>> Inventory management is the key to differentiating between a shop that
>> goes broke and one that stays in business. More important even than
>> margins.
>
> So how can so many shops afford to be stuffed to the gills with shopworn
> **** that's been there for years?
>
> Matt O
Matt: If only I knew. Presently I'm dealing with this sort of thing in our
apparel inventory. We have way, way, WAY too many choices (too many brands,
too many offerings), so we end up with all manner of odds & ends left over.
Much worse than with bikes, because unpopular leftover apparel just sits &
rots and has little residual value.
Bikes, fortunately, are better off. Assuming a bike has a certain degree of
utility, it's a matter of matching up the bike to a particular customer.
Road bikes generally aren't obsolete for quite some time, so a
three-year-old road bike model isn't such a terrible thing to have on the
floor. Older than that? It's still useful, still has "utility", but tends to
get "lost" and ignored.
One of the problems shared by many small businesses is that the owners are
involved directly in the purchasing, and often don't want to admit that they
screwed up, and thus dead merchandise hangs around longer than it should. If
the buyer was told outright that, by a given date, "x" amount of what's
purchased has to be gone, or else... and at the same time reasonable margins
overall to show for it... then that buyer is probably going to do a much
better job of keeping inventory levels reasonable and not allowing clutter
to build up. But an owner is sometimes too "proud" of his/her decisions and
not able to stand back and say "This **** has got to go!"
I fight this stuff all the time, but for the first time am trying to get
systematic about it. In all seriousness, it *does* make the difference
between survival and not, in the long run. The world is squeezing just about
every last bit of fat out of the food chain (an unfortunate metaphor since,
literally, it seems the reverse is true!), with rapidly increasing insurance
& rent costs, moderately-increasing labor, and steadily-declining margins.
It's very scary math, and I'm not talking about just the bicycle business.
--Mike-- Chain Reaction Bicycles
www.ChainReactionBicycles.com