How to determine the amount of shoe purchases for the next season?
At the beginning of the season of buying a new collection, buyers face a difficult task: they need to take responsibility and decide how many shoes to buy so that they are enough to meet the sales target, and at the end of the season to reach the established stock rate. There is always the question of how to determine the exact number of pairs to sell in retail stores? We are looking for an answer with SR expert Evgeny Danchev, who shares a case from his consulting practice and gives examples of competent sales plan calculations.
Evgeny Danchev -
business coach, consultant, expert in increasing sales of the fashion market. Author of the book "A Practical Guide to Increasing Sales of Shoes and Accessories". Author of sales scripts "60 responses to customer objections in a retail shoe store" and "Standards for retail shoe sales." Creator of an online school for fashion market leaders.
@evgenydanchev, www.wconsulting.su
The classic scheme, which most buyers work on, is not distinguished by a trivial strategy. They buy based on last season's sales and add or reduce an order based on current sales results and market demand dynamics. Yes, such a simple strategy works, but only in growing markets. As soon as the markets start to fall, this buying strategy stops working. You can’t constantly buy less and less goods, because sooner or later this will lead to losses in the company.
The purchase of goods is a kind of equation with several unknowns. Before determining the purchase amount, I always recommend that my clients in consulting projects answer a few questions.
Questions for the preparation of procurement planning:
1. What is the company's break-even point for the year and separately for each sales season? It must be borne in mind that, taking into account rising costs and inflation, the break-even point for the last season, as a rule, is not equal to the break-even point for the next season. Therefore, when calculating it for the next period, it is important to include a correction factor that makes the forecast more realistic.
2. In what phase of the life cycle is each shopping center and your retail store located on its territory? You need to understand that if the shopping center is in the growth phase (new renovation, all trading places are filled, growing or stable customer traffic), then of course we can plan sales growth. If the shopping center is in a recession phase (empty trading places, no repairs have been made for more than 10 years, falling traffic of buyers), then it is necessary to plan measures to stabilize sales. If your stores are not located in shopping centers and work for the flow of people from the street, then do a life cycle analysis of each store.
3. Do you plan to open/close retail stores during the next sales season? The opening of a new store cannot be a spontaneous event, everything must be planned in advance. You need to clearly know your store format, taking into account the required retail space, opening costs and the amount of goods needed for full-fledged work from the first month of rent.
The practical part of the formation of the procurement plan
Based on the break-even point, analysis of the life cycle of stores and development plans, it is necessary to draw up a sales plan for each month for the next season. When the plan is fulfilled by 100%, the company on paper should receive the profit that the business owner expects. I hope you will agree with me that any retail business is opened for profit, which must be planned. The option of doing business “Let's start, and then we'll see what happens” has already buried thousands of businesses in Russia. According to statistics, by the end of the first year of existence of new businesses, 80% of them are closed. By the end of the fifth year, only 3-5% remain on the market.
It is important that when approaching the preparation of a sales plan, we are guided by future goals, and not just look at what was in the past. We need to understand what we want to get, and not think only about problems and limitations. Of course, this approach requires the use of additional resources to fulfill the sales plan. This includes control over the work of sellers, and the correct material and non-material motivation of employees, and competent marketing campaigns.
Based on the sales plan, it is necessary to draw up a financial plan that will reflect all the expenses of the company. In it, we must take into account one very important factor that affects the profit of the company. I mean trade markup.
Case from business practice
One of the leaders of a shoe company asked me why there was an acute shortage of goods in his stores at the end of the sales season, although, in his opinion, enough pairs were purchased for the season.
After looking at the sales report, together we quickly found the cause. Yes, we bought enough goods, only the sales and marketing department got too carried away with discounts and brought down the trade margin on shoes. As a result, in terms of sales revenue, the result was good at the beginning of the season, but the profit decreased and did not reach the required indicators. By the end of the season, not only did the size ranges end, but the total number of models dropped sharply. The new collection had not yet arrived by that time, and it was already difficult to trade the current one. The results of such a detailed analysis were confirmed by sales assistants in stores.
