Finding the right vendors!

May 26, 2008 by  
Filed under Retail Suppliers

There are many ways to find the right vendors you want to work with. Trust me, from my experience, there are many great vendors, but also some very poor ones. Many of the high end lines are companies that do not give any flexibility or support to a retailer who is branding their products (believe it ir not).

It still amazes me today how some companies are not looking at the long term profit margin vs short term. For instance, they may want you to order a minimum quantity of $10K with your first order. Since privately owned retail boutiques are not comparable in budget to Neiman Marcus or Bloomingdales, it is hard to invest that kind of money up front. But there are ways to negotiate to bring the minimum down.

Once we did a gift basket to the stars for Oscars in Hollywood, CA, and we negotiated with our vendors to donate all of the products for us. The credibility and the publicity went to our store, and our suppliers were happy to get there products in front of a celebrity audience. This is all due to nurturing a great relationship with vendors. Again we consult with our clients on how to negotiate and work with your vendors so it is win win situation for all parties involved.

Another example, we brought a very exclusive line into our store. It was very difficult to even get a conversation with them when I had frist contacted them. But I knew in my gut that this line would do really well in the store so I was not about to take “no” for an answer. ( I knew based on the target market this was a great match for us. It is very important to know your market before looking into ANY lines you want to bring into the store. )

Eventually, the vendor agreed that it was a good fit, and lowered the minimum opening order far below their usual minimum. Shortly after introducing it, this line became the number one seller in our store AND it was also the most expensive line in the store. If you can imagine, customers would actually pay $45 for a single hand-milled bar of soap. Of course, the line and it’s unique background and history really helped.

But my point is that you have to know how to find products that are well matched to your retail theme and target market. I did a LOT of research to find my products. We would get many of sales reps coming into our store to try and convince us to carry a line in our boutique. 90% of these were NOT well suited to my market, and I passed on them. But, the lines I hand selected through my own research did very well. This is definitly an important aspect of getting launching your retail boutique, and when you spend the time and attention to selecting your products right, your sales will reflect it.

Marketing/PR

May 23, 2008 by  
Filed under Retail Marketing & PR

Marketing your new boutique is so important especially the first 6 months of your launch.  This is the time to get “new buzz” in the community to let everyone know that you are a new boutique that offers a unique and customer service oriented experience. 

Make sure to account for marketing and advertising dollars into your budget for your start-up.  Many people will feel more curious or comfortable shopping at your location after having seen your boutique in a magazine or a newspaper write up.  There are many ways to get free press releases and ads also.  In our ebook and when we do retail consulting we go in depth on how to go about getting free press. 

At the beginning of our opening, we hardly paid for press releases at all.  But we received many articles throughout newspapers in our community.  This saved us a lot of dollars too.  The press realeases actually work much better than ads in some cases.  This is because consumers like to see editors write about a particular brand or a store rather than trusting an ad. It comes off less biased and with more credibility than a paid advertising.  I think people feel more comfortable when an endorsement comes from other people.  It works like “word of mouth” which is the best advertising of all and free !!!!!:)

We received so many clients from reading an article about us in the local newspaper.  Once, I actually got a 2 page article about our store with a colorful picture of our store in a very highly distributed magazine “944” (very popular in southern California for completely free.) We almost could not believe it!  It was a beautiful article and I didn’t spend a dime… ( Just a few well-spent minutes of my time ) :)  Also something to consider;  a paid ad with that magazine would have costed $7000 and it would only be 1/4 of the page. 

Like I mentioned there are many ways to get editors of magazines and newspapers to work with (and for) you to get the word out about your new enterprise. If you would like more information, or would like us to work with you to get exposure, please use our contact form to send us an email.

Have a great Memorail day weekend! Ciao

Customer loyalty

May 19, 2008 by  
Filed under Retail Training

When we first started our retail boutique, I would always do a lot of research on how to keep customers coming back to our store. Many times at the beginning, that would be all I thought about. For me, not only was the first sale from a new customer important, but I also wanted them to keep coming back on a regular basis. I must of been thinking almost too much about it because after a few months of opening the store, I started seeing my customers coming back :)

What I learned is that I was so passionate about the products I was selling that to me when I approached customers, it was like talking to a friend. I really believed in the products I carried in the store so it came thorugh smoothly when it came to “selling” – or should I say, “not selling”. The key is to find products that you truly believe in and know the product inside out. Since our boutique specialized in bath and body, fragrances, and skin care, it was really important for me to know those lines and that industry. The same applies if you are selling clothing or jewelery or whatever it may be, it is always important to know the background and history of the lines you are carrying.

