Tuesday, June 8, 2010

Dealing With Suppliers

In the fall of 2000, I received a call from Nabisco. We had not even thought about working on our scanning service yet, but they read in some of the trade magazines about how Scott Systems Inc. and StoreReport had teamed up with IBM to create a cloud computing environment for convenience stores, and they were interested in incorporating our system in the 100,000 retail locations they serviced.

According to them, they felt if the deliveryman could determine what a customer needed before he pulled away from the warehouse, it would result in millions of dollars in savings to both Nabisco and their customers. They were so adamant about it they even suggested they might pay for the services and offer them to their customers for free. Of course, after Philip Morris acquired Nabisco, December 11, 2000, that was the end of our negotiations.

That got me to thinking. If a supplier was even entertaining the idea of bearing the entire cost of a rollout to 100,000 locations, there had to be a reason for it. In spite of the fact that I was no longer able to deal with Nabisco, the seeds had been planted and I started working on the project in the spring of 2003.

In order to test and perfect such an undertaking, I chose to work with a customer we had been working with for over twenty years. Over the previous two decades we had established an excellent relationship with that particular customer. They were a forward thinking organization and had served as a guinea pig for much of my unorthodoxies in the past.

In the spring of 2004, my customer arranged a meeting with five suppliers to ask for their assistance in implementing our scanning project. In addition to the customer, the group involved two major beverage distributors — one soft drink and one beer, a major grocery suppler, a chip rack-jobber and a local knick-knacks guy. We were assured by each and every one they would cooperate in our research project. The only thing we asked of them was that they send us store purchases electronically.

The basic idea was the supplier would send an electronic spreadsheet, EDI or XML file to us, we would scan the items into the store, match the results to the electronic document received by the supplier, and report any errors to both the supplier and the retailer.

The supplier would be able to track the delivery from the warehouse to the store, and the retailer would notify the supplier of the items received.

Then the inventory would be added to the retailer's stock, sales would reduce the inventory, and audits would correct any losses due to spoilage and shrink, giving the retailer an accurate count of what was on the shelves and how many selling days would cycle before the next delivery. Then the supplier could peer into the retailer's database and see what the retailer needed on the morning of the next delivery.

As it turned out, only one supplier lived up to their bargain and actually attempted to send invoices to our computers. However, very few of the items on the electronic invoice matched up to what was being received at the store. In general, the majority of the items were correct, but the UPC codes they supplied with the supplier's unique ID's were not, making proper identification all but impossible.

We struggled with that supplier for a year. We even offered to come to their warehouse and build an inventory database for them. Since both of us ran on AS/400 mainframe systems, we could have done the job in less than a week. However, they refused, citing of all things 'insurance liability issues'.

Without boring you with the details, let me just say that suppliers do not want you to track the inventory in your stores. It is not in their best interests at the moment. The reason I say this is because I have been dealing with them for seven years and I have gotten that impression time and time again. Knowing what you have in your store gives rise to an exorbitant number of embarrassing errors popping up.

This is very important. Suppliers are not purposely trying to take advantage of you. They just have their own little way of doing things and they don't want their retailers messing with it.

The trouble with most suppliers I dealt with was their systems were engineered in the early eighties and changing it scared the daylights out of them. Most of their systems were set up to assign a number to bins and racks in their warehouse and they really had no provisions for handling the UPC codes on individual items. To exacerbate the problem, they seldom sold retailers what the retailer passed on to the consumer — For example a carton of candy versus a candy bar.

To put it simply, if a customer ordered items, they would order by the supplier number that was assigned to the place in the warehouse where the item was located. And whatever happened to be in that spot at the time the order was received, was what the retailer was shipped.

