Mine Your Own Business

Mom

Sunday is Mothers' Day, the day we set aside to give mothers a small portion of the credit they deserve.  When a child is born we call it "giving birth".  That's what moms do.  They give us the greatest possible gift, the gift of birth.  Then they take care of us for the rest of our lives, no matter how old we (and she) get.

So, take some time this Sunday to let your mom know how much you appreciate all that she's done for you.  For some of us, someone other than our biological mother has filled in.  Be sure to thank those people too.  And if you're someone's mom, all of us at Tacony Corporation wish you the best, happiest Mothers' Day ever.

We're All on the Same Team!

Doug Fleener, he of the Retail Contrarian blog and The Daily Retail Experience newsletter has been attending a conference in Phoenix.  The purpose of the conference was for retailers and vendors to get together and talk to each other, something that we probably don't do often enough.

Doug writes: 

"* Communication, communication, communication.  Over and over I heard vendors tell retailers that they want to work with them.  Vendors know they can only succeed if their retailers succeed.  So why is it that sometimes we act like we're not on the same team? We retailers need to partner with vendors on ordering, sell through, and events.  I think there are times we retailers don't ask enough of our vendors.  And I'm not talking about discounts, dating, or free shipping, I'm talking about asking them for honest opinions and feedback on what we're doing well and not doing well."

I consider myself the retailer's advocate, but I do work for a vendor and I can assure you that Tacony Corporation along with the huge majority of vendors want to work with our retailers.  We're on the same team.

Some retailers (and, sadly some vendors) believe that there's a pile of money that represents the difference between the cost to manufacture an item and the price the consumer pays; and that the size of that pile of money is fixed.  They view the relationship between vendors and retailers as a tug-of-war.  We're all fighting for the same dollars.

Nothing could be further from the truth.  Vendors need retailers.  Retailers need vendors.  If we work together, we'll all make more money.  If there's an enemy, it's the competition.  Instead of fighting over our pile of money, we should all be trying to get some of their pile. 

Here's a good example.  At a meeting this morning, Ken Tacony read us a letter from a dealer.  Since I don't have permission to use his name, I'll just give you an outline of what he said.

Two years ago one of our sales professionals convinced him to take on our Simplicity line of vacuums.  In just two years, his business has tripled.  He's reinvested the profit from the Simplicity vacs in his business and has changed the course of his business and his life. 

Did we make money on the deal?  Of course we did.  Was it a win-win?  You'd better believe it.  Did this dealer make money buying our vacs?  No.  He made money selling our vacs--and we helped him with training, marketing materials, and other tools.  That's what a good vendor does.

As Doug points out, retailers often don't ask for help.  Or they view vendors offers of help with suspicion.  After many years of selling, I can back him up.  I can't tell you the amount of advertising and promotional funds I've seen go unused; the number of point-of-sale materials I've found collecting dust in back rooms; the non-functional displays I've repaired or replaced.

Right now you and your customers are being bombarded with negative news.  Gas prices are up.  Housing sales are down.  We're turning food into fuel and now there's not enough to eat.  The sky is falling!  Run for your life!

But, unless there's an oil deposit under your store, you're going to have to keep doing what you're doing, only better.  And the best place to find out how to do it better, and to get help doing it,  is from your vendor partners.

But it's not a one-way street.  Vendors need your help, too.  If you see a better way to do something, let us know.  If you see a way to make a product better, let us know.  (See No More Lost Straws!)  If a competitor is doing something better than we are, let us know.

If we all work together, we'll all come out ahead.

If you have something you'd like to share, comment below.

That Mall's History

Here's are two interesting web sites for you history buffs and curiosity seekers.  The first is called DeadMalls.com.  DeadMalls features the history of shopping malls that have seen better days.  Chances are that if you lived in a larger city, you have fond memories of the shopping center where you hung out as a kid.  But, changing times and trends have made it obsolete and it may be on its last legs, or gone entirely.

While you're at DeadMalls, be sure and check out their "Links" page.  They connect to come cool sites including one on grocery stores and several Howard Johnson's tribute sites.

The other site you might be interested in is similar.  It's called Labelscar.com, another shopping center history site.  (A labelscar is the still-visible outline of the letters when a name is removed from a building.  The site compares it to the white non-tanned skin that you see when you remove your watch.  Like DeadMalls, Labelscar has a state-by-state index and some interesting links.

Getting Away

This past weekend, I went on a retreat.  It ran from Friday evening until noon Sunday, just 40 hours.  But there was no computer, no internet, no television (we did cheat and watch a little of the Cardinals and the Cubs Friday night, but that was all, really) and no newspaper.  I highly recommend it.

We all need a little time to get away once-in-a-while.  And by get away, I mean physically get away.  If you're going to relax and recharge your batteries, you have to avoid distractions and that means going to a location where the very things that distract and cause stress aren't going to find you. 

