The Traveling Retailer's Tip #32: The Bakery Store Inventory
Furniture World News Desk on
11/21/2016
By Gordon Hecht
For culinary delights nothing beats a good old-fashion bakery. Before the days of plastic-wrapped white bread almost every small town and big city neighborhood had a local baker who provided bread, rolls, and cakes. In some area you could even bring in your holiday turkey to get cooked in their oven.
Being a baker has different challenges than our home furnishings business. While both businesses need good inventory control, baked goods have a short shelf life. You can still get a few hundred bucks out of a 2014 Bonded Leather Recliner if you still have one left in the back room. But yesterday’s pumpernickel sells for 75% less than it did 24 hours ago. Two day old bread is bird feed! Production planning and inventory management for bakers is key to their net profit!
Imagine you traded in your business for a bakery shop. You might start work earlier-but could close up shop at 5 pm. After a couple of weeks you would know the flow of demand-how many of each item you would sell during each day of the week and weekend, and could plan your production accordingly.
Here’s a riddle for you. As a baker-every day you close shop at precisely 5 pm. In your ideal world, how many loaves of bread would you want to have on the shelf at 4:59 pm?
If you went with your gut, the obvious answer would be…no loaves on the shelf. You would have no excess inventory-no reduced price inventory, and no waste! Since at heart (and not at gut) you are an entrepreneurial merchant you may change your answer to ONE LOAF. Merchants know that if they have no inventory on the shelf it is more likely a result of running out TOO EARLY and missing demand for more products. If you had no loaves at 4:59 pm, it may also mean that you had no loaves at 3 pm-thereby missing the dinner rush. Seeing one loaf on the shelf means that you maximized every possible selling opportunity.
While we are all interested in making a LITTLE MORE BREAD (as we used to say back in 1968) we are not bakers. But we can learn a lesson from those men and women who rise early and then use yeast. And it’s never more important than on Black Friday. And that is to have one extra item on the shelf at the end of the day.
Black Friday is a bargain hunter’s paradise. If you hadn’t heard-in 2016 Black Friday’s name got changed to BLACK NOVEMBER! Meaning-it’s already started. Your incoming buyers are looking for bargains. The more savvy bedding retailers are offers AT LEAST one loss leader-be it a $79 twin mattress, $188 queen mattress, or $1 Bed frame and pillows. Whatever your HOT BUY is-take time NOW to order one more of them. You do not want to run out, no matter what the profit margin is. You will only disappoint your shopper after spending time and money to bring them in. And they will find it elsewhere. Even if you don’t sell it during Black Friday-we are getting into the heavy holiday period when your shopper needs immediate delivery. And when all things are equal between you and your competitor-SPEED is the DECIDING FACTOR!
…and what happens to that last lonely loaf of bread on the shelf at 5 pm. You probably figured it out. Before locking the bakery shop door, the baker takes it home to eat!
Gordon Hecht is a Growth and Development Manager for National Bedding Company’s America’s Mattress stores, nearly 400 locally owned and operated bedding stores across the country selling Serta-branded and America’s Mattress-branded mattresses. He started his 30+ years experience in the Home Furnishings industry in Las Vegas, NV as a delivery helper and driver.
He has been recognized for outstanding sales and management achievement with several organizations including Ashley Furniture HomeStores, Drexel-Heritage, RB Furniture, Reliable Stores, and Sofa Express. He has served as Store Manager, Multi-unit manager and National Director of Sales. With his first-hand knowledge of our industry’s front line, Gordon has devoted his career to guiding others to exceed their goals.
Joining National Bedding Company in 2014, as part of the Serta Retail Concepts Group With over 400 stores, America’s Mattress stores is one of the fastest growing bedding retailers in the country.
Co-author of the “Better Bedding Selling Tips” featured on Furniture World Online, Gordon has been a frequent contributor to company newsletters, and contributing writer for industry magazines.
Read other articles by Gordon Hecht