A good example is those little air fresheners that are shaped like trees. If we looked on the peg where they resided, we would find two brands of the same product mixed together. This system allows a supplier to swap products without informing their customers of the switch. That's why I say one day a specific supplier identification number might apply to Campbell's Pork and Beans, and the next day if might be pork and beans of a different brand. This sloppy way of identifying products often gets out of hand, and what started out as pork and beans and remained so for several months might evolve into a completely different product overnight — any vegetable in a can would do. Asking the suppliers to be specific with the items ordered and/or shipped turned out to be an impossible task.

After a year of struggling with that supplier, we finally decided that we would simply cut the supplier out of the loop. We developed a method whereas items would be scanned into the store by store personnel and the results of the operation would be the store manager would compare the paper invoice to what was actually scanned into the store and discrepancies would be turned over to headquarters to resolve. That's when we started noticing the enormous number of errors on supplier invoices.

In a February 15, 2003 article entitled 'Data To', Progressive Grocer Magazine reported 60% of all supplier invoices contained errors, some 40% were in the favor of the retailer and it cost from $40-$400 to correct even one simple error. We were proving their study to be accurate.

The same article also claimed that $40 Billion is lost in the supply chain each year. If 40% of that money would be in favor of the retailer, that meant that retailers were losing $16 Billion a year due to errors in the way suppliers are doing business. With the remaining $24 Billion being lost by the suppliers, you would think they would be all over this kind of technology. I predict that sooner or later suppliers will begin to research this issue and make the decision to clean up their inventory control problems because it's only going to get worse.

In the meantime, the retailer has to figure out a way to solve his own problems, and that means bypassing the supplier entirely and doing the detective work on their own. Being confronted by invoice errors from all of their customers each day is something suppliers do not want. So, for the time being, instead of cleaning up their inventory control systems, they prefer to ignore the problem as long as possible.

In summary: Dealing with suppliers seems to be a waste of time for the moment. We must clean up the inventory problems in our own stores first. This will lead to arguments and negotiations that will eventually end up with suppliers cleaning up their own inventory problems.

Friday, June 4, 2010

Competitive Cooperation

There are two major classes of retailers. The first includes companies like WalMart, K-Mart, Target and Costco, and the second is simply everybody else. An independent retailer such as a convenience store operator cannot compete against the first class. The 'big boys' compete against each other in their own class and create a hostile environment for the rest of us.

During World War II, the most powerful competitor was the Axis — made up of Germany, Italy and Japan. The other class, we later called the Allies was made up of Britain, France, Russia, the US, Belgium, Philippines, Norway — and so on and so forth. In order to compete against the Axis during the war, countries having issues with one another such as the US and Russia were compelled to cooperate with smaller countries like Australia and Britain to compete against the evil forces that were gobbling up Europe. Otherwise, the Axis would have consumed the world and amassed the power to command control over the Earth. Had we waited a bit longer, Hitler would have been victorious and WWII would have gone on indefinitely.

Think about your competition for a moment. In addition to competing with other convenience stores, you are also competing with grocery stores and department stores, the Internet, car companies, insurance companies — everywhere a consumer can spend his disposable income.

Now, imagine for a minute your market area is a football field. The playing area of a football field is approximately 58,000 square feet. Before companies like Sears and Montgomery Ward came along, independent retailers were able to compete with each other over the entire playing field. "Big Box" retailers like WalMart, K-Mart and Costco have had an even greater effect in this combat area. Now we are competing in a space of only a few square feet. If we don't take action to change the game, soon we will be pushed back into the end-zone.

Some people believe it is useless for us to battle against the Big Box retailers. They believe we must operate in the environment they command and be content with picking up the scraps they leave behind.

World War II buffs may recall Neville Chamberlain, the prime minister of Great Britain from 1937 to 1940, who returned from Germany after his meeting with Hitler in 1938, holding a document known as the Munich Pact. It was heralded as "peace for our time". What it was was a failed act of appeasement with Nazi Germany. It was in fact, a planned co-existence in a world dominated by Hitler.

