In the Trenches

STAYIN’ ALIVE

By Allen McBroom

“Stayin’ Alive” was one of the omnipresent anthems of the disco era, and a song that I really hated to play when it came up in the rotation at the radio station. The persistent “ahah-ah-ah- stayin’ alive, stayin’ alive” grated on my nerves after a few hundred plays, and I had pretty much blocked that song — along with the whole disco experiment — from my brain ... until yesterday. Yesterday, I was driving to an appointment, uncharacteristically put the car radio on a pop station, and suddenly the Gibbs were on my radio, singing about staying alive. I never got a lot of sense out of those lyrics, but hearing the song got me to think about the topic of staying alive, and the struggle to keep music stores pumping as we exit what we hope is the darkest part of the COVID-19 pandemic.

For a lot of us, the biggest challenge at the moment is getting inventory to sell. What a challenge that has become. While I’m writing this column well before it hits print, of course, I’m pretty sure inventory availability will still be an issue as you read this. So, let’s talk about some ways to get the increasingly elusive great sellers back on the shelves and how to make as much money as possible while doing it.

Goal No. 1 is to increase margin as much as possible. Believe it or not, most manufacturers (and some distributors) have better margins available in several forms. They don’t refer to it as a better margin, but in reality, that is what it is, and here are some ways to get it. Let’s say you buy a lot from XYZ, an accessory manufacturer. Call your XYZ rep and ask where the discounts are. Maybe there is a two-percent early pay discount. Two percent doesn’t sound like a lot, but if you take advantage of it, your 35-point margin suddenly becomes 37 points. Maybe they have caselot prices and you can save a few points there. Ask about shipping deals. Any time you can shave a few points off your cost by getting discounted (or free) shipping, your margin goes up.

Look at your sales records. If you don’t have records broken out by items sold, look at your XYZ purchase invoices for the last year. You’re looking for the best-selling items you get from XYZ. Maybe by ordering a sixmonth supply or even more, you can pay shipping on that product once in six months, rather than once a month for six months. If you know you are going to sell it if it’s in stock, why wouldn’t you stock

deep and save the shipping? Lower shipping costs equates to higher margins. Repeat this process across all suppliers, and your cost of goods sold goes down, and your margin creeps up.

Talk to your reps, especially the inside reps, and ask if there are any off-the-sheet deals you can use to your benefit. One of our suppliers gives a much better price on case quantities of a good-selling item, and another supplier gives extra discounts for buying a wider selection of SKUs. If you’re really focused on this, call your rep on the last day of the month and see if there is a better deal for a big order that day. Sometimes folks are more willing to help if it pumps up their monthly numbers at the last minute.

Massaging the margin isn’t something to do once and then you’re done. On the contrary, it’s something you should be doing every month. Since every supplier has their own program, it’s easy to overlook a discount or shipping advantage, but if you stay on top of it, your margin will go up.

Let’s talk about our other goal, getting inventory in the store. This can be a toughie, but with some creativity, you can bring up your product count. We stay in close touch with one of our suppliers who has been struggling to get raw materials, and inventory from them has been scarce. Two approaches have helped us keep their products in stock. First, we send them orders on a regular basis, whether they have stock or not. I can’t emphasize how important that is. Most suppliers send product out in the order it was requested, so if you have five backorders for a best-selling SKU, you’re a lot more likely to be in line to get that SKU when it becomes available. Having multiple orders in place means every time they have that SKU in stock, you’re in line to get some.

One of our reps told me recently that he got a call from a customer who was kind of hot under the collar, because he was seeing online that several stores had a hot SKU in stock, and he couldn’t get any. The customer had ordered some last week, and he didn’t have any shipped yet, and he was railing that the bigger store was “getting all the product.” The cold truth was the bigger store was getting the product it had ordered six months ago. The bigger store sent in a regular order and kept its orders in line to be filled when inventory was available. The store that sends in one order and hopes they’ll get some, and then reorders when they are out or low on stock, may well end up perpetually low or out of stock.

Another tactic for getting stock is to ask your rep if they have anything similar to what they are out of. One of our suppliers called recently to say it had a lot of “almost the same thing” in stock, if we wanted some. We ordered a six-month supply of the “almost the same thing,” and selling it won’t be a problem. Another move is to move up the food chain and get a better grade of gear than you usually stock. It’s a lot easier to sell a $599 mixer that you actually have in stock than it is to sell a $399 mixer that’s 120 days out from getting to Long Beach.

Whether you’re looking for the better margin or looking for the elusive product to stock, the linchpin is your rep. They need to move product just as much as you do, so when you can’t get the stuff you want, ask instead about the stuff they have. Talking to your reps and asking some of the questions mentioned here can help you meet your ultimate store goal, which is staying alive.

Happy trails.