To attract customers, your store should be filled with cool products that customers want and need. But finding out what customers want can be daunting. Over the years, I've learned to ask myself three questions before committing to a purchase order:
1. Can I sell it in my market?
A crystal-encrusted upright bass may sell well in Hollywood but could sit on the shelves in rural Kansas. Knowing your customer base will help you fine-tune what will sell in your store. Also, be aware that your customers change with time. I hardly sell any small percussion upgrade items, such as hi-hat clutches, but I have seen a huge increase in electric violin interest.
2. How much of a commitment is the product?
Can you get just one to see how it performs in your store? Can you get it in on approval and send it back to the vendor if it doesn’t sell? Worst-case scenario, can you get your cost out of the item? Knowing you have an exit strategy if the product doesn’t sell in your store will give you more confidence to take chances.
3. Can you make money on it?
This is a big one. If you can’t make money on an item, you shouldn’t sell it. If it’s a loss-leader, it's an advertising expense, not an inventory decision. And if customers are asking for a product that isn’t profitable, I look for ways to suggest a different product that is profitable for our store.
Let’s say you buy a product and it turns out to be a dud. Don’t beat yourself up! Get over it, and move on. Everyone makes bad purchases, and it shouldn’t paralyze your purchasing. Sell that non-selling inventory at any cost to make room for products that people buy.