"The enemy of my enemy is my friend." A good example of this occurred when Hitler invaded the Soviet Union in 1941 and Winston Churchill declared "If Hitler invaded Hell, I would make at least a favorable reference to the Devil in the House of Commons." We had little choice but to make a pact with Stalin to save the world from the Nazis.

After studying the landscape that has evolved over the past two decades, I believe the time has come for drastic action against the first class, the big box retailers, and in order to make a difference, individually, we are incapable of going it alone. At some point in time we must define the rules of 'competitive cooperation' to strike back with enough force to save the independent retailer. The time for the new "allies" to act is now.

Sacrifices have already been made. Many of the weaker operators have already failed or are facing imminent defeat. Those that remain strong must combine their resources into a weapon powerful enough to stem the tide of aggression. We owe it to ourselves, our employees, and we owe it to the American people. Once the last independent retailer has been defeated, it will be too late.

Just as the combined power of the allies became strong enough to defeat Nazi Germany, independent retailers can become more powerful than our larger competitors as they continue to fight among themselves. The Big Boys became powerful through the use of technology during a time when the same technology was out of the reach of their smaller opponents. Today, the technology lies at our feet, but we refuse to pick it up and use it.

I'm talking about competitors cooperating in a non-competitive environment. Hey, we all plug our television sets into the same electricity. After all, who wants to construct their own power plant? Maybe there are other ways we can cooperate for our general benefit.

I have already pointed out how we can share a database of UPC codes (see UPC Codes below) to the benefit of independents. We've not even done that to any large extent. But of all the things we can do to better our chances, the sharing of computing technology is one available that has been totally ignored. Why continue to bear the cost of inferior technology that will become obsolete before you have the time to implement it?

Thursday, June 3, 2010

Finding the Perfect Price

You can sell anything if you put the right price on it, and that doesn't always mean the lowest price.

For example, if I put my JC Penny watch on sale for $50,000, I most certainly will not have success. If I price it at a penny, I won't have much better luck, because potential buyers will suspect it's worthless; and even if I did sell it, I would lose any profit I might have realized in the sale. So in this case, somewhere in between a penny and $50,000, lies the "Perfect Price".

Finding the perfect price on a single item is difficult if not impossible. But, if I have multiple copies of the same item for sale, it's not that hard.

If I have the manufacturer's suggested retail price, that's a good starting point, but nowhere near accurate. Finding out what others are selling the same product for would be more accurate but, time consuming. I could put together a focus group and find out how my potential customers rate the value of the product, or I could simply inquire of my employees and friends.

The problem with determining the perfect price is more complicated than that. The value of an item also depends on the time of day, day of the week and even the season. The value of an item at 7 AM might not be the value of the same item at 2 PM. We sell more ice in the summer than we do in the winter, and beer sales go up as we approach the weekend. And oh yes, the perfect price may vary from one neighborhood to another.

Yet, unless we make an effort to identify the best possible price at a given point in time we are losing money. How much money? I suspect a lot!

The 'perfect price' is defined as the retail price placed on an item to create the greatest overall profit. Neither the margin nor the price itself has any meaning unless we consider 'turns' in the equation – margin, times zero turns, is still zero.

The retail price is like the gas pedal in your car. You can push it all the way to the floor and lose so much fuel efficiency you won't make it to your destination no matter how fast you travel. If you don't push it down far enough, you will get there too late to do whatever it was you were going to do there in the first place.

We will make more money if you sell ten occurrences of an item at $1 profit each, than if we sell one item for $9.00 profit. This is critical in understanding how to maximize profits in a retail store.

In one of my post I used the example of honey buns, saying that from the hours of 2 PM to 4 PM honey buns are just sitting on the sale's floor occupying space, and if you dropped the retail price during those times and notified your customers, you would most certainly sell more of them.

