September is usually the 6th biggest month of the year for UK pro shops in terms of retail sales. With the major tournaments well behind us, an absence of exciting product launches, and less daylight for players to enjoy the game, perhaps it isn’t always the ‘boom’ month you’d expect. But there’s still plenty to do and, while retailers are hoping for more good weather to help extend the season, September is also when we should be thinking about what to BUY for next year. In September Pro Shop, the retail experts from Crossover Technologies have 3 top retail buying tips for a profitable year ahead.
1. Set Your Budget
Unfortunately, around 80% of pro shops don’t create an annual sales budget and, if this is your shop, be aware your bottom line could be affected. Having a budget is an essential part of any business but, unfortunately, many retailers don’t appreciate the importance. It’s not as tricky as you might think and is really just about looking at what’s coming in, in terms of sales (income), and knowing what you have going out (costs/expenses). If you can put a bit of time aside to look at your numbers, we guarantee you’ll save money next year.
Head PGA Pro Dean Vannet from Banchory Golf Club says, “Years ago, I’d say I wasn’t particularly great at running a shop, or budgeting. We used to buy in what we thought we’d need, and take a punt that it would sell. But with new technology now, there’s great information at our finger tips and we have the chance to run great businesses”.
Be a Goal Setter
Before you think about your budget, write down your goals. Ultimately, these should be driven by what you want in life, and the idea is that you work backwards: setting smaller goals to help you get there. Your long-term goals should be the motivators to do the ‘boring’ stuff, like setting a budget.
Retail expert Mark Hopkins says, “It’s a myth that putting a budget together is stressful. In fact, it’s meant to help you to manage your business, and take some of the stress away”.
“Take the leap. You may not want to stay the same, but if you don’t change, you won’t grow,” continues Mark, “Keep it simple at first. Just look at what you do every month, how much you make, and aim to make 5% more than the previous month”.
Start Here: Your Free Budget Planning Tool
Our retail experts have created a live template to help you make your budget. Hundreds of retailers have downloaded this easy to use budget planner. Just key in some basic information about your business, and the rest will be done for you.
2. Fact-Based Decisions
Now you’ve created your budget, here’s how to achieve it.
Retail buying is one of the most important responsibilities you have as a pro shop owner manager, and misjudging quantities, or buying in the wrong brands, could hit you hard. Never make a buying decision based solely on gut feel and use the data from your XPOS system to help you decide.
If you can put a bit of time aside to look at your numbers, we guarantee you’ll save money next year.
The team at Edgbaston Golf Club has doubled profits in the pro shop, year on year, for the last 3 years. PGA Pro and Retail Manager, Joshua Harvey, explains what he does once the budget has been set for the following year, “When we have our targets and budgets agreed, I’ll do some analysis looking at the last 12 months. I’ll review the best performing categories within the top-selling brands in the shop. And from that, I’ll identify the products with the highest margin. The main things to look for are specific sizes, garments or items that have worked previously, and make your buying decisions based on that”.
"Don’t ignore the warning signs. If your reports are indicating you have too much stock, or that you’re discounting too much, be brave".
There are specific reports within XPOS you can run which highlight everything Joshua mentions. “I go to the Sales Analysis by Supplier report; break it down by Subgroup; and, within that, I look at profit and margin for the previous year”, he says.
Don’t ignore the warning signs. If your reports are indicating you have too much stock, or that you’re discounting too much, be brave. Focus on the brands and products that are working for you.
3. Meet with Suppliers
Finally, it’s a great idea to meet with all the brands each year, regardless of whether you stock them already. Firstly, you should be looking to see if they can add anything new. “Every 2 years, we might phase out a brand and introduce a new one. It’s important to keep the look of the shop fresh, and use the launch of a new brand to generate some excitement”, says Edgbaston’s Retail Manager, Joshua.
Make sure you take the numbers with you when you meet with the brands, to give you some leverage when negotiating new orders. Honesty should be your best policy: if you’re doing pretty well with Supplier A, but better with Supplier B, maybe A can do something to improve things.
Signing up to Golf Datatech’s monthly reports will keep you up to date with how the brands are performing nationwide, which will help when it comes to deciding which brands to work with. If you can see that the average margin for a particular product is 35% nationwide, but you’re only making 28% margin, you’re in a better position to ask a supplier to help.
"If you can see that the average margin for a particular product is 35% nationwide, but you’re only making 28% margin, you’re in a better position to ask a supplier to help".
Finally, look at lowering the risk if possible. Should you look at sale or return, or will a supplier agree to drops, rather than having everything in one lump. Can you pull out of the drops? Erring on the side of caution where you can, and planning ahead for all eventualities, will pay off next year.
Great buying requires a lot of commercial empathy and an appreciation of what your customers will want. Just remember, it’s better to have to order more during the season when you know your customers need it, rather than at the start of the year, when you’re hoping they want it.
For help with setting business goals, budgeting, and understand reporting, book a Business Health Review with a retail expert from Crossover Technolgies. 01454 418 395
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To keep track of how the brands are performing across categories nationwide, sign up to monthly Golf Datatech reports by following this link.