The key idea when planning the purchase of goods is the correct chain of sequence of actions, namely:
1. We determine the sales plan for the season.
2. We determine the average level of the trade margin for the season.
3. We set the rate of residues by the end of the sales season.
4. We take into account the planned balance of goods by the beginning of the new sales season.
5. We predict the average cost of one pair of shoes.
6. We translate the purchase amount into pairs.
Example:
Suppose we calculated the break-even point for the company for the spring-summer season (from March to August) - 10 rubles with an average markup for the season of 000%. That is, with such a combination of numbers, you will not earn anything, but you will not lose anything either.
If your goal is to earn 1 net profit per season, then with a sales plan of 000 rubles and a 000% mark-up, the profit will be exactly 12 rubles (provided that expenses do not increase).
But in practice, the costs will in any case be greater, since the payroll of sellers will increase. Of course, you can make the exact figure for increasing expenses and adjusting net profit yourself, taking into account the specifics of your business.
Let's say you set your end-of-season stockpile rate at 20%.
Suppose the forecast for the balance of the current collection is 2 rubles in retail prices.
Payment:
12 + 000% balances = 000 rubles
Subtract the balances of the current collection 14 - 400 = 000 rubles.
We translate the amount into the cost of goods (markup 100%) 11: 900 = 000 rubles
Suppose the average retail check is 3 rubles, which means that the average purchase price of 000 pair, including delivery, is 1 rubles.
5 950 000: 1 500 = 3 966 pairs of shoes are calculated according to the purchase amount and according to
param.
If you buy one part of the goods in advance, and the second part during the sales season, then plan the purchase, as described above, only for the part that you buy in advance.
Why is it so important to work with customer reviews, analyze them and use them in your work?
How to implement sales funnels in the shoe business
Effective methods that will help improve the effectiveness of sellers
Service in the store: successes and mistakes
Five rules of professional lighting for a shoe store - something that is relevant in any season
We are ready for active development in the Russian market
Friedrich Naumann, CEO of the Tamaris brand, told Shoes Report about the company’s ambitious plans, business development in Russia and expansion of the retail network, and also shared details about new collections and launches.
Coach turned to Big Data analysis and won the interest of a young audience
American handbag brand Coach has planned the success of its Tabby model among a younger audience, Generation Z, by turning to big data analysis, abandoning traditional and analogue tools, such as human intuition or the ability of any executive to sense “which way the wind will blow,” writes B.O.F.
IDOL updates the concept
The IDOL brand, part of the Melon Fashion Group portfolio, opened the first flagship in an updated concept in the Aviapark shopping center in Moscow.
Louis Vuitton opens a new factory in Italy
Louis Vuitton has opened its second shoe factory in Italy. After opening the first one in Fiesso d'Artico in Veneto, the LVMH flagship brand has just opened a new production site dedicated to this category of footwear in the industrial zone of Civitano in the Marche region. There is also another brand production facility in Tuscany, where bags and leather accessories are produced, writes fr.fashionnetwork.com.
The Euro Shoes@CAF exhibition will be held in Almaty
From March 11 to 13, the Euro Shoes@CAF (Central Asia Fashion) exhibition will be held in Almaty at the Atakent exhibition complex. The exhibition, which is the largest international event in the fashion industry in Central Asia, will present collections of clothing, shoes and accessories.
VAGA SHOES is a new participant in the Euro Shoes premiere collection
The Russian women's shoe factory VAGA SHOES will take part for the first time in the international exhibition of footwear and accessories Euro Shoes premiere collection in Moscow.
Euro Shoes will start operating on February 19 in Moscow!
The winter session of the international exhibition of footwear and accessories Euro Shoes premiere collection will be held in Moscow at the Expocenter from February 19 to 22. The organizers promise the presence of all the main participants at the exhibition, as well as new names from Europe, Asia and Russia.
American buyers couldn't buy Birkin bags and sued Hermès
French fashion house Hermès is facing a lawsuit in California from two customers who were unable to purchase exclusive Birkin bags. The fashion house is accused of unfair commercial practices.
John Galliano and Christian Louboutin created the Tabi collection for Maison Margiela
Maison Margiela creative director John Galliano and French shoe designer Christian Louboutin released a shoe collaboration that was included in the Maison Margiela Artisanal spring 2024 couture collection. The design duo created six versions of the Tabi shoe. All shoe models in the collection have a split toe - a characteristic touch of the signature Tabi shoe model of the Maison Margiela brand. And Christian Louboutin gave the shoe its signature red sole.
