Network development specialist Alexei Baranov talks about the qualities a professional buyer should have, in which cases one should doubt his qualifications and how to evaluate the effectiveness of this employee.
Alexey Baranov, General Director of the retail solutions consulting company. For more than three years, he has developed a network of stores of a foreign sports brand in Siberia, has extensive experience in developing retail business in the fashion sector.
A successful buyer is a master of multilevel communication with a clear analytical mind, quick reaction, solid memory and permanently improving qualifications. At the same time, he is a creatively-minded person, gifted with the talent to direct himself and others, a visionary, flexible, striding a little ahead or at least in step with the times. These qualities make up the general basic characteristic that should be inherent in effective purchasing managers, and on which the same non-standard approaches, professional instinct and non-trivial outlook on the world are strung like precious beads. Business owners need to understand that buyer is one of the most important stages of their commercial activity, since there is no marketing policy full of “steps” and innovations, no super-sellers who really learned how to sell and regularly hone their skills using various techniques, no powerful promotion It will not increase profits if the procurement specialist displays an unsuccessful assortment for which there is no demand at all.
The main goals of the buyer
Goal One: provide the store with an assortment, namely the best products, which will demonstrate actively growing sales figures in accordance with the store’s budget, its specifics and target audience.
An example of fulfilling a goal: In order to carry out an order for the autumn period and not make a mistake with the choice of assortment, the buyer raises all the data about previous sales carried out within the same season, and meticulously, position by position, analyzes them deeply. He estimates which sizes were the most popular, which models remained in stock, weighs the specific quality of each specific model from the supplier, the growth and decline in popularity of certain products, recalls who was more active over the past autumn periods — men or women. It is important that mathematical calculations are, of course, the main tool of the store’s purchasing policy, however, it is worth remembering that the buyer as a specialist is appreciated by personal ideas about how and what to sell.
Goal Two: guarantee the timely arrival of goods - at least a month before the peak of sales.
An example of fulfilling a goal: Different retailers and shopping centers have their own rules for conducting sales, but if we assume that the sale in the store goes on until January 15 of each year, then a new collection (which marks the peak of sales) should be delivered to the warehouse around January 10. However, Russian business realities are such that the logistics services and transport personnel do not have time to move away from the turbulent New Year's feasts and are in a state of suspended animation until 10-15 on January. Accordingly, the buyer, providing for possible overlays in advance, already at the stage of the last week of December provides delivery of a new collection, which will be exhibited in the second half of January.
Goal Three: monitor the state of illiquid assets at the current moment. The indicator to strive for is 5%, although in reality the level of residuals is often around 10-15%.
An example of fulfilling a goal: It is known that for the first third of the sales season, the store must realize at least 65% of the total order of the fresh collection. In the pre-sale period, you sell, - not so fast and successfully - yet about 15-20% of the goods, and you put up the remaining products for sale, and ideally 5% of the products settle in your balance. This is an illustration of an almost perfect store situation. If you have not gained experience, have just opened or are not able to sell, then ultimately in warehouses you will have up to 30% of the total order. At this stage, the buyer must acquire exactly those things that will be snapped up like hot cakes in the first months of active sales with the highest trading margin.
Goal Four: carry out operational management of products using effective techniques for the implementation of the remainder of the products.
An example of a goal. If you have a network of retail stores, and you know that a certain amount of illiquid is lying in one of the stores, try to sell this product at other points - this is a fairly popular method of promptly moving products. In addition, you can collect the disparate dimensions of a specific SKU in the store that best sold this item.
Adequately assess whether your buyer is performing the complex of the above tasks, because this is the minimum program that every procurement specialist should own. If you notice the failure of one or more points, then conclude: not everything is in order with your business and personnel or positional changes are required. And the sooner the better. But in fairness, we note that the buyer is also a man. And therefore, if a specialist has not yet developed the whole range of necessary qualities in himself, but you feel the desire for work, potential and iron motivation in him, it makes sense to allow him to develop in the company, because an ambitious professional will surely come out of him. And yet there are two alarming signs that indicate that you are not the right person to be a buyer.
