Gareth Price, UK Divisional Manager at Lynch Sales Company, talks about how using their service can be an effective way in generating extra revenue on redundant products and why it’s better than a typical ‘clearance’ event.
Anyone experiencing an increase in costs inevitably looks at ways to cut back on unnecessary spending. This is all very sensible so long as this doesn’t also negatively impact income. Making the right decision about what is necessary while under pressure is tough.
“I was lucky enough to work in companies that had borrowings, experienced cash flow challenges, rented expensive space, had too many buyers and frequently inadequate logistics,” Gareth explains. “It concentrated the mind. It made us constantly check warehouses, push out deliveries and identify items that had become stagnant.
“This discipline is also extended to the sales floor. Why is that product in the range? What are the sales? Is it any good? How is it serviced? Am I proud of it? If I had a choice, would I buy it again? It made me unpopular with buyers and suppliers, but my stock was pretty clean, sales were above company average and margins better than most.”
Gareth says that furniture retailers should also take a critical look at the stock in their business. What is an asset and what is a liability? “Every retailer has valid reasons to refresh their ranges, try something new and flush out deranged products,” he said. “Every piece of stock has history and clearance will always be part of our story.
“Redundant stock blocks the arteries of a business, creating physical clutter and undermines presentation,” Gareth continued. “Identifying what is surplus is the first stage in getting clean. Shifting it is the next. Many retailers create clearance areas, either within the store or online. Unfortunately, these products are usually stored in low footfall areas or the final button on their website. Out of context, unloved.
“Some retailers mount warehouse sales, unfortunately these also show perfectly good products in a poor light. Running an offsite sale requires marketing spend, disruption to services and a division of resources, so why run it there?”
Gareth added that a Lynch Sale brings “customers to your store so they can see your full range, stock for immediate sale and items available to order”. Incorporating a Lynch Sale, the showroom will have higher density but won’t be turned into a warehouse, with sold items aimed be moved off quickly, allowing replenishment and remerchandising.
“There should always be a price differential between a new order and something that may have been on display for a while, but it doesn’t have to be “slash & burn” if it’s presented and promoted properly,” Gareth revealed. “Sometimes a product needs a dozen people to see it, sometimes hundreds before you find the customer that loves it. Margin misery is mitigated by a good percentage of orders at sale prices. It’s all in the mix.
“A Lynch Sale will bring new customers to your store, clear out unwanted stock, improve your cash flow, create a buzz in your business and set the stage for new, exciting developments.”
For more information call Gareth Price 07974 209761 or visit the Big Furniture Show.
