As a retail store owner, it is important to remain lean and nimble. One of the ways you can accomplish this is by taking as little inventory risks as possible.
Many wholesalers have onerous minimum order requirements such as $1,000 minimum order values. If you try and go factory direct by yourself, the MOQs can even be higher, ranging from $10,000 to even as high as $100,000.
With today’s fast moving social media driven world, it is important that you can quickly respond to trends — but that you're also not stuck with inventory when a trend goes out of style. Furthermore, it is important that you also test a wide variety of different products, because you never know what will resonate in your store.
Our philosophy is that you should be testing new ideas and products all of the time. The problem is that with high minimum order requirements it makes it very hard to execute on this strategy. You can’t really truly take on a testing mentality when you are burdened with inventory risks.
This is why we require every factory that sells on Supplied to get rid of their minimum order requirement — no minimum order quantities or values. We believe that minimum order requirements are simply an unnecessary rule that inhibits free trade. By not having an MOQ, it allows you to order just one piece to test your customers reaction in your store before investing in a bulk order — or you could order one of each color or style to further gauge which styles or colors will sell best in your store.
The beauty of this strategy is that it allows you to test crazy ideas in your store for sometimes as little as a few dollars. The other thing that testing crazy ideas does is allows you to diversify your store with new products — which is a proven strategy to getting customers to come back to your store and stay in your store longer.
We recommend that when you are doing any test, that you clearly document what you are testing and then predict the result in easily realized way. For example: "I’m testing whether jewelry under $5 will sell in my store." "I’m testing whether if I sell yoga accessories with yoga clothes if I can get my average ticket size up 20 percent.” We'll write a blog soon about how to test in more detail — but the point is your test should be frequent and deliberate.
The other great thing about Supplied is that on average our customers receive their inventory in 12 days. This means that if a product is successful that you can quickly reorder the product and never miss an opportunity.
So here are our suggestions for how to order with Supplied:
- Place one order per week. You get free shipping over $99, so it’s smarter — and just as affordable — to break up inventory purchasing into smaller groups instead of one big purchase a month or quarter.
- Commit to spending at least 25 percent of your purchase on crazy test. Just order 1 to 3 units each per product you are testing to have a constant flow of new ideas that could become core products
- The other 75 percent of your order should be dedicated to tried and tested products that you know are going to sell in your store. However, never buy more than two weeks' worth of inventory because you will be placing small orders once per week. And because our pricing is all factory direct pricing, you don’t need to order in any sort of massive bulk to get discounts. The price is already as cheap as it can be!
This will set you up for success: you're never out of stock, but you're also making testing investments so that you can learn from your customer — and will always be finding your next big product.