I will use the example of Little Debbie Honey Buns selling in one of our customer's stores right now. They have a retail price of $0.75 with a profit of about $.27. The store is selling 5.4642 a day. That's $1.4753 per day in gross profit. Hardly seems worth the effort, right? Well of course it is, because we are talking about pennies here, and if we thought that way, we probably wouldn't be in the business. So when we talk of small figures like this, we must remember that it's the profit from thousands of little items like these that allows us to keep our doors open.

If we were able to drop the price of those honey buns between 2 PM and 4 PM to $.58, and advertise it as such, we might be able to sell five more in the course of a day and realize an additional daily gross profit of $.50. That adds up to $182.50/year in overall additional profits. Do that with only 3% of the items in a store and it comes to a whopping $16,425 a year that we would not make otherwise. Do that in eight stores - $131,400.

If you are trying to apply this way of thinking to your current technology it might be difficult. You must have an environment where you can adjust your prices from a central location and monitor the results. I would be happy to show you how to do things like this with the technology we have developed over the past decade. I believe it's crucial to the survival of independent retailers.

The Barebones Store

Seven years ago, I stopped at a convenience store that was owned and operated by an Indian family here in Mississippi. The clerk was a Hindu woman dressed in traditional Indian garments. As I approached the register I was surprised to see her husband stretched out and sleeping on the floor behind her. It occurred to me that I was standing in what must have been the most primitive environment for a convenience store I had ever seen.

Walking through the aisles, I couldn't help but notice the contrast between, say a Pantry location, and this bare-bones establishment. Instead of aisles jammed together tightly as to prevent the passing of two patrons and the shelves overflowing with every kind of convenience item you can imagine, I found spacious aisles containing only the basic items a consumer might want. One look convinced me the owner of this store paid meticulous attention to each and every item placed on his shelves.

'How can this guy make a profit,' I marveled. But, after seven years, the store is still there. And it appears to continue to enjoy a steady stream of patrons, buying gas and shopping inside the store. I have no doubt that I will never see this store in the list of bankrupt locations that seem to appear in trade publications with alarming frequency.

Then I thought of other operators I have known, driving the latest model of new cars, playing golf on the weekends, opening new locations to beat the band, stocking six kinds of everything, and still not making enough profit to keep their doors open.

Something's wrong with this picture.

I grew up in an era where local department stores were all but destroyed by the likes of Sears and Montgomery Ward. Then in the sixties and seventies we saw an invasion of new department stores like Globe, Shopper's World, and K-Mart. They began popping up everywhere, competing for market share in a world where we already had too many choices.

Then, one company emerged that all but laid waste to its competitors. I decided it was an interesting study to determine how all of this happened. What I decided was it all boils down to two simple principles. WalMart was successful because they went back to basics and employed technology to become the world's largest retailer.

The Indian fellow I mentioned at the beginning of this story is surviving by employing basic strategies in his store, but he cannot grow without embracing technology - the right kind of technology. Staying small is better than growth without the proper employment of technology. We only have to look at K-Mart to see the proof.

The one-store operator that sleeps on the floor of his establishment will never be rich, but he will survive. If he tries to open the second or the third store, he will fail. Why? Mainly, because he can't sleep in all the stores; but, more importantly, he is a poor candidate to embrace new technology.

Convenience stores remain stuck in a time warp. Very little has changed since the seventies. Business is conducted the same way it was in the fifties, when 7-11's began cropping up in neighborhoods all across the American landscape.

At some point, operators gave up accountability for maintaining their own inventories and left the decisions to their suppliers. In the beginning it was for convenience. As they grew, it became a problem; one they cannot see because they aren't looking. Retail is detail, and 'detail' means items . . . not categories.

At some point we will have to go back to basics and rebuild the industry the way WalMart did. Walmart is not the enemy here. They are the light at the end of the tunnel. Whether we recognize that light as the light of knowledge or an on-coming train depends on how quickly we open our eyes.

