whether you are attending your first trade show or your first market, as I know, the US people like to call it, or you are a seasoned attendee, being surrounded by row after row of new and exciting products can be over whelming. But it can also be enticing. At the same time, there with there's new suppliers and new products, all these things that could hopefully end up in your store. But they could end up filling up your stockroom and quickly draining your bank account, even if that's not your intention. And without a clear plan, it's really easy to fall into the trap of ordering stock that is exciting, and that you really love. But it doesn't appeal to your customers. It could even worse end up appearing in every store in your town. Or maybe it will just overwhelm your staff with more choices and more work. So in this lesson, here is what we're going to cover. I'm going to share with you the data driven method, yes data to make sure you know exactly what to purchase. We're going to look at how you adapt that purchasing for trends and seasonal products. And also how to create a clear buying plan before you spend a cent so that you stay focused on the inventory that fits your over arching sales strategy and is the stuff your customers actually want because remember we are buying for profit. And of course, when we are talking about inventory, we are talking all things money pillar. Okay, let me tell you a story. At my first tradeshow I distinctly What is this 20 years later, I remember being so excited. First of all, it was a trade only event. And so for me, it was like I felt like I was someone special. Like I was a real, certified, bonafide certified, maybe I was certified a bonafide business owner. I remember going there and there were aisles, after vials after aisles of products. Now some were really easy to pass by, like the stuff in this picture didn't fit in my store because I sold eco baby products. But there was other stuff that I wanted to buy, just because I liked it. So fun fact, I am currently clearing out my house to get it ready for sale. Remember, this is 20 odd years later that I stumbled across these. I'm going to call them threats. But I don't know that that's actually the right thing. Essentially, they're like a little tool or take a picture, but they're like a little chill

Salena Knight 3:54
circle that is fluted and you saw them onto clothes. And I remember buying those in my first trade show. And I found a packet in a drawer 20 years later, guess what? They didn't sell? Why would they sell I sold eco baby products for zero to two year olds. What would you do with this was a craft item. But I thought they were cute. I thought I could probably use them myself. I didn't need a box of them. And clearly I have slipped them around. I have moved them around a store. I have probably put them on eBay. I've had them on clearance but nearly 20 years later, those damn things have come back to haunt me. It was a very poor buying decision. And those items literally had no place in my Eco baby goods store. I will take a picture. I will add it in just and you can like peanut going even sell makes poor buying decisions. But the simple fact is, maybe I paid $5 for them. Can you think how much money I could have made with that? $5 over two 20 years later, if I had just put that stock or gotten rid of it, moved it on. And worse, still, I should have never bought it at all. I'm going to share with you why how to work out what you should be buying in a minute. But I really want you to keep keep that top of mind is, what am I buying this for. So I don't want you to do that to make the same mistake as me. Because I remember, I still remember being super excited after that first trade show for all of that inventory to turn up. I expected all the boxes, I didn't know any better. And if you've done this before, and I actually talked about this at a trade show I was I was hosting a panel at a trade show. And we were talking about this. And it was funny because every person on the panel had the exact same expectation as me, which was you order and then the next week, your stock would turn up. But the reality is, most of these exhibitors take weeks before they get back to work by the time they've packed down, shipped all their stuff back, processed all their orders and started packing and sending them out. So all of that inventory that I had ordered came in dribs and drabs over months, some of it came well after, after the season had passed, but I had to pay out 10s of 1000s of dollars almost straightaway. And then I was still having to pay money for stock that was coming when I didn't need it. I had spent an awful lot of money for to be honest, not an awful lot of product. And even worse still, when it came in, sometimes I had three or four versions of the same thing. Now, you're not going to do that. If you've done it before, that's okay, we're going to leave it in the past. But let's talk about how we can make sure that the money we spend is on profitable items that sell quickly, you know from the perfect product matrix. And that is a very handy tool to have, you know, isn't the perfect mate perfect product matrix that we want those anything above the line, we want those high volume, high margin products, because we're going to be