For your own sanity, pick a place and a date and put them on your calendar, in ink, not in pencil!  If you can commit to a convention, a meeting, or a trade show, you can commit to something that's good for your health, both physical and mental.  Your personal retreat, whether it's an organized event like mine was, or just you and your spouse spending the weekend at a bed and breakfast, must be an appointment that you can't break.

Depending on your stress level, you should do this at least twice a year.  You're blood pressure will be lower.  Your stress level will be lower.  And your business will benefit.  As they say on the infomercials, "So you don't forget, do it today." Circle the dates on your calendar before you go home tonight.

Tacony Puts on a Show

Here at MYOB, we're always looking for good examples to pass along to our readers.  Here's one of the best I've seen in a while and I didn't even have to leave the building to see it first hand.

According to their web site, "The American Sewing Guild is a national non-profit organization dedicated to people who believe sewing is a rewarding and creative activity."  They recently held their regional meeting in St. Charles, MO, a community located just west of St. Louis. 

One of the events the ASG members enjoyed was a visit to the Corporate Headquarters of Tacony Corporation.  Our sewing divisions, particularly Baby Lock, really pulled out all the stops to make the visitors welcome.  As Julia writes on the "J.Sews" blog, we seem to have made a good impression.  She writes, "I was astonished at the resources the Tacony people put into the tour."

 

[Ken Tacony, CEO of Tacony Corporation, welcomes American Sewing Guild members to the Corporate Center (Click to enlarge)]

So why spend so much time and money to impress a handful of consumers?  For one thing, these are people who use our products.  The fact that they belong to a national sewing organization and spend their time and money to go to a regional sewing event is a strong indication that they don't mind spending money on their hobby which also happens to be our business.

But, more important, they're influential consumers.  Other sewers listen to what they have to say as evidenced by Julia's blog.  I promise you that when they got home they told their friends about Tacony Corporation and Baby Lock.

You may remember a while back we posted the story of Universal Studios and the way they promoted their new Harry Potter section to just seven people. (Tell Seven People)  Rather than promote the new experience with a high-dollar ad campaign, they contacted the seven people they thought were the most influential Harry Potter fans.  The low-cost campaign eventually resulted in 350 million impressions.

Here's the thing:  You have influential customers, people who are respected in the community, whether the community is defined by geography, profession, hobby, or any number of other things.  You should cultivate those customers who are members of YOUR community, the community who buys your product.  Make a good impression on them, you make a good impression on the community.

But (and this is critical) you can't fake it.  If you don't truly appreciate the people you're trying to influence, you'll be spotted as a phony so fast it will make your head spin.  At Tacony, we understand that people who sew are critical to our business, as are the people who buy our other products.  What's good for the industry is good for us.

If we had just put out a bunch of samples and handed out some free stuff, we wouldn't have fooled our ASG visitors.  I watched our people getting ready and you could see how excited they were to show our sewing friends all the things they could do with our products.  It was a labor of love.

How can you put this concept to use for you?  Use your imagination.  Have a cocktail party for your best customers to introduce them to new items.  Offer some exclusive information, maybe a class or seminar, just to your key customers.  There are a lot of things you can do.  While it's ok to have merchandise available for sale, this shouldn't be a selling event.  Your goal is to make an impression, not to make a sale.  Just be ready to take their money if they insist.

If you have any other ideas, please share them with us.

As Julia said at the conclusion of her post, "I hope the total good will and eventual sales turn out to make this effort worth their while — we sure appreciated all the work they did for us!"

Julia, we appreciate everything you and your sewing friends do for us!

How to Dial a Phone

This has nothing to do with business, but I had to pass it along.  We've come a long way in a short time.

On the other hand, those old Western Electric phones would have survived a nuclear blast and kept on working.  Maybe we haven't come so far after all.

A Different Kind of Computer Virus

It's a rare occasion when there are two posts to MYOB in a single day, but something just came across my desk that really can't wait until tomorrow.  It's an article from the BBC News web site with the unappetizing title "Keyboards 'dirtier than a toilet'.

According to the report, a recent study by a British consumer group called Which? found that four out of the thirty-three keyboards tables in its London office were a potential health risk.  One was home to more than five times the germs of the office's toilet seats.  A microbiologist ordered that keyboard quarantined until it could be cleaned.

The consumer group said one of the causes of dirty keyboards was people eating at their desks.  Crumbs get into the keyboard and encourage the growth of bacteria like E. coli and Staphylococcus aureus.

A similar study at the University of Arizona last year determined that the average office desktop could have as many as 400 times the bacteria of the average office toilet seat.

Sara Kidner of Which? advises that you give your keyboard a spring cleaning.  How?  Turn the thing upside down and shake out dust and crumbs.  At Tacony we reccommend you give it a good work over with a powerful vacuum cleaner.  (If you don't have a good vac, we know who makes the best ones.)  Then go over the keys with a good disinfectant, either the wipes that are specifically for keyboards, or a soft cloth soaked in a disinfectant.

