Although it is possible to simply drop a low profit item from inventory, such a
procedure narrows selection and may leave gaps of space within your store. It is generally
better to first locate replacement merchandise before phasing out undesirable products.
This is especially true where an entire merchandise line is involved, since simply
dropping the line would create lower overall volume and less sales with which to carry
your fixed costs.
Replacement of an undesirable product begins with a search for merchandise that might
be useful in your store. Such a search can include steps used to initially decide on the
merchandise lines to carry. You might:
- Look at what competitors in similar stores offer.
- Obtain suggestions from sales people.
- Carefully listen to customers about the kind of things they are looking for; talk to
customers about what they like in other stores.
- Carefully read the trade literature.
- Look at the advertisements in chain stores and department stores.
By remaining alert and using these methods, you will gradually acquire new items to
carry in your store and will be able to see whether these items improve your
profitability. Sometimes entire lines of merchandise can be added this way.
Once you have introduced a new product or line, you must support it with:
- In-store promotions
- Advertising
- Sales efforts
Customers first must be aware that the line can be purchased in your store before it
will become profitable for you. It is only after all sales and promotional efforts fail
that it is probably best to mark dawn and sell remaining items and start again with a
different item.
This is a gradual and difficult process, of course, but if you persevere, continue to
identify those items that are least desirable, and slowly attempt to replace them,
gradually the profitability of your store is certain to improve.