Many repeat customers would tell me that they came back to buy more from our store because they liked the service and the attention to detail with which I presented my products. Customers have to feel comfortable that you know what you are talking about and that they can trust your product knowledge – and if so, they come back and buy from you over and over again. I have built many loyal clients this way.

One of the best ways to approach this is when you first start talking to them, try to connect with them as a friend (not “pretend” to connect, but really do so.) Ask questions or try to find out what they like without coming of like you are desperate to sell to them something. Another way to say it is, just don’t be desperate to sell to them. People can smell that a mile away, and they don’t want anything to do with you if that’s the case.

I often approached them with generic conversations about something that had nothing to do with what I was selling. That way they would feel comfortable talking to me. After a few words of exchange, then I would show them one of our hot seller items. I can tell you that this was how I established new repeat customers 99% of the time.

As a side note: When we first launched, the products we sold in our store were often very new to the U.S. market so you can imagine how challenging it could be selling a line people have never heard of. In the sales process, there is a  phase known as “Overcoming Customer Objections” and one very common, universal objection that retail salespeople across industries deal with is that of lack of familiarity with the product. Anyway, the line that emerged as our most popular, best seller was an Italian made line that had barely been introduced in the U.S.

Retail Merchandising and Display

May 17, 2008 by  
Filed under Product Merchandising

In retail consulting, clients often ask us how to display products and marketing materials within the store to catch more customer attention. From our own experience, I can say that keeping your shelves moderately stocked, simple, and uncluttered, is really the best for a boutique setting. In other words, don’t over-stock items to make it look like the shelves are full to the gills.

The reason was that our products are unique and high-end. It only made sense to merchandise in a way that reinforces this image i.e. unique, high-end, and essentially, rare. The whole concept behind a boutique is that the products you sell are quality and not quantity and there is a uniqueness to them. ( If you were a walmart or a drug store this would not work. :) Another reason to merchandise this way is that subconciously, there is an implication that with only a few items on the shelf, this product is selling fast, and may soon be unavailable (i.e. creates urgency in the customer.)

For example, when merchandising fragrances, bath and body products, we always have marketing or press related displays that go along with the product. If you get press kits from your vendor (you should) and it has been in magazines like Oprah, In style or Lucky then I would suggest that you display that PR piece next to the product.

As an example, many people are always looking for Oprah’s favorite products. My point is that the more press or marketing you have to back up the line, the more customers trust the brand. Just make sure to display these articles in a frame next to the product. If you own a jewelery store or clothing boutique, press kits are key to catching customers attention. In our ebook we go into detail about what kind of vendors you want to work with and how to ask for support from them to help promote their line in your boutique or store.

Retail Business Planning

May 16, 2008 by  
Filed under Business Planning

Starting up a boutique, like any business, is definitely an exciting experience. There are a lot of fun and creative aspects to it. Picking your business name, scouting storefront locations, networking with suppliers, finding marketing partners in related niches, the list goes on. Of course, whatever your chosen product area is, it’s probably near and dear to your heart, which makes it all the more fun.

So, that’s the warm and fuzzy side. Then comes the not so warm and fuzzy. Putting numbers together on paper, deciding on funding options, choosing solutions for employee taxes and payroll….generally all the stuff that induces yawning or sleep in most creative people. Of course, a very common motivation for having your own business is greater financial reward and freedom, and that goes for “creative types” as well. But even with dollar signs in your eyes, the dreaded (by most) “Business Plan” behind your boutique may not be as appealing as all that “fun” stuff I mentioned above. In fact, for a lot of small business startups, the biz plan is either way to thin, or non-existent. No matter how much “fun” it may (not) seem to us, it is very important, and should not be “permanently procrastinated”.

And, under the subject of business planning also falls business financing. Again, I think we can all intuitively agree on how important this is. None of us would get any business off the ground without it. And here is where most would-be entrepreneurs get the most hung-up. The thought process for many of us is “You have to be rich to own your own store or business…” Or, “it will take a fortune to get something like that started…” If these tapes aren’t playing in your own brain, there is a good chance they are being parroted out of the mouths of skeptical friends and relatives if/when you mention the idea of starting something of your own. (My personal policy is NOT to mention a new venture until I’ve already started it – I prefer not to risk contamination with the doubts of others…)

The fact of the matter is, start-up funding requirements can vary widely, from “that’s not so bad” to “ouch, thats a lot of money.” Variables include your own existing resources and talents, average costs for the product area you specialize in, whether your vendors will provide 30-day net right off the bat ( so you can earn money prior to paying them for inventory…) etc.

