WELCOME TO SEASON 6 OF BUSINESS OF CRAFT
Welcome to Business of Craft, a show designed to help entrepreneurs with fabric or fiber businesses become more successful. Our guests share best practices and teach effective marketing skills, that help crafty business owners learn to grow and scale. Let’s start crafting a better business together!
Today, our guest is Cathy McKillip, CEO and president of Retail Profit Makers, a consulting business designed to help independent retail companies maximize profits through better inventory management. Cathy has over 30 years of business and retail experience and sold her retail business after growing sales to a tenfold multiple in 10 years.
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[01:44] Let’s could start with your origin story because you left the corporate world to start a quilting company and then quickly realized it’s more complicated than it seems at face value.
[7:35] When we were talking about cash flow mistakes you were illustrating an example of how there can be a discrepancy between what your accountant tells you and what your bank account tells you. I wonder if it would be illustrative to review that again?
[10:05] What are your most recommended tools?
[13:15] One of the other concepts that I learned from you is is open to buy. Could you elaborate as to why it’s so important to understand that for your inventory management?
[16:35] Another concept that I wanted you to elaborate more on, which is just turn and you say, say increase turns, increase your cash flow. Can you teach us more about that?
[22:32] Let’s talk just a little bit more about discounting.
[24:59] Overbuying is a very common mistake. And I know there’s a lot of other pitfalls you mentioned, underbuying, buying just in case, buying at the incorrect price point. Can we elaborate on some of those? Which one is the one that you see the most often as well?
[29:09] What other advice do you give your clients on how to keep their pulse on what the customers want?
[31:35] Let’s talk a little bit about the difference between going deep in a line and then offering variety to customers.
[38:38] What about merchandising? How do retailers get better at how they’re displaying products and the whole merchandising part of their business?
[41:23] I know there’s a whole rep network where the reps will come into your shop. Some people like to just do a catalog online. Do you have any opinions on one that’s better than the other?
[44:35] What do you say might be an expectation for a timeline when it comes to turning around your ship? How long before you can kind of turn around and underperforming retail business?
Figuring out your open to buy strategy isn’t a one-and-done plan. It’s constantly evolving with your store and trends and your customer base. You can’t be complacent.
Cathy brings up showrooming which is so important! If you have customers tell you they want something but they buy it cheaper online, they weren’t actually buying from you they were using you as a showroom.
You have to make sure you’re buying for your customer and not yourself. Do you know who your customer is? What do they want? What are they actually going to buy? It’s not going to necessarily line up with what a rep wants to sell you.
Inventory is your cash flow sitting on the shelves. Your accountant might say you’ve made money but the reality is that you may have lost money when you take into account you spent money on inventory that isn’t sold yet
Turns are the name of the game– faster turns increase cash flow
You can’t do it all- use your time to be creative in the business and outsource the rest.
Understanding what your customer wants will help you be profitable. Sounds simple and really obvious, but not everyone knows who their customer is and what they want.