Checklist For The Furniture Store GOB

Furniture World Magazine

“Going out of Business! Everything must go…regardless of cost or loss! Nothing held back! Save 40-70%…and MORE! You see this on TV; you hear it on the radio and read it in the newspaper almost every week! Our tight economy and the growing number of big box retailers are having a dramatic effect on established, locally owned retail furniture stores. Is a GOB looming in the not to distant future for your store? This is a question no business owner wants to contemplate. However, there are times when it is the best alternative. There are two times in the life of a business that are the busiest, and often most profitable…when you first open your business and when you close your business. When you open a brand new business, curiosity gets the best of consumers and they come in by the carloads! This is great! You get a lot of impulse buying. Add to this some hot prices on your merchandise, due to vender discounts to get their products moving, and you get a truly win/win situation. When you announce to the public that you are Going out of Business you get much the same reaction from consumers. They come in by the carloads curious to know why you are closing and they are expecting hot pricing. If planned and organized properly, a business owner can turn a depressing circumstance into a profitable and exciting GOB event! Now, here is the first question a business owner has to answer once they have decided that the GOB event is the best alternative. “Do I do it myself or hire a professional?” For some retail furniture owners a DIY event may work fine. If you have driven your business over the years through heavy promotions and off-price inventory then you might be able to pull this off successfully. Of course, you could probably give yourself a hair cut too. But, instead, you choose to let a professional do it because they do it all the time…and are most likely better at it than you! Remember, you only have one opportunity to have a successful Going out of Business event. The public, and most likely your city’s officials, will not allow “do-overs”. Choosing a professional consulting and liquidation company to plan and organize your GOB often times saves much more money in the long run than what they charge for their services. Typically, these professionals charge a fee of 10% of gross sales for their services. Be very selective with choosing which company will conduct your event. Not all Consulting and Liquidation companies will have your best interests at heart. It pays to talk to at least 2 of these companies before you decide. Often a recommendation from another business owner who has used such a service can go a long way in helping you to make a good choice. Whether you choose a professional company or decide to do it yourself there are some guidelines for planning and running a GOB that you need to know about. First and foremost, KEEP IT SECRET! When you are planning to run a GOB the worst thing that can happen is that the public finds out about it before you start the event. First thing that happens is that all your regular customers come in and extend their sympathies. That’s a nice gesture on their part. However, most or all of them will postpone plans to purchase until you start the event. If the event is 60 days away this can spell disaster for cash flow! So, don’t tell your employees, your friends, and in some cases even your spouse! Surprise is the most powerful element in a successful GOB. The next item on your checklist, or the professional’s, is to determine the amount of inventory you need to have on hand for a successful GOB. In most successful GOB events a business owner can realize anywhere from 9 months to a years worth of sales in a 90 day GOB event. Most cities will not allow you to bring in additional inventory once the event has started so you need to be prepared beforehand. If you need additional inventory it is always wise to seek out off-price merchandise. Due to a few years of “soft sales” in the furniture industry there is a fair amount of furniture that can be bought at 20, 30 and sometimes even 40% off the regular wholesale price. Buying this kind of merchandise can greatly increase your chances of having a profitable event. Try only to supplement your inventory with products from the best selling categories. Traditionally, upholstery and bedding are the best selling categories. As with most things in our life, timing is everything! If you are among the fortunate few business owners that are not being pressured by creditors to close your business, choose a time to conduct your GOB when you typically have the highest sales volume. Look at your previous three years and determine which 3-month period represents your highest sales volume. Conducting the event during this time will also increase your chances of having a very successful event. The next item on your list of preparations for your GOB event is to quantitatively schedule discounts on your inventory. The most successful GOB events are conducted using planned reductions in discounts. This is the place that most business owners fail when they run their own GOB event. They begin to panic after the first couple of days when the traffic generated by the event do not translate into the kind of sales they were expecting. How do they react to this? They immediately drop their discounts… sharply! By not having their event planned out quantitatively they do not know what level of sales to expect at each planned discount. This is where the professional company saves you money. As with any other successful sales event you need to prepare an ad budget. Contacting the newspaper(s), radio stations, cable TV and other media sources can be tricky. You need to get all pricing for a lengthy campaign but you need to do it covertly. Remember, no one should know that you are going to conduct a GOB event until the day you announce it. That includes the media! Again, this is an area where a seasoned professional can be very valuable to you. They know how to get the best prices from all the different media channels you need to use to conduct a successful event WITHOUT tipping them off as to who is Going out of Business. Remember, surprise is your greatest ally. Now it is time to get the store ready for the event. That means signage and permits! Check with local authorities on any and all ordinances pertaining to the conduct of a GOB. At the same time inquire about ordinances pertaining to outside banners and window signs. Some cities have strict requirements on conducting GOB events. You need to know these and comply with them all. The worst thing to have happen is to announce your event, open the sale and have the authorities come in and close you down for non-compliance! No do-overs, remember! Also think about the need for additional personnel. You may need additional sales staff as well as warehouse personnel to make certain you can handle the additional traffic and sales. Make arrangements for this help discreetly. If possible, don’t arrange for this until you have closed your store to prepare for the event. And last, but certainly not least, KEEP A COOL HEAD! Your GOB event will be profitable, exciting and successful if you maintain your cool. If you keep a positive attitude throughout the event you will most likely get positive results. Unfortunately the opposite is also true. A successful Going out of Business event can be just the ticket you need to surviving one business and creating another! Remember, it’s not the end; it’s just a new beginning! Jeff M. York of Premier Retail Services, LLC has been in the furniture industry for over 17 years at the retail level and as a consultant. Currently Mr. York spends his time consulting with furniture retailers and writing about the industry. His expertise in the industry covers management, sales, customer relations, merchandising and marketing. Questions about this article or related topics can be directed to Mr. York at jeffyork@furninfo.com or call him direct at 336-688-0433.