Especially for retailers of seasonal fashion goods, buying markets are the most exciting, nerve wracking, and exhausting times of the year. They are also the most critical for continued success. Decisions made in a few long days affect the life blood of the merchant.
Balancing emotions with strategies in the “buy” is the secret. The love of the merchandise, searching for new fashions, staying on top of trends and the art of the “buy” drive the core decisions that should prevail when a buyer is at market. However, just as important is the fiscal restraint of a well considered merchandising and assortment plan that must prevail before the buy is committed and scheduled for delivery to each store. Such fine tuning is impossible to accomplish while at market for even the most experienced buyer.
While there are circumstances that require that “paper” (purchase orders) be left at market, as much as possible a good buyer will hold back final purchase order commitments until they have had a chance to consider their choices. Hasty decisions all too often lead to excessive markdowns.
- Do total dollar commitments meet the Open to Buy plan by classification?
- Is the right mix of vendors well represented?
- Are price points properly balanced?
- Is merchandise properly assorted by size to meet customer demographics?
- Will overall balances as well as some merchandise specific colors be properly represented?
- Are other attributes like fabrics, silhouettes, logos, or other factors properly balanced?
If considering all these factors for a single market isn’t enough to worry about, the merchant must compare the “buy” to past performance, current inventory levels, existing purchase order commitments as well as retaining a reserve for in season buys: both off-priced opportunistic buys as well as fast turning stock replenishment fill-in orders.
That’s a lot to consider! A lot to balance.
While the artistic side of every experienced merchant has a good sense of the right mix, the best decisions are made when emotions are combined with the support of analytical tools that measure overall inventory flow to maximizes freshness and turn rates while considering all the different assortments needed to optimize performance.
The solution is quite simple. If purchase orders are entered into the system before they are committed to the vendors, all the planning, balancing and assortment questions are easily analyzed. “Potential” orders from all vendors can be considered as a whole and rebalanced before final purchase order commitments are made. The only tool needed is the ability to mark a purchase order as committed (or “Sent” to a vendor) to allow for such analysis to be incorporated as a seasonal buy is made. Once an order is emailed to or printed for a vendor, the purchase order is automatically marked as “committed” (even if it must be later canceled later if plans go awry). Adding simple selectivity to include or exclude purchase orders based on their “Sent” or “Commitment” status for on order, planning, and assortment reports allow the buyer or analyst to carefully commit the buy based on thoughtful assortments to maximize sales within proper financial budgeting that assures profitability. Of course, it also aids the buyer in managing purchase orders:
- Assure that all orders are promptly sent to vendors.
- Deliveries are timed to maximize cash flow and maintain merchandise freshness.
- Confirm pricing and accurate merchandise descriptions.
- Front loading the work of defining inventory to expedite newly received goods to the floor as quickly as possible when they are received.
- Makes reporting and analytical tools more helpful as definitions are provided by the buyer while the merchandise is fresh on their minds.
The only down side to entering purchase orders before the buyer is 100% committed is the entry of some orders, lines, or assortments that might not ultimately be ordered. The price of a few unused SKUs is nothing compared to the benefit of a well orchestrated buy.
