Common Issues and solutions found among many stores-
1. High Stock Cover-
- Many of the wholesale stores have a high to very stock cover (10+ months)
Possible causes-
- Over-allocation of merchandise to any given store (sell-in exceeding sell-through) which lead to a buildup of massive product inventories
- Dropping of sales numbers due to the weak economy (rice/rubber prices and the political unrest)
Solutions-
- Solutions for a high stock cover would be to decrease the amount of inventory that is present within the store as well as increase the number of sales. The next couple of problems look at possible solutions in more detail
2. Aging stock-
- A large proportion of the wholesale stores have accumulated significant amount of aging stock that reaches across all the three product sections (bottoms, tops and accessories)
Possible causes-
- The stores built up large stocks due to the over sell-in of merchandise that is now starting to age, contribute to the large proportion of aging stock
Solutions-
- Pair an aging product with a newer product
o Try to pair an aging product with a new, better selling product by offering a discount on the purchase of the aging product. For example, if a customer purchases a new pair of jeans, offer him a discount on an aging accessory or top
o Offer free aging products along with larger purchases of the newer inventory. Give the customer a free belt of t-shirts if he buys two new pairs of jeans.
- Substituting newer products with old ones
o When a customer is considering purchasing a new product, then offer up a better, yet outdated product. For example, offer a more expensive style of an aging 501 jean for the same price that the customer would have received the cheaper, newer 501 jean.
- Discount on outfit purchases
o Offer a 20% discount on the this/the next purchase if the customer decides to purchase a whole outfit that is made up of aging bottoms, tops and an accessory.
- Involving a local charity
o Involve a local charity and donate a piece of aging product if the customer decided to purchase a new products over value XXX. This can increase sales by giving the customer a better feeling about purchasing the good as he is technically responsible for the donation made.
- Structured sales week
o Conduct a sales week where the store tries as much aging inventory as possible by offering a different product at a discount each day of the week. Depending on the amount and composition of aging inventory, have the store decide on the layout of the sales week. For example, if a store has a lot of aging tops, sell the tops for three day of the week, while selling the bottoms and accessories for only two days of the week.
- Offer bulk discounts
o Offer the customer discounts by buying a product in bulk. For example a ‘buy two, get the third one for 50%’ or a discount of XX% if the customer decided to purchase goods of the aging inventory with value of over YYY Baht.