10 Tips For Boutiques To Save Money And Increase Buying Power
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By: Fiza Khan
Let’s face it: Keeping a small business afloat is no easy feat. Boutique owners need to stay on top of their game and take every opportunity they can to save money and increase buying power. The fashion industry is ruthless and unkind, so it’s important to have your house in order and have your finances locked down. In this article, we will dive into ways you can save money to increase buying power as a boutique owner. These tips are applicable for any business but especially for those operating on a budget as a boutique owner with limited funds to invest in inventory at wholesale prices. Read on for 10 practical advice that will help you optimize your cash flow as a boutique owner.
Set a Calendar Reminder to Re-evaluate your Buying Habits Quarterly
Each quarter, take time to review your buying habits. How did your wholesale buying habits change from the 3-month period prior? What have been the successful trends in your buying? What have been the misses? In this review, be sure to note items that you bought and can easily get rid of. There is no harm in not keeping an item if it’s not moving. The only harm is not knowing why it’s not moving, as this can help you improve your buying and merchandising for the future. We’ve all had items that just sit in our store and don’t sell. It’s important to not only get rid of these items, but also take note of why they don’t sell and improve your buying habits for the future.
Only Wholesale What You Know Will Move Quickly
With the exception of a few items, you want to be buying items that you know will move quickly, especially if it’s your first year of business. It’s important to remember that you are buying at wholesale prices and you need to sell it with mark-ups to turn a profit and stay afloat as a new business. When you first start out, only buy merchandise you know will move quickly. This might mean dropping a few styles of t-shirts that are a bit more complex or have a higher price point. This will help avoid cash flow issues from items that don’t sell quickly, which can keep you from buying at wholesale in the future.
Smaller orders = More Frequent Rotations
When you are starting out and buying only what you know will move quickly, it may mean buying smaller quantities. For example, if you know that a certain style of t-shirts will move quickly, but you need a minimum order of 50 for that particular style, you might have to break down and order the minimum. This is okay, but keep in mind that you will need to rotate that product every three months. If you are able to, try to stagger your orders so you can cycle through your inventory more frequently. If you have, say, a shipment every month and are able to break your orders up so you’re only ordering one style or one type of product per month, you can keep the same inventory in your boutique for just three months instead of six. With frequent rotations, you can keep your boutique looking fresh without having a ton of inventory on hand.
Constantly Research What's Available in the Market
This is a very important tip, especially when dealing with new suppliers and new lines. You want to be constantly researching what is available in the market. When you are sourcing, you want to be able to compare what is out there and what you are currently buying.
Once you find a supplier or a line that you are interested in, you want to be able to look at what other people are buying. Do they have similar items? What are they selling better? What is less popular? What styles are trending at the moment? When you are constantly researching what is available in the market, you are able to better navigate the waters and find suppliers that have items you know will sell. You can avoid suppliers that are constantly producing items that don’t sell and find ones that have the type of items you want to carry in your boutique. This will help you save time and effort when searching for suppliers and give you more buying power when comparing prices with other vendors.
Ask the Right Questions When talking to Suppliers
When talking to suppliers, it’s important to ask the right questions so you can weed out bad suppliers and only work with the best. A good supplier will ask you questions too, so be prepared.
Here are a few questions to ask:
-> What is your current buying volume?
-> How many different styles do you have?
-> What price points are you currently selling at?
-> What are your best-selling styles? What are your slowest-selling styles?
-> What are your payment terms?
-> Do you have sample swatches available?
-> Do you have sample garment(s) available?
-> Are your samples free of charge?
-> Are the shipping times consistent?
-> Are you able to access my desired fabric prints?
-> What is your lead time on orders?
-> What are your minimum order quantities?
-> What type of payment do you take?
As you are talking to suppliers, make sure to write everything down so you don’t forget anything. If a supplier doesn’t offer a particular service that you are looking for, make a note of it so you don’t forget. It’s important to know exactly what you are buying and what you are getting for your money.
Save Room in your Budget for In-season/Immediate Orders Each Month
Each month, plan to order a percentage of your total inventory so you can keep your boutique looking fresh. Shop owners should always be thinking about their next order and what new merchandise they would like to add to their store.
To stay ahead of the game, put a percentage of each sale in your budget for immediate re-orders. The key with this method is to not go overboard and order more than you can sell. Be sure to check your sales reports and track your numbers closely to make sure you are ordering the correct amount each month. Boutique owners should be constantly thinking about the next order. This will help you keep your boutique looking fresh and new merchandise rotating through your store, which will result in more sales.
Don’t you want your stockroom staff to do this happy dance?
However, for this strategy to be fruitful, you need to find the vendors that are good with immediate orders. At OFFPRICE Show, we work with vendors who are reputable and will provide products at a price that is attractive to you with immediate shipment, so you can save money and increase your buying power. This is helpful for any business but especially for those operating on a budget as a boutique owner with limited funds to invest in inventory with frequent rotations at wholesale prices.
Partner with Other Retailers to Create Buying Groups
If you are able to find a handful of other boutique owners in your area and can form a buying group, you will be able to negotiate better pricing with your suppliers and be able to buy in bulk at a cheaper price per item. A buying group is a great way to save money and increase buying power, especially if you are just starting out.
When you partner with a buying group, you can buy at wholesale prices, but you will be required to purchase the minimum quantity. This is where the group comes in and helps you meet that minimum requirement. Having a group to help you meet the minimum requirements means you have more money to spend on other things, like marketing your boutique and keeping it stocked with new merchandise. This can help your boutique grow faster since you have more cash to put towards things like advertising and marketing your business.
Don’t be afraid to mark things down (and increase prices too)
Nothing is more valuable to a boutique than having happy customers and repeat business. If you have items that are not moving or have been sitting on the shelves for a while, it may be time to mark them down. If you have an item that is only sitting in your boutique because it’s too expensive, it’s worth considering lowering the price of that garment. If you have an item that is not selling and you have tried everything you can to get it in the hands of a customer, it may be time to consign the item or mark it down to get rid of it. You want your customers to be satisfied with the items they purchase from you and feel like they got a good deal. This will help you maintain your reputation and keep your customers coming back for more.
Establish relationships with trusted manufacturers and suppliers.
As you are starting out, you will likely have to work with a number of different suppliers. You want to make sure that you are making the most out of these relationships and building long-lasting partnerships. Start by identifying top producers—those who consistently produce high-quality products at reasonable prices. Then, add them to your online list of preferred vendors. This will make it easier for them to find you when they start looking for new customers. Once you've secured these relationships, you can start building trust with your customers by offering exclusive discounts and special promotions. And if you have any questions or concerns about their products, don't hesitate to reach out to them directly.
Conclusion
Whether you’re running a small, local business or have a larger clothing line, saving money and increasing buying power are essential in making your money stretch as far as possible. One way to do this is by making sure that you have a good buying and merchandising plan in place. By setting a calendar reminder and re-evaluating your buying habits quarterly, you can ensure that you are buying the best possible merchandise at wholesale prices. When you’re ready to buy more, ask yourself these questions and make sure you find the best possible supplier to fit your needs: What type of product is your company selling? Where will you be selling them? How will you be selling them? What are your current wholesale prices? What types of payment do you take? What type of customer are you looking to target? While there are many different ways to save money and increase buying power as a boutique owner, these are a few of the most effective. And finally, be efficient with your time. At the OFFPRICE Show you will find many of your tried and true vendors, along with new ones that can help you source product with high margins.