1. Merchandise Management: Buying and Handling the Merchandise Mix Chapter 9

2. Goals for Chapter 9

8. Retail Logistics

14. Merchandise Buying

20. Buying Process

28. Methods of Merchandise Planning

34. Determinants of Merchandise Mix

43. Exhibit 9.1 Dimensions of and Constraints on Optimal Merchandise Mix Dollar Merchandise Constraints Merchandise Turnover Constraints Space Constraints Market Constraints Optimal Merchandise Mix Variety Depth Breath Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

44. Pricing by Vendors

52. Merchandise Ordering

58. Merchandise Handling

62. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

63. 1. Failures to analyze previous year’s merchandise results before going to market or making purchases . SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

64. 1. Failures to analyze previous year’s merchandise results before going to market or making purchases . 2. Failure to have kept records from the previous year. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

65. 3. Determining only the quantity and leaving the merchandise selection to the vendor, especially size and color selections . SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

66. 3. Determining only the quantity and leaving the merchandise selection to the vendor, especially size and color selections . 4. Using too many vendors. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

67. 5. Merchandise whose sizes and/or colors were wrongly bought or in too large quantity or were wrongly delivered and prove to be disproportionate to customer demand at regular prices. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

68. 5. Merchandise whose sizes and/or colors were wrongly bought or in too large quantity or were wrongly delivered and prove to be disproportionate to customer demand at regular prices. 6. Not helping out inexperienced buyers . SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

69. 7. Failure to know the selling season for your market. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

70. 7. Failure to know the selling season for your market. 8. Buying too many items rather than just a few styles. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

71. 9. Buying too many hot, new styles. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

72. 9. Buying too many hot, new styles. 10. Failure to make small initial purchases, that can be followed up by reorders. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

73. 11. Failure to determine if buyer can deliver on time the merchandise ordered or accepting changes by the manufacturer. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

74. 11. Failure to determine if buyer can deliver on time the merchandise ordered or accepting changes by the manufacturer. 12. Buying too broad of a product line. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

75. 13. Failure to cancel past due orders. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

76. 13. Failure to cancel past due orders. 14. Making the last re-order once too often. The last may arrive just in time to be marked down. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

77. 15. Failure to negotiate all possible discounts from the vendor. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

78. 15. Failure to negotiate all possible discounts from the vendor. 16. Failure to study the market sufficiently so as to know the best quality merchandise and best price. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

79. 17. Failure to ask one of the following questions: a. “Does your company substitute ship?” b. “Does your company backorder often?” c. “How long has your company been in business?”. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

80. 17. Failure to ask one of the following questions: a. “Does your company substitute ship?” b. “Does your company backorder often?” c. “How long has your company been in business?”. 18. Failure to shop the competition so as not to buy identical items. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

81. 19. Failure to talk with the central office (where applicable) in order to see what other buyers services are offered. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

82. 19. Failure to talk with the central office (where applicable) in order to see what other buyers services are offered. 20. Failure to buy enough merchandise, resulting in lost sales volume. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

83. 21. Buying your personal preferences, instead of the market’s preferences. SOME COMMON BUYING ERRORS Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

84. Maintain Higher Turnover Goals CONFLICTS IN BUILDING A MODEL STOCK PLAN Maintain Strong In-Stock Position in Genuinely New Items Avoid the 90 Percent of Products That Will Fall During Introduction Stock Basic Popular Items Have Inventory Dollars to Capitalize on Opportunities Maintain High Margin Goals Have Selection Don’t Confuse Customer Utilize Space Don’t Congest Store Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.

85. Summary