Cut Back on Stocking Unprofitable Products

With the tough economy, it's especially important that you don't waste money. Among other things, this means cutting back on stocking merchandise which fails to earn you an adequate profit.
     I'm not saying to eliminate this merchandise altogether. You might be carrying items with very low turnover—and therefore very low payback by themselves—because stocking these items lets customers know you carry a complete set. The buy-it-once-in-a-lifetime fasteners are on the shelf because your store is known for carrying whatever-you-need-in-your-lifetime fasteners. But don't carry more than a couple of each of those slow sellers.
     Cut back duplicate lines. Can you reduce your Good-Better-Best assortment choices to Better-Best choices? Do you need to have five different bedroom ensembles on display when you could have three on the floor and offer to special order others?
     Avoid carrying products that fit into limited categories for the customer. Retailers who stocked products labeled Jell-O® Gelatin Flavors for Salads learned that buyers used the products just for salads. In tight economic times for the retailer, it works better to carry boxes labeled Jell-O® with serving suggestions that include salads, among others. Over the years, the Church & Dwight Company has done a masterful job of positioning Arm & Hammer® Baking Soda in a considerable variety of categories for the consumer, from odor control to cleanser to, well, baking soda.
     In some situations, cutting back on unprofitable products results in you having empty shelves or unfilled racks. In usual times, that could project the wrong image, as customers start gazing around, trying to find the "Going Out of Business" signs. But these are not usual times. Whether you've a few empty spots or not, keeping things trim lets customers know you recognize they are wanting to trim needless expenses in their own lives.