buying profitable products from now on. Okay, so working out what to buy, this is going to be a data driven method. And that first, and if I'm honest, we've got a bit cheaper. Probably the first second third, maybe even for here in Australia, we have to trade shows big trade shows a year, we have one in February and one in September. I know in America, it's very, very different. In the UK, it's very different. In a loving America, you have standing trade shows where you can just go wherever I think that is a fabulous idea. But it probably took me a couple of years and you know, three or four trade shows to navigate my way through the buying process, I can tell you now there were no informed decisions. And there was definitely no careful planning and no strategic thinking, I just bought what I liked. But my mistakes are your shortcuts. So in order to keep your inventory onpoint. And to keep your spending optimized, not necessarily limited but optimized, you should know exactly what your store and your customers want before you start buying. And that means you have to know what percentage of your sales come from different items and different categories. Simple thing that you can do, go through your point of sale, go through your website, inventory, go through your sale, right, go through all the products sitting in your stockroom, go through all that stuff that you've stuck in a box, you're waiting to bring it back out again and make notes about what has sold and what hasn't. And then look at the gaps in your product range. Now I've got a resource that I'm going to upload for you that will help you go through all of this. But this to be honest, is a really simplified way of knowing what to sell. I would rather you do this than nothing. But this is a little bit shopkeeper. And I know that you guys are all CEOs. And that means making decisions on cold hard data, rather than guesstimate right? The simple fact is, there are apps that can do all of this stuff for you. And it's going to do it better than you. They will analyze your sales history. They will factor in things like vendor lead time and how many your inventory thresholds and then automatically produce a forecast is that word that comes up all the time, a forecast and replenishment recommendations. So here's the thing, this thing is going to cost you money. These apps will all cost you anything from 50 to a couple of $100 a month. But if you are honest with yourself, how many times have you lost $200 due to stock outs, or you've had more than $200 worth of stock? Sitting on your shelves, collecting dust 45 days later, and tying up cash in poor performing products. Yeah, I know. I know I've been there. The answer is all of you guys. So I would highly recommend, I'm going to put a list of apps inside of the resource for you. This one that's on the screen now is called inventory planner. It is the bee's knees. It's about, I think, 200 or $250 a month. But honestly the amount of money you will make because it doesn't just do inventory management. It also does a lot of the cash flow forecasting and things like that. Cash flow forecasting, he does a lot of forecasting, and does cash report, don't quote me on cash flow forecasting. But what it is going to do is tell you exactly what you need to buy. Now, if you don't have one of these apps on your website, or on your POS, then you go back to the simple way of going here, the manual way of going through looking at what's been selling, what hasn't, what is your sell through rate. So your sell through rate is how quickly you sell something. And those reports are generally in your POS and your Shopify dashboard. Alright, so how do we find the facts when it comes to trends, because I said at the beginning, that allowing for seasonal products and for trending products, is really important, because trends are generally what sell, we all know that those Stanley Cups, I mean, I don't understand I don't understand it. I myself have a facings called Hydroflask. And it holds one liter, or 32 ounces for you Americans have water insulated. I think I paid like $40 for it. Maybe five years ago, I've had to replace the lid, I don't understand why you would pay $100 for a cup. But the fact is things trend. And so you should really, really be aware of those trends because they are great way to bring bring people to your website and bring people to your store because they are searching for these things. All of the inventory planning sounds great in theory, but how the heck do you work out what to buy, if you've never actually stocked a specific product before? And this is where being aware of industry and buyer trends is super important. And yes, I can believe I'm gonna say this, checking out your competition, that it's not often that I would tell you to do that. But it is really healthy to keep an eye out on what your customers similar customers are asking for. And what your competitors are, or even more importantly, aren't stalking. So you might go to a competitor's Instagram page. And they might say, Hey, are you stocking those Stanley Cups? And that store owner is like, you know what? I don't do fads, I'm not going to stock them. Like why wouldn't you? Why wouldn't if you know that your customers are asking for a specific thing, you would be silly