 

The True Value of an Item

The true value of an item is determined by how much someone will pay at a specific point in time. There are all sorts of idioms supporting that theory, but, my favorite is, "One man's trash is another man's treasure." I have often wondered what would happen if retail stores operated more like garage sales.

At a garage sale, prices on items are established as a baseline for negotiations. Houses are bought and sold in much the same fashion. The seller expects to be made an offer, so he or she sets the price over and above what he or she expects to receive. In America, we wouldn't think about going into a retail store and negotiating for a pack of cigarettes, a Pepsi, or a new dress. Nevertheless, this negotiation goes on in the buyer's mind with most everything they purchase.

Smart retailers know this and immediately try to control this internal self-negotiation in a myriad of ways. We see it all the time – Sale! Today only! Limit: Two to a customer! and so on and so forth. The perception of 'low price' is more important than 'convenience'. WalMart's famous "Rollbacks" are one example of an attempt to influence the consumer's mind and is no doubt one of the most successful marketing ploys in the history of the world.

When the average consumer enters a convenience store, they often leave their negotiating skills in the car. They know they're going to pay more for items than they're worth, so why bother? In most cases they simply bite the bullet and chalk it up to 'convenience'. That's why we don't see shopping carts in small retail stores. We automatically assume they will leave with only as much goods as they can hold in their two hands.

In our region of the country consumers have trained us to believe that we should expect an average inside sale of only $3.9928 from each and every customer that walks through our door. Simply looking at it from that angle, our only solution appears to be to increase the average sale or increase the traffic count. In other words, if we were drillers in the early 20th Century, we would simply drill as many holes and we could and hope one would strike oil. But, with the advent of computer technology, oil drillers got more sophisticated and increased their level of accuracy ten-fold. Why don't we apply these principals in retail?

The secret to making money in retail is to get smarter. We must manage each and every item in our stores as if it were a tiny, little machine that generates cash. If we concentrate on the smallest common denominators it will result in a mountain of cash. We've seen it time and time again. By making tiny adjustments here and there we can fine-tune our stores so that overall, they will produce the maximum amount of income.

It takes computers to do this. If that tiny, little pack of gum has stopped turning . . . we need to find out why. If a bag of chips is turning but not producing a profit . . . we need to find out why. If an item is turning too fast to produce a profit or one is not turning fast enough . . . we need to find out why. A computer has the time to analyze and affect the smallest, insignificant item in your store, whereas you don't. But, in order to do these things you must have the tools to perform these functions. And the cost of running these tools must be less than the benefit you receive from using them.

As retailers, we must examine every avenue that shows a promise of increasing profits. Only then, will we know for certain that we have done everything possible.

Wednesday, June 2, 2010

Managed Supplier Partnerships

When WalMart created RetailLink in 1986, they required their suppliers to participate. In the beginning, the purpose of RetailLink was to provide suppliers with online access to WalMart sales data and projections. Suppliers began to take an active role in managing WalMart's own inventory.

Later, WalMart expanded their relationships with their suppliers to include a combined effort of delivering goods to WalMart at the lowest possible cost. WalMart began to exert a level of control over their suppliers that was unheard of in American retail. In effect, WalMart said, "You do business our way, or not at all."

Up to this point, everything is well and good. Here we have a traditional, American business using their buying influence to make a profit the best way they know how. But, WalMart has forced a severe disadvantage on the rest of us. Cutting supplier profits to the bone, suppliers had no alternative but to make up their losses by increasing the profits made from independent retailers.

Smaller retailers do not realize the relationships they have with their suppliers leans heavily toward the supplier's advantage. Suppliers charge retailers more than they should because they know retailers are too busy with other things than to negotiate the best possible price. By allowing suppliers to decide what to put in their stores, and at what costs, retailers have put the fox in charge of the henhouse.

If retailers take back control of their inventories, they will learn to negotiate with suppliers for each and every item that goes on their shelves. If you are in the dark as to what inventory resides in your store, you can't possibly know how much of it you have, how long it will last, and how much profit it's earning for you.