First symptom: Lack of understanding of how important it is to meticulously and scrupulously analyze each sold part in all respects. Non-professional buyers have one feature: when they come to the presentation of a new collection, they focus only on their suddenly euphoric sensations from the products they saw, without taking into account a single mathematical calculation from the goods already sold. Such "specialists", succumbing to the momentary delight from the displayed collection, want to buy everything in a row. They don’t have an adequate attitude to planning the store’s budget expenses, but from them you can often hear such haphazard arguments like “I have so much money for this part of the business”.
Symptom 2: Pathological inability to expand their communication skills. If you are a buyer, then it should be easy and pleasant for you to be in a constant field of active social communication. To make new acquaintances, to acquire useful contacts, to be “surrounded” by 24 24 hours a day, and to maintain trusting relationships with suppliers - all this should be your “driving” business. Business owners should clearly monitor trends in social passivity and inertia among job seekers for a job as a purchaser and weed out those already in the first stages of considering candidates for a position.
How to evaluate the quality of work
The availability of a popular assortment that is easily implemented with the highest trading margins provides not only a competent buyer, but also control over his work by the business owner, and on an ongoing basis. This allows you to make reports, of which at least four exist in the work of a buyer.
Sales vs Stock Report, that is, the availability of goods during seasonal peaks and downturns in sales. Of course, in practice this should not be, but if, purely hypothetically, the supply of products suddenly stopped, you should have enough goods for 2,5 - 3 months in your store. Accordingly, at the peak of sales, you need the largest supply, and the buyer should take care of this by monitoring the availability of goods two months in advance. This report also has a flip side: it is also necessary to foresee that the goods should not be purchased 6, 12, 25 months in advance. Sometimes inexperienced buyers oversaturated stores with goods that subsequently cannot be profitably realized, especially during regular periods of “recession” in sales, when a huge amount of goods is simply sent to illiquid due to a tactical error.
Sellthrough Report, that is, the marketing speed of the collection. For each business with its own specifics, there are dogmas: for example, in food commerce there are no collections at all, products are sold in constant circulation, and only for certain dates - New Year, February 23, March 8 - a certain inventory is needed. As for fashion retail, then, as noted earlier, more than 65% of the collection should be sold in the first third of the season, the month before the sale and the dry balance (its ideal is 5%) should also be analyzed.
Free stock per Operate report, that is, the availability of bestsellers in constant access. Every month you must make a kind of shortlist of 50 best-selling items. The buyer must track their availability in a free warehouse, and if they find the appropriate silhouette in the right color, they must order it, because when people ask something, you should not lose the advantageous opportunity to sell it simply because you do not have it.
Avg Margin Report, that is, the average trade margin. If you understand that some model is not for sale at all, you should not wait for a seasonal sale to reduce the trading margin for this model. Thus, you will only freeze your money until the sale stage. Start selling an unsuccessful article during the seasonal peak of sales - for example, in the second half of January - and already at a discount. It is better to sell this product at a discount, but right away than to wait a long time, so that later most of it will go into illiquid all the same.
What is the role of a buyer in a multi-brand store? Comment by Elena Kabanova, partner of Retail Atelier, a partner with Fashion Galaxy shoe multibrand chain in Moscow and St. Petersburg:
“In the understanding of people who are not from our business, a buyer is a glamorous girl, well-dressed and in high heels, who goes to show rooms, looks through collections, writes orders, and manages purchase budgets. But in fact, the buyer’s work on 50% consists of working with Excel, Access, “1С” or other programs, because the buyer must very clearly understand the specifics of his product matrix for different slices. A buyer in a multi-brand store is a brand manager who is actually the brand’s ambassador within the company. He studies the brand’s audience, plans demand, draws up a budget, analyzes the competitive environment and only then buys the goods and controls everything that happens to him at the stages from wholesale purchases, logistics, payment to the stages of PR, advertising and sales analysis. ”
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