as long as they aligned with obviously your your brand. You'd be silly not to be stalking those things. So looking at what your competitors are and aren't stalking, looking at what your customers and similar customers are asking for looking at what the trade shows are touting as the next big thing for your niche. So you will know that before any kind of trade show, they all have newsletters that go out. I have written these trend reports. So I know that they are a thing, they will always go out before a show. If you listen to the podcast, Michelle Sharia she talks a lot about what is trending and what is not. Leopard print was huge last year. Again, I don't get it. But if it works for your store, and it is trending, you really should be thinking about how to add that into your product mix. So the other thing I like to do is this is why it's really important to do your research before you buy is go to your Google Analytics, go to your Shopify dashboard and look at the products on your website and find out which one of those which ones are getting the most traffic. Now, it doesn't even necessarily have to be being bought. But do a little bit of research. Why are people coming to your website for that particular product? And then think about potentially why they aren't buying maybe they are buying. But if they aren't buying Why is it because you have a limited color range or a little limited size range? These sorts of things are really important to make sure that you are buying products for profit. And so when you're looking at which products are getting the most traffic, and you can do this in store as well, you go to your POS and find those top selling products. Think about how you maybe can expand the range. Maybe you could get more colors or more sizes. Think about whether there are any complementary products that you could bring in and what could you cross sell, or upsell. So maybe your leopard print was in last year. So let's go with that. Maybe leopard print, you've got a beautiful leopard dream print wrap that you're bringing in. And maybe you might want to bring in a clutch to go with it. So upsells and cross sells are really important when you think about your overall product mix. And then of course, because we're talking about trends, look at your top performing products by season. And how can you leverage those specific items. And I heard someone saying inside of the group the other day that they sell a lot of home wares and rugs and artwork in January. And that is because the area that they're in is hugely populated by Airbnb is it's a very seasonal town with lots of tourists. And so the owners of the Airbnb is will often come up in the school holidays, which here in Australia are December in January, that's our big summer holiday. And so while they're up there, replenishing the things in their Airbnb, the Homewares, the cushions, the rugs, the artwork, all those kinds of things. So think about what you sell by season. And when you go to buy, one of the things we're going to talk about in a minute, is when is the stuff due to arrive. So you may have to be thinking ahead more than just the next three months, you may have to be thinking ahead, even the next six months. And of course, you can ask your customers. But this comes with a huge caveat. Because you know, as well as I do that just because they say they will buy, it doesn't mean they will. Now one of the fundings I have seen happening just over the last couple of years is live streaming from the show. So I 100% think you should have a complete buying plan with a budget before you start ordering anything. But live streaming on the show, live streaming from the show can be a great way to build engagement. And if you're if you're great, I would love you to be taking orders as well, if you have the team power to be able to be taking orders on a live stream while you're at the show, then that's that is the that's the that's the holy grail because people are prepared to put their money down on the spot. So you could do that. And maybe you're trying to pick between two patterns, or two styles or a couple of styles. This is really, really popular, of course, it gives you huge engagement. And if you can get money before you even take an order, that is even better. So these are great ways to analyze trends. But I have an even more favorite way of analyzing trends. And that is the free tool, Google Trends. So Google Trends gives you insights as to how popular a search term is, over time. And the reason I like it is because it helps you identify those seasonal trends. So you want to be able to analyze the seasonality of specific search terms. So things like Stanley Cup, or maybe it's something like rugs or coastal homewares, things like that. And that's going to help you give you some give you some data around the numbers and the types of products that you need to buy when it comes to that seasonal demand. I also love that it helps you it helps show you emerging trends. So remember I said you need to be on top of your game, like you need to be reading industry publications, you need to be following the you know, the suppliers and the trade shows on social media, because they're going to be telling you they're buying a year out, they know what is going to be the trends that