Why Rendez-Vous and Yandex Lavka released a “bread bag”
Shoe retailer Rendez-Vous announced the launch of a spring collaboration with Yandex Lavka and released a roll that resembles the shape of a woman’s handbag. This “Bread Bag” is presented in the Yandex.Lavka application at a price of 249 rubles. On the product packaging there is a promotional code for 1000 rubles, which can be spent in the Rendez-Vous network.
Camper has released innovative sneakers - designers
Spanish brand Camper's new Roku sneaker features six interchangeable components to create up to 64 different looks and color combinations. Roku means "six" in Japanese.
Christian Louboutin presented a collection in a cowboy style
At the Loubi Show in Paris, the French luxury brand Christian Louboutin presented its fall 2024 collection, following the trend - in the style of the Wild West. It included cowboy boots and rhinestone loafers.
Fashion Week takes place in Moscow
Fashion Week takes place in the Russian capital. Events include fashion shows, markets where you can purchase clothes, bags and accessories, and a B2B Showroom for fashion industry professionals.
Fashion trends Fall-Winter 2023/24 for commercial footwear purchases
Permanent contributor to Shoes Report. Elena Vinogradova, an expert in sales and purchases in the fashion business, prepared an overview of the trends for the autumn-winter 2023/24 season especially for us.
MSCHF and Crocs launch "Big Yellow Boots"
Creator of the Big Red Boots, Brooklyn brand MSCHF has teamed up with American plastic clog and sandal brand Crocs for another oversized shoe. The new Big Yellow Boots will go on sale on August 9th.
Five rules of professional lighting for a shoe store - something that is relevant in any season
When developing a lighting concept for shoe retailers, it is important to take into account not only the history of the brand, the architectural content of the premises, the target audience of the stores, but also the seasonality of the goods. With the onset of the cold season, client preferences change: bright weightless shoes are replaced by more massive models in discreet dark colors. Despite significant differences in summer and winter collections, the overall philosophy of the brand, its recognition should remain unchanged at any time of the year. Tatyana Ryzhova, an SR lighting expert in fashion retail, has identified five basic rules for a competent lighting concept for a shoe store for readers of the magazine, which will help to present winter assortment to customers in a winning way.
Bertsy: what to look for when choosing a model
Bertsy and tactical boots are becoming more and more relevant footwear, and not only because of the start of the hunting season. In Russia, there are several dozen enterprises producing this type of footwear. Oleg Tereshin, Deputy Chief Technologist of ZENDEN, told Shoes Report about the differences and features of ankle boots and what you should pay attention to when buying them in specialized retail and online.
I doubt and object: how to find an approach to difficult clients?
How good and serene would be the work of a salesperson if the customers were calm, cheerful, always knew exactly what they wanted, and bought, bought, bought! It is a pity that this is possible only in dreams. Therefore, we will not dream, but we will act. Together with Maria Gerasimenko, a permanent author of SR, we understand the doubts and objections of buyers and build a strategy for working with them. Our expert pays special attention to the two main objections of buyers, on which 82% of sales are lost.
EURO SHOES presents an updated section of the GLOBAL SHOES exhibition with collections of shoe and bag brands from Asian countries
EURO SHOES premiere collection is expanding. Along with the traditional pool of leading European footwear brands from Germany, Spain, Italy and Turkey, several dozen footwear and bag brands from the Middle Kingdom will be presented in the GLOBAL SHOES section at the Moscow Expocentre from August 29 to September 1.
Two prominent Russian fashion designers Vyacheslav Zaitsev and Valentin Yudashkin passed away
One after another, two days apart, Vyacheslav Zaitsev and Valentin Yudashkin, outstanding fashion designers, whose work for the whole world was a kind of hallmark of fashionable Russia, left this world.
World Footwear Yearbook: Global footwear production reaches 23,9 billion pairs and is back to pre-pandemic levels
The Portuguese association of shoe manufacturers APICCAPS published the 13th edition of the international statistical bulletin World Footwear Yearbook for 2023, according to which in 2022 the production and export of shoes worldwide increased by 7,6% and 9%, respectively, and the world production of shoes reached 23,9 billion couples and returned to pre-pandemic levels.