If you have a single store, it's easy to see what you have, look at your cost and know what it's making you. But once you open the second or third store, you begin to lose control. It's too easy to turn the job over to someone else.

Suppliers are so busy paying attention to their bottom line, they don't realize that if they worked with their retailers to put the right inventory and the right amount of inventory in their customer's stores, the deliveries they made would increase and they would enjoy greater profits.

We must teach our suppliers to work with us to deliver just the inventory we need at the moment the consumer is ready to buy – no more, no less. We must confront them when they attempt to put 100 days worth of one product on our shelves and not enough of another. We must stop them from using our stores as laboratories to test the popularity of new and unproven products. And most of all, we must teach them our stores are not warehouses to improve their Financial Statements. Unless we do that, they will never change.

JIT means Just-In-Time

You jobbers out there will remember the time when the majors decided to skim all the profits off of fuel, causing the greatest crash in the fuel business in recorded history.

Well, unfortunately, it's time for convenience stores to experience some of the same medicine.

You have cut every expense you know how and the results have been deterioration of image, lower customer satisfaction, and the lowest quality of store personnel I have ever seen.

What do you cut now? I can't think of anything, unless we switch off the electricity and let customers grope in the dark for the products they seek. Cost cutting has seen the end of its cycle. We must try something else in order to survive.

A quick study of WalMart shows us that WalMart has become expert at surgically removing the last vestiges of profit from each and every item that passes through their stores. WalMart has succeeded by creating the "illusion" of 'lower prices'. Yes, I said the illusion, because everything in WalMart is not cheaper, but they make it appear that way.

We may not be able to beat WalMart, or Target, or CostCo, but we can manage our stores better than they manage theirs. How? By managing our inventories better.

There's a methodology we have been ignoring that Henry Ford invented over 100 years ago. I don't know what Henry called it, but we know it today as JIT - Just-In-Time inventory control.

How does JIT work? The principal is simple. We carry just enough inventory to last until the next delivery cycle, plus a little bit more for safety stock. Just a simple move to JIT can save the average convenience store operator $28,000 a store. Then we can operate in a store half the size; or better, we can take that money and invest it in inventory that will produce a profit.

25% of the items in your stores might as well be bags of rocks. It just sits there taking up shelf-space. Another 25% is excess inventory that you don't need. How do I know? Because I ran tests in eleven convenience stores and one variety store for three years and figured it out.

I found products in some stores that had a shelf life of as much as ten years. Most had shelf lives of months. Some a year or longer. Why? Because, your suppliers have turned your stores into warehouses. I didn't say that. Convenience store managers have told me that, time and time again.

Over the years, suppliers and the associations they sponsor have claimed that they know best how to control your inventories, and it turns out they're right. But, best for who? You or them?

Four years ago, I was literally run out of a beer distributor's office for suggesting he didn't need pre-salesmen any longer. Why can't we tell our suppliers what we want to sell in our own stores? I'll tell you why. It scares the daylights out of them . . . that's why.

But guess what. If they would face the facts, JIT inventory control would double their sales, just as it will double yours. And we have the tools to do it.

But there's another reason suppliers don't want JIT. It's because they don't really know what they have in their warehouses either. They know there is something occupying cubbyhole # 2145656. It's probably beans, or aspirin, or even air fresheners. But that's the extent of it.

Maybe it's Libby's green beans the first time they deliver it. Then it's Bush's the next. In fact, it might even be Grandma's Beets three months from today.

Did you know that 60% of all supplier invoices contain errors? And 40% of those errors are in your favor . . . if you could only catch them. But with a cost of from $40 to $400 to correct each and every error, almost all of them go unnoticed. Those figures come from a research project done by Progressive Grocer. They claimed that $40 Billion is lost in the broken supply chain every year.

