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| Subject: Smooth Beginnings Are Possible After Eliminating Some Rough Issues | |
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Author: Dennis S. Vogel |
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Date Posted: 23:04:44 07/16/16 Sat In reply to: Fanci 's message, "I'm getting ready to open a store" on 11:27:36 10/10/01 Wed Smooth Beginnings Are Possible After Eliminating Some Rough Issues This part presents some issues for retailers in general also. What kind of insurance coverage will you have for the inventory? How will the actions (or lack) of building owners affect your liability & business property coverages? Which actions (or neglected problems) of building owners should you report to the insurance company covering your business? How would product owners be reimbursed if you aren't healthy enough to run your business? It may seem strange for a marketing consultant to ask these questions. I'm not asking you to answer for me, you should answer many of these questions for yourself. You should be ready to deal with as many of these issues (below) as are applicable to your store. What About ... ... Choosing Inventory & Selling Enough To Cover Expenses? Will all of your inventory be owned by others or will you buy some inventory? Will you check furniture in people's homes (so they don't have to haul something you don't accept)? Or will you only check furniture at your store? Considering space & money, how much inventory can you afford to have? Will you offer only firm prices, 'or-best-offer' or both - depending on particular products? How will you determine if it's time to break-even on a product or possibly accept less than a consignee expects you to pay him/her? If you have enough inventory (but not enough space & money), but get an offer for some great inventory, how will you determine what to do? Could you afford to get a loan? Would you use barter? Depending on your cash flow & financial needs, how much sales revenue will/do you need per square foot? Some fixed costs might be almost the same in either building you're considering for your store. Depending on the building condition, heating & maintenance of a bigger space will probably cost more. How likely are you to get enough sales revenue per square foot (or whatever your main metric is/will be)? If you need more inventory despite your 'wanted-to-buy' ads, will you go to rummage/yard/garage sales? If you do it, will you have to adjust your personal & professional schedules? Will you have a staff &/or partner to share your work load? ... Old, Unsold Inventory? If a consignee brings in a furniture set, will you ask if the set (not individual pieces) will be sold together only? Who will have final discretion over how & when to sell products? Will you have a time limit on how long you'll keep a piece of furniture before you call the owner to pick it up? Example - After displaying a product for 3 months, you might want to use the space for things people might be more apt to buy. Where would you put the furniture, if nobody picks it up in cases like these? Without being overbearing, you'll need a strong, clearly worded contract to detail what you're entitled to do in cases like these. Will you charge for storage of unclaimed, unsold inventory? Would you haul unsold inventory back to the owners? If consignees move & list a faraway address (for payments you send), how would you deal with what remains unsold? What will you do if mail is returned as undeliverable (especially if it contains checks you've sent to pay consignees)? How will you document your communication (& attempts)? How extensive do you need your consignment agreements to be? What kind of restrictions are you willing to put on yourself? Depending on what you require of yourself, people might be more comfortable with you. How many terms & conditions will people tolerate? (Have you ever read the many pages of terms & conditions for software?) If people feel forced to agree to the terms & conditions, they might be resentful. Always Some Legal Considerations Will you limit the item values to avoid expensive litigation & so any legal hassles would be handled by arbitration or small claims court? After people dispose of items, especially when they try consignment, they might resent a requirement to take items back. It might depend which they want more - money from selling items or to be rid of items. Who will be authorized to reclaim products or receive payments? Example - If I'd consign things from my parents' estate, my siblings could want an unsold item or the money. If they're frustrated with me & I may tell them to handle the estate. They could try to claim whatever they can. You should consider what to require of people to receive the items or money. Would you expect the original consignment agreement or receipt? What would you require for identification? Will you charge for delivery to buyers? People might pay (full or down payment) for furniture & choose to pick up it later. How long will you hold sold products for them? What if they don't claim it in that time? Where/how will you keep that money - as cash or deposited in a financial institution? Dennis S. Vogel When your marketing is optimal, your business should thrive, no matter who your competitors are. [ Next Thread | Previous Thread | Next Message | Previous Message ] |
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