Rostov footwear brand Novak presented a collection of sneakers and sneakers
In the spring-summer 2023 season, the Rostov-on-Don shoe brand Novak presented a cute collection of sneakers and sneakers for every day. The upper of the shoe is made of genuine leather, suede, nubuck, the sole is made of light EVA.
How to create selling visual content for online based on the identified unique selling proposition?
What is a USP (unique selling proposition) and what is it for? Why is the USP creation service in great demand among fashion retailers today? How to create a working USP? Answers questions and provides step-by-step guidance on how to define your unique selling proposition and work with it to increase online sales, Tatyana Vasilyeva, an SR expert in the promotion and development of fashion brands.
Shoe educational program: what shoe soles are made of
“What is the difference between TEP and EVA? What does tunit promise me? Is PVC glue? What is the sole of these shoes made of? ”- the modern buyer wants to know everything. In order not to smash his face in front of him and be able to explain whether such a sole suits him in soles, carefully read this article. In it, process engineer Igor Okorokov tells what materials the soles of shoes are made of and what makes each of them so good.
How to set prices that will earn
Some businessmen still confuse the concept of margin with the concept of trade margins and set prices for their goods, guided solely by the example of competitors. No wonder they go broke! Analyst at the Academy of Retail Technologies Maxim Gorshkov gives several tips and formulas with which you can set not only ruinous, but also profitable prices.
Sales of shoes and accessories: effective techniques for business rhetoric
Which speech modules are effective in communicating with potential and current customers of shoe stores, and which are not, Anna Bocharova, a business consultant, knows.
We form the salary of sellers: expert advice
“How do you charge your consultants for personal or general sales?” Is one of the most popular questions causing a lot of controversy and gossip on the online forums of retail business owners. Indeed, how to properly form the earnings of sellers? But what about bonuses, where to get a sales plan from, do employees allow them to buy goods at discounted stores? In search of truth, the Shoes Report turned to a dozen shoe retailers, but no company wanted to disclose its motivation system - the process of its development was too complicated and individual. Then we asked four business consultants, and finally became convinced that the topic of seller motivation is very complex, because even our experts could not come to a common opinion.
The whole truth about Bayer. Who is he and how to become one?
Bayer is no longer a new, but still a popular and sought-after profession. It’s fashionable to be a buyer. Buyers are at the origins of the emergence and development of trends. If the designer offers his vision of fashion in the season, then the buyer selects the most interesting commercial ideas. It is on buyers that the policy of sales of stores and what, in the end, the buyer will wear depends on. This profession is surrounded by a magical fleur, often associated with a lack of understanding of what exactly is the work of a buyer.
Technology Selling Issues
There is nothing worse than meeting the buyer with the words “Hello, can I help you with something?”, Because the seller works in the store just to help. Criticizing this well-established pattern of communication with the buyer, Andrei Chirkarev, business coach for effective sales and the founder of the New Economy project, shares the technology of truly selling issues with readers of Shoes Report.
Fur, and not only: types of lining
In the production of winter footwear, various materials are used that are designed to retain heat and meet the requirements of consumers: natural sheepleather, artificial fur, artificial fur from natural wool and others. All types of lining fur have their own advantages and disadvantages. Let's consider the properties of each of them.
The best models of Czech shoes of the past
In Soviet times, for shoes from Czechoslovakia sold under the Cebo brand, customers stood in line for four hours and did not regret it, because Czech shoes were considered to be of high quality, comfortable and fashionable. Shoe designer Juraj Shushka shared a photo archive of his collection with Shoes Report magazine, which contains the most interesting Cebo models from the 1940's to the 1980's.
Retail Arithmetic
Before you begin to solve specific problems, you need to find out how accurately all the leaders of your company understand the basic terminology of retail.
How to fire a worker without tears, scandal and trial
Sooner or later, any manager is faced with the need to part with an employee. Properly and on time the dismissal procedure will save the company money, and the boss himself - nerves and time. But why sometimes, knowing that a break in relations is inevitable, we put off the decision for months?