So, depending on your boutique, you may be able to launch on a shoe-string, or not. If not, you have to decide whether to use OPM (“Other Peoples Money”- could be bank or SBA loans, investors, venture capitalists, etc.) or (God Forbid) your own money. My personal take on this, after having the experience of launching retail and consulting businesses, is this; If your credit and situation allow, go get an SBA loan (in your business’s name i.e. form a corporation) or some other reasonable small business loan program. If this is not feasible, next best is to be using funds you raised (i.e. saved or acquired) and hopefully, follow the “shoe string” route so as to retain as much of your cash resources as you can, and still launch.

What I would NOT do: Categorically, under no circumstances, would I begin to think about using consumer credit (i.e. credit cards) to finance any aspect of my business, except maybe minor expenses such as supplies and gas, to be paid in full each month. This includes so-called “business” credit cards. Those are generally just typically high cost consumer credit lines that are marketed to the business community. They are no less dangerous in my book than any other credit card.

Why dangerous? Because they’re expensive, and can reak havoc on your credit profile should you have a period of struggle (like 90% of new small businesses) at any point in the first 5 years of your business. The other no-no in my book, which may be obvious to most in the wake of the sub-prime lending fallout of the past couple of years, is to put your home or other assets in hock to raise funds for a startup. Granted, a lot of people have probably done this, and some probably succeeded, but bottom line, this is not a sound business strategy. Namely, placing any of your personal assets at risk to fund a business is not good practice. Just read about Trump or Kiyosaki, and you learn that they subscribe to the OPM strategy whenever possible, and specifically, the creation of a corporate entity (i.e. the “corporate veil”) and establish credit specifically for that entity. This shields you from any personal loss in the event the business folds. That way, if the business does not take off, you’ve minimize your liablility, and protected your credit profile. Exactly what Trump did when his business(es) bankrupted, and he somehow came out swinging shortly thereafter and re-built an empire that dwarfed his previous one.

And if you’re a stubborn entrepreneurial type, you’ll want the option of creating a whole new concept, writing up the plan, and getting back out there. That’s really hard to do if you’ve compromised your personal assets and credit the first time around.

Employee Training

May 14, 2008 by  
Filed under Retail Training

It is sometimes hard to find good employees that will committ to a long term position in retail. We found that alot when we first started our botuique in La Jolla, CA. After extensive research and also having had experience hiring and training college kids, I found out a thing or two to keep them motivated to stay, and to sell.

As I often share with my consulting clients, young employees (i.e. college kids) often have a LOT of energy and charm; this is great for retail stores. Offering incentives or commission is a good way to keep them motivated. Also, getting them involved in some of your marketing or product merchandising gets them feeling like they are actually contributing to the overall business (and they are! How’s that for win-win?)

As an example, I usually give each employee a “turn” to do the main window display once a month. I give them total flexibility to do whatever they want with it. Most of them are so creative that I am happy with their performance virtually every time. But more importantly, to them, it’s a chance to show their creative side and take an active role in building our business (notice the word “our” and not “mine”…) That’s because I always emphasize to my employees that we are a team, and we can all benefit from having a truly successful business. Basically, it creates a kind of “pride of ownership”, and with compensation that is, at least partially, tied to performance as mentioned above, each employee arguably does “own” a partial share in the business.

Questions? Comments? Please feel free to express yourself by adding a comment.

Welcome to my new retail blog!!!!!

May 12, 2008 by  
Filed under Everything Else

Hi All,

Suni here introducing our new blog, focused on retail consulting, and our ebook “How to Open a Unique Boutique”. We hope you like our ebook and if you have any questions, feel free to come back and post a comment for us.

One question we get get alot here, after reading our ebook, is how you know when you are ready to start a boutique. In my opinion, there is never a time when you are completely ready. You have to be willing to learn as you go and always be willing to adapt to situations. The most important thing is that you did your research and you have a business (and financial) plan. You don’t have to be rich – but you need to be organized and smart about how you use your resources.

You will learn many ways to do things once you get going and you have to be willing to adapt too. Speaking of new situations, my husband and I are now looking into a new retail venture. Our new concept is based on the Italian theme, but focused on interiors and Italian designer home furnishings.

We are truly excited and can’t wait to get started! We think there is a LOT of potential for this niche.

Again, welcome to our new blog, and feel free to post comments and questions.

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