Humble Dogs

That they might see with their eyes, hear with their ears, understand with their hearts. Matthew 13:15b

Archive for the tag “retail”

Overstocked Sale

We are Overstocked

We are Overstocked

One ad that keeps popping up on radio and tv is the
“We Are Overstocked Sale”

I have been in business many years and one the single most important factors in management is inventory. Stock costs money. Overstock is working capital tied up in storage. When most businesses are operating on limited budgets, inventory excess means someone is not getting paid or a bank note is needed to meet expenses. Either way, overstock is a drain on profit.

Inventory is probably the easiest part of business to control. It is a tangible ingredient. Not like the effects of economic downturn, or customer growth and loyalty which are intangibles, ingredients one has to work with and around. Or bank rates, which generally are out of business control, or repairs and maintenance which can bring sudden surprises. Employee relations are another of the intangibles, more than simple counting and ordering.

Yes, there is need for sales projections, but if you are on top of your game and watching the pulse of the industry you are in and look back on past performance, what inventory is required to cover sales should not be such a burden on the company budget.

My point is this; Why would I trust buying from a company which advertises their poor management? Especially when it is the same companies, most often furniture and appliances, telling the same “Overstocked” story over and over again. They are either extremely poorly managed or outright lying to customers and just using overstocked as a sale strategy. Either way, I don’t want to do business with them. They think people are stupid. The ads are directed at the gullible.

If poorly managed, then the services they offer will be poorly managed. If they are lying about being overstocked, then they most likely will lie about their product and service.

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Dollar Cycle

There is an old saying, Money is made round to go round. That is no longer the adage. A dollar spent at a locally owned and operated business using local services and selling local products where possible, will cycle in the community approximately seven times, buying more locally produced products and services, paying local wages, paying local taxes, paying for community services. Everyone in the community benefits and more community services can operate effectively and efficiently within budget. There is less unemployment and better paid employment.

Alas, in reality, people tend to spend their dollars at national or even international outlets where, the prices are less but, where the over half the dollar is skimmed off the top leaving the dollar to cycle only, on average, 3 times in the community. Generally the wages are lower, meaning less taxes are paid. The goods and services they offer are mostly imported, jobs and profits leave the country. The footage per retail is condensed leaving less local taxes collected by the community. Whenever a retail giant moves in to a community they will brag about how many people they will employ. In reality, the overall employment level drops as they force local merchants out of business. Local taxes have to increase to compensate for the losses.

Multinational and international retail giants are a lose, lose, lose reality. A loss for the community, a loss for the country and a loss for the tax payer.

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