are coming up. So you need to keep your ear to the ground. The good thing is Google Trends can help you help show you when a type of a search term is actually rising in popularity. So it means that before something comes becomes mainstream, you can already have it ordered and on your shelves ready for that to explode. And of course that makes you look like you have a really what's the word? trend setting. That's so cliche, like a really trend setting store like you really have your finger on the pulse. Google Trends can also help you when it comes to product launch planning, because it will help you to gauge interest in a particular product. So you want to be launching a product that people want. So free tool. Competitor Analysis is part of it as well. So you can see how those search terms and the products that you sell,

Salena Knight 19:33
how they're trending against your competitors, and also geographical insights. I thought this was really important to put in for people in Europe and people in the US but to be honest, it works anywhere. I know that I used to have multiple stores and what sold in one store even though the other store might have been 25 minutes away what sold in one didn't always sell in the other and we were always moving stuff between the stores to be able to accommodate to be able to accommodate that So geographical Insights is really important because you might be a bricks and mortar store in a country town or in a rural area. And the things that you're stocking may also appeal to somebody who really wants, you know, farm to table or smoke, they want to support small business. Or quite simply like me, it could be that one specific wooden toy really was loved in one area and not in another. So if you're really struggling to maybe move some stock, I like these to be able to see, maybe you have like a wooden train set. And you can see which areas are actually searching for wooden train sets. And then maybe you do some ads that maybe you put your marketplace there, whatever, but it means that you can find places to sell stuff. All right, now we're talking about, you've got the data, and you're ready to buy. Now we're going to be talking about creating a clear buying plan. So as you make your way around the trade event, it is important to keep in mind that any inventory that you select, will impact all of those five core pillars of your business. And so before you finalize any orders, here are some questions for you to ask yourself. And this is all in the in the guide that I've created for you. Money does this offer the margins and the trade terms that I need to keep my finances on track? So is it in the perfect product matrix, one of those high volume, high margin products, and you'll be able to sort of start picking these things without the matrix, the more experience that you get, and the more that you use it. When it comes to sales, how quickly and effectively will I be able to sell this. And so that's really important if you are looking at a great product, but you're you're in store and your team has to spend 10 minutes explaining it. That's not the most effective item. And likewise, that same product might be a better online product, because you can have videos and you can put all the information, you can put product guides, all those sorts of things inside of your product page. When it comes to customers, there's one very relevant for me, am I choosing this product for me? Or for my customers? Marketing? can I effectively market these products? And will this brand help me? So that's things like in your perfect product matrix? Are there images like does the does the company have images, because if you have to take photos, that's a cost to you, other suppliers or distributors willing to work with you to come up with some offers or to come up with bundles, things like that. All those things affect whether you should buy a product or not. And of course, impact will these products helped me stand out from my competition, or helped me offer my customers something different. So they're the things that you're going to keep inside of the back of your mind. But there are of course, when it comes to creating a buying plan. And I do have that in the guide for you. There are some other things that you need to be aware of. And these were things that I seriously should have known before I went into my first, second, third and fourth, maybe the fourth one, I was probably a little bit more savvy, but have a budget have a budget per category per range per supplier per product type. Quite often I will see people separate money out over categories. So let's just go with fashion because it's easy. Looking at your historical sales data, you may be sell 10% In outerwear, or 30%. In shoes, 50% in clothing, and what's left, maybe 20 20% in accessories. So in that case, you you allocate your budget on that based on how much inventory you already have left. So if you have loads of accessories, you know, you need to clear them out. But in the meantime, you may not buy you may not allocate 20% of your budget. So this is where an app can come in really, really helpful. Because it's going to work out exactly what you need to buy. And it's going to take into account things like vendor lead time, and also how much you have on hand.

