I owned my own bridal store from 2009, in memory of the love of my precious mam and dad (opening the doors during the worst global recession since World War 2!) and 10 years later I sold my store, whereby its profit was at an all-time high and gross revenue at an all-time low. To understand your gross revenue is to understand the roots of your business.

This month, we’re looking at managing your inventory in uncertain times, and the strategies you can implement to avoid overstocking/understocking (which leads into understanding and managing your costs).

There is a lot to unpack here, as we feel, how can we keep a lid on our cashflow when we are being pulled from all directions plus having the ambition to grow our businesses?

Overstocked stores usually a) don’t have a good retailer / designer alignment, b) sometimes hide from difficult conversations on minimums, and c) in 2024 especially, I’ve noticed stores feeling a state of ‘desperation’, buying inventory from numerous designers and simply hoping it sells, rather than understanding having a successful business means you need to recognise your consumer fully and know what is good for your brand, stylists and business. Stop overstocking, and always try to be intentional about all business decisions, especially buying. Be conscious of circumstances - a conscious mindset helps us see opportunity to scale up rather than be in ‘desperate mode’, which ultimately lends itself to grabbing what we feel we may need and spending money in the wrong places, leaving us overwhelmed and overstocked with expensive bills.  An awful place to be!

On the flip side, understocked stores have less than the desired amount of product needed. This is just as precarious as overstocking! The business owner/buyer usually comes from a place of fear (which is understandable in this market), and thinks they cannot buy products, so their consumer will have to do with what is already in store. This means you will have an inadequate supply of desirable products, leading to missed sales. Instead of saying ‘no’, think consciously, look strategically into your business historical data and predicted future trends to help you forecast demand. You cannot save your way to profitability!

How to buy well:

•    Double up on sizing and colours which you know work for you
•    Wild card dress – it is okay to buy a wildcard to attract consumers through the door
•    Have a conscious state, and be intentional always and forever when buying dresses
•    Make sure the right people buy your inventory when at market!

A quick guide to product & pricing:

Product – Right now, your inventory is key to your success. You need around three core labels on your floor, with a dusting of collectable/capsule dresses. You need to sell to your niche market, your specialised segment of the market, whether it be product or service. Knowing who you are selling to and what they are buying from you is crucial! A hack of mine is to get rid of dresses hanging on your rail (a dear friend of mine says ’dresses need to pay rent to be there’!) so consider if a dress has not been tried on, enquired about or reordered, push it off the rail to sell on as stock or ‘ready to wear and love’! Remember to embrace your products, freshen them up, make them look desirable on the rail, label attractively, and ensure you and your team understand what each dress is doing for you. 
Pricing – This generation want value for money. I talk endlessly about the generation we mainly sell to. I have been saying for a few years to reduce stock and lower prices to ensure profitability. In most cases, brides are wanting value for money (which isn’t necessarily a bargain) but VALUE. Be tactical in writing down a) how you deliver value, b) what value looks like in your store, and c) what costs are representative of value to your consumer. Value doesn’t mean cheap. Value is a desirable outcome which creates profit! We are simply adapting to what works, because businesses are like people - they change and evolve constantly.

Turnover vs. profit: an understanding

As mentioned earlier, to understand your turnover or gross revenue, you need to be aware of costs vs. profit. Turnover is your total business income over a set period, so everything coming in and going out. Profit, on the other hand, refers to your earnings left over after expenses are deducted. I live with the saying: turnover is vanity, profit is sanity, but cash is king for your business - now and moving forward.

How can you improve your profit? 

• Lower direct costs by renegotiating all business agreements
• Manage cashflow consciously (take time out to re-evaluate)
• Reduce overstocking
• Expand socials and consumers
• Dress sample rooms and evolved sale spaces are great right now as a ‘cash cow’ (I love seeing this)
• Improve closing rates (it’s always about the people, so train and coach well - check back here for next month’s piece on your team! Product knowledge means having a team who understand the dresses and the business fully)
• Scalability – understanding the market dynamics and trends, learning to forecast