Shared computers should be cleaned more often and it's not a bad idea to keep a bottle of waterless hand disinfectant on your desk.  Now, if you'll excuse me, I'm going to take my own advise and clean my keyboard and my laptop. 

Turnover

We're all looking for ways to cut expenses.  We've posted here before on some tips to trim everyday expenses, but the largest expense item for most retailers is inventory.  How do we reduce inventory expense without hurting sales?  As Bob Negin points out on his Whiz Bang Tips site, that's the $64,000 question. 

If you have too much inventory, you're wasting money.  If you have too little inventory, you're losing sales.  Hitting that happy inventory level that generates the most profits isn't easy.  One measuring stick is turnover.  If you bought enough inventory on January 1 to last all year, then your turnover would be one (1).  If you bought enough inventory at the beginning of each month to last thirty days, your turnover would be twelve (12).  For most businesses, the ideal figure is somewhere in between.

This chart from Bob's post gives a rough idea of average turnover rates for various types of stores.

 

But, turnover isn't the only metric for retail stores.  It's important, but it's not enough.  You have to look at other factors.

For example, take a look at the chart.  If a lumber yard can make 7.7 turns, how can an antique store survive on 1.7'?  There's another number to consider.  It's called gross margin.  Here's a very simple example. 

Let's say you carry two items, A and B.  You stock just one of each.  They both cost you $100.00.  You can turn item A ten times per year.  You can only turn item B five times per year.  But you sell item A for $125.00 making 20.0% gross margin..  You sell item B for $200, making 50 % gross margin.  Let's do the math:

	COST	MARGIN	TURNOVER/UNITS SOLD	PROFIT PER UNIT	TOTAL PROFIT
item A	$100.00	.20	10	$25.00	$250.00
Item B	$100.00	.50	5	$50.00	$250.00

If you look only at turnover, item A looks like the better one to carry.  If you look only at gross margin, item B is the winner.  But the reality is that they're both the same.

You have a lot of money invested in your business.  At the end of the day, you expect a return of that investment.  There are a number of other measurements that you can use to chart your business' performance, but turnover and gross margin, when used in combination, are a good place to start. 

30 Days Has September,

April, June, and November.  C'mon.  Admit it.  You still have to go through the rhyme in your head to remember how many days are in the month. 

Today is the last day of April, 2008.  In a few hours, the year will be 1/3 complete.  According to today's news, we're still not officially in a recession, much to the new media's dismay.  There was growth in the first quarter.  Not much growth, but growth never the less.  The official definition of a recession is two consecutive quarters of negative growth.  Darn the luck.  It's going to be at least sixty days before the pundits can proudly declare that they were right.  That is, if the economy actually does stop growing.

I thought about the economy as I was reading Doug Fleener's Retail Experience newsletter for Tuesday.  His topic was "blamers" and "learners".  To summarize Doug's comments, he compares two retailers who bought the same new product.  There wasn't enough support from the manufacturer to move the product off the shelf.  (That never happens, does it?)

Retailer number one, the blamer, ends up marking down the product and taking a loss to get rid of it.  Retailer number two, the learner, sees that the vendor support isn't going to make the product sell and experiments with various things until she finds the one that works.  Sales boom, including sales she gains from competitors who gave up on the product.

The point is, whether it's a soft economy, a lack of support from a vendor, a torn up highway in front of your store, hot weather, cold weather, $4.00 gas, or whatever, you have two choices.  You can play the blame game, while your sales go down the porcelain convenience, or you can accept the situation and do something about it.

The good news is that many of your competitors are taking door number one.  Like the winner of a NASCAR race, the time to pour on the speed is when the competition pauses.  While they're in the pits, you can keep flying around the track. Keep your foot on the gas and you'll take the checkered flag.  (Thanks, Mr. Cliche)

Dear First Name,

I actually received an email today that began "Dear First Name,".  Obviously it was a direct email piece that wasn't set up correctly.  Considering the source of the email, I know that the mailing went to hundreds, maybe thousands, of people.  I'm not upset.  In fact, I think it's kind of funny.  I never suspected that someone at the company sat down and wrote a personal email message just to me.  On the other hand, the larger the mailing list, the more people see your error.  The glaring mistake really weakens the message of the email, especially when it's the very first thing you see when you open the message, and may even damage the reputation of your company.  Computer software can save a lot of time and money, but you have to be careful not to make mistakes.

Your mailing list may be quite a bit smaller than the list that my "Dear First Name" "friend" uses.  Your customers may actually think they're getting an email or letter written just for them.  That's a harmless illusion that you probably want to keep going.  If so, check and double check your work before you hit the "send" button.  In fact, before you so a mass emailing, your best bet is to send just one message....to yourself.

When you receive it, go over it with a fine-toothed comb.  Is everything right?  Is it addressed "Dear You" and not "Dear First Name"?  If the customer's name is repeated in the body of the letter, is it correct?  If everything is the way you want it to be, then and only then go back and hit the button sending your message to your entire mailing list.