I once saw a store receive three gallons of antifreeze and they were billed for three cases. The manager should catch these errors, but let's be honest. There are so many discrepancies on invoices, they are probably lucky to catch 10%. The other 90% slips through unnoticed.

So how do we solve this problem? How do we go about doubling the profits in every store? It's simple.

First of all we take an inventory of every item in every store. It takes an average of two people working two or three eight hour days to get it done. We feed that information directly into our computer.

We hook your Passport or Verifone (or any other POS device) to our system and start scanning each and every sale that goes out of your store. If an item won't scan, we either create a barcode for it, or we get rid of it. You don't need inventory you can't track.

We audit the store every day. Not the whole store. Just part of it. It's done by your employees, three hours each day when they would normally be standing around talking about boyfriends, NASCAR and how much they hate their jobs; once in the morning hours, and again in the afternoon. Items that come up short (or over) are put on the top of the next shift's list. An employee who has filched a candy bar on the morning shift, will think twice when the candy bar they stole shows up at the top of the list for the next audit. Using this secure method of tracking inventory allows an entire store to be audited in less than a month - February included.

The next step is, we scan every item that comes into the store. This adds it to your inventory so you know at a glance how many Snickers are sitting on your shelves within the last five minutes. It also lets you see how many days are left before that item will run out. The manager compares the scanned list to the supplier's invoice. If the two don't jive, they find out why.

That's it. At some point you will be able to tell your supplier what you want. We can also tell them what we don't want. From there, it really gets interesting.

Price manipulation to affect turns is where we're headed with this. Just like WalMart.

Let me ask you a question: If Snickers turns five times a day, and Paydays turns five times a week, why are they priced the same? If an item would produce more profit if you could raise its price a nickel, why do we confine ourselves to the next nine-cent rule?

Why not a $0.64 candy bar? Do you know that one little candy bar priced only a nickel higher turning five times per day, adds up to $91.25 in additional annual profits. Doing that with only half the items in your store will increase your profits by $136,875. If you have eight stores, $1,095,000.00 a year in increased profits. Okay, so maybe it's not quite that good. Would you settle for half, or a third, or even a quarter.

Here's another one. If you have an item in your store that's been there for ninety days and hasn't turned at all, why not replace it with an item that will produce a nickel in profits five times a day. There's your $91.25 again. Money you won't get if you do nothing.

But ah, there's the restriction created by the use of archaic price-label guns. Get rid of them. More and more stores are not putting price-labels on products. Shelf tags work better and don't require nearly the time. Electronic shelf labels are an even better idea.

We all know where the economy is going. When inventory costs begin rising weekly, we won't have time to put new price labels on products anyway. Let's throw our pricing guns away and do something different.

Some items sell better in one time frame than they do in another. In fact, some items don't sell at all after their appointed hour.

Take honey-buns for example. I did a study on honey-buns and noticed that they sell like hotcakes before 9 AM. There's a tiny bump at noon and another around 7 PM, but the rest of the time they're just taking up space in your store. Why not use a big screen TV to announce a "Roll-back" in the afternoon. Let your POS drop the price between 2PM and 4PM and let's get some of those delicacies off the shelves and into our customer's tummies. If we can sell ten more honey-buns a day for a $0.25 profit each, it adds up to $912.50 a year. Do that in eight stores and you have an extra $7,300 a year. That will go a long way towards paying the light bill.

You see, when you start thinking about items instead of categories, all kinds of things are possible. Please think about this and let's talk. We can have your first store operating with a system like this is less than one week. Then when you see the advantages, you can roll out each store at your own pace.

Thanks for reading this. I have seen this type of inventory control system make a difference, and I would like to make that difference for you.

Welcome

Welcome to the Convenience Store Forum blog. The purpose of this blog is to assist independent retailers in competing with very large retailers like WalMart, Target and Costco. The plan is to magnify our strengths and attack their weaknesses. I sincerely hope that you can learn from my thirty two years of experience in the retail industry and use that information to make a difference.