Salena Knight 24:13
Think about the purpose. Is it expanding the range? Is it a cross sell or upsell? Is it a new item? Is it trending? Is it seasonal, and budget for each of those. So something like Christmas, your seasonal budget and your training budget might be a lot bigger. But then post Christmas, what you really want to be looking at is expanding your range bringing in new lights expanding your range is it of maybe getting different colors or different sizes of those really popular products. Post Christmas, you probably want new items in to replenish your shelves and to get your customers coming back. So think about a budget for each of those because if you're just expanding your existing range, then that may not be enough for new customers to come in. But you've done your research, you've seen what's trending, you've looked at the things that are selling well, make sure you always have those cross sales and upsells. Like, always think about, what is the thing I'm going to upsell with this, whether you're doing it now, or you're, it's something you need to put in, you want to be increasing their average order value. So you have to have those, you know, 1020 3040 $50 items, depending on what your price range is that you can add. So if you sell shoes, maybe you have, on the lower end, some leather cleaning wipes that retail for 10 or $15 a packet, but then you might have a full leather care kit, which sells for 50. Think about those kinds of things and budget for each of them. Haha, factor in shipping, and potentially any other costs. So this one got me the first time, I didn't realize, because this was my first trade fair, I didn't realize that the shipping cost from some of these suppliers were going to be as high as they were. I mean, in some cases, they were several $100. And so I hadn't factored that in when I thought about pricing. And then other people had other costs. So sometimes there was a finance cost, or one of them even had a packing costs. And that really annoyed me. So be really clear about what costs are associated with buying at the tradeshow. And also be really, you're being really mindful of the fact that quite often there will be discounts on the day, free shipping is quite a good one. But they might be like pay early for a 2% discount. Now that sounds really great. And you're probably like, well sell 2% discount on $1,000 order. But my question to you is thinking about it, they're thinking about this with your CEO hat on this, let me get my calculator out what is 2% on $1,000 Is that 21,000 times point oh two, yeah, that's $20, like a $20 discount to pay up front. Or for $20, you get maybe 30 or 45 day trade terms. And in the meantime, you have all that money to be all that time to be selling that product to bring in the money. And you can also use that money to buy other products. So to me, spending $20 to get the 2% discount is not worth it. It's up to you. This is not financial advice. But you need to weigh that stuff up. Be clear on your lead times, and when things are gonna be delivered. Because don't be like me, when the seasonal stuff comes very out of season, and then you're stuck with product, you've got to pay for it. And then you quite often will have to discount it as soon as it comes in because it's not relevant anymore. And know your payment terms. It's very rare for new suppliers to give you those trade terms right upfront, sometimes they will. But make sure you ask make sure you know do you have to pay deposit upfront is an indent order, where you get 30 day trade forms is a pro forma invoice, which means you just pay and then they ship it out to you? Or is it pro forma for the first three deliveries that's quite standard as well. And then after that, you can go into trade terms, but you want to be forecasting your cash flow. So the more stuff you can defer paying for, generally speaking, the better for you. So in the accompanying guide, you will be able to create a clear plan before you attend the show, to keep track of your orders, to plan for your inventory arrival dates, to negotiate trade terms to ensure that you have adequate profit margins, manage your cash flow and your imagery numbers. And make sure that the time at this show is also fun and educational quite often shows will have training sessions or networking events. 100% take this opportunity to go to those. And also stay focused on the products that actually fit your overarching sales strategy and will provide a profit for you. You know that I am a bargain hunter. And these days, I try to be more savvy in my spending and avoid impulse decisions that may lead to poor products choices and financial losses. So because I'm a bargain hunter, I'm always looking to get the best deal. So you now know that maybe a 2% discount isn't the best option for you. But ask for things like what are the trade show offers? I'm surprised that so many suppliers don't actually have trade show offers, but if you ask them, they'll just come up with something and free shipping is always a good one for you. Also, gifts with purchase is great anything that will help you move the product. try and negotiate favorable payment terms such as extended payment periods, low or no deposit for indent orders. You want to maximize your cash flow. They want to do it for themselves. You need to do it for you and build really strong relationships with suppliers to gain access to exclusive deals, products, and information about upcoming launches. And always ask about collaborating, always ask if they can come up with a specific bundle for you like an exclusive bundle for you. Or even if you're a bigger store, maybe you get your own color colorway, I've done that quite a few times where they've launched a specific color or made a specific color or print just for my store. Mastering the Art of tradeshow buying requires a really strategic approach that does have to combine research, effective negotiation, evaluation of your products, and evaluation of your suppliers. And so if you do all of this going into a show, then there's a very good chance that you're much higher chance that the products that you buy will be profitable, and they will sell. Alright, let's just recap what we talked about. We looked at that data driven method to work out what to purchase. So that was using the the apps or going through your point of sale, your website and all those other things right back at the beginning, we talked about how to adapt for those seasonal trends and seasonal products, and how to create a clear plan of what you're going to buy and when before you spend a cent. So that's a wrap. I'd love to hear what insight you've gotten from this episode, and how you going to put it into action. If you're a social kind of person, follow me at the Selenite 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. I'll see you on the next episode.