Prepare thyself

It's that time of year again when we all start getting very excited about attending summer shows. Anticipation, as always, is running high at the chance to see all the new creative products the vendors have found and to get ready for the fall season.

Having just returned from a trip to China, and visiting many factories, it is apparent the vendors in the industry are working harder than they ever have, with great success, to produce outstanding new product.

That said, there are things happening in China which will result in some of the biggest price increases this industry has ever seen. It will be beneficial to you to think about this and prepare your buying strategies accordingly before markets.

First, let's talk about the root causes of this.

Raw material prices are through the roof. Polyresin is a petroleum based product. Metals are in very high demand. Even food, in this case rice, has almost doubled in price in the last year. Many of the workers in the factories that serve this industry eat all three meals per day in the cafeterias of the dormitories they live in. Labor shortages are contributing to an increase in wages as well.

Put simply, base costs for factories in China have risen dramatically, and they have no choice but to pass it along to U.S. vendors.

The vendors in this industry are an amazing group of people. They are creative, the vast majority of them are very good businesspeople, and I can assure you they are smart enough to know they will have to absorb as many of these costs as they can. However, there is absolutely no way they will be able to absorb all of them, and you can expect product to cost more for the foreseeable future.

So, if this is the reality of the marketplace, how do you prepare for markets?

First, study your store's results by category better than you ever have. What's selling? What's not? Where do you expand categories that are working for you? Where do you maintain inventory? Where do you cut and run?

Next, take detailed inventories before you come to market. I have always been shocked at how few retailers know exactly where they stand when they arrive at market.

Regardless of the prices you see, you must buy new product to keep your stores fresh. The lifeblood of this business, at every level, is new, new, new. If the consumers who come into your store get bored, they won't be back.

Lastly, don't be jaded by “show specials.” When you make a purchasing decision, the only thing you should be thinking about is how sure you are that the product will turn. It doesn't matter how much dating you get or who gives you free freight if the merchandise you bought because of the “special deal” never moves off your counter.

What about when you get home? We are fortunate in that a number of very successful retailers are now on the speaking circuit, writing great articles in magazines and even publishing books. It is no accident most of these retailers credit much of their success to being very aggressive about events, local charity promotions and other things that tie the community in to their stores.

History will show this will be the most important time ever in our industry to be very aggressive in this area. Retailers who are still thriving two to three years from now will be the ones who successfully executed these ideas.

If you are a vendor, you need to be prepared as well. Your customers will be concerned about pricing; some may even be a bit angry. Are you ready with solid explanations that make sense and don't come across as spin?

At the end of the day, trust your customers. They are smart too. They are good business people also. They will make the right decisions as long as you fulfill your role.

Offer them great product, at the very best prices you possibly can, give them great service and they will stick with you just like they always have in uncertain times.

Like all of you, I'm looking forward to seeing old friends at market, new products and new ideas. Someone once said that a huge part of success was just showing up. I mention this because I've heard some people say they should maybe just skip these shows. Bad idea! You will surely be left behind if you don't stay on top of what's happening.

Let's all dedicate ourselves to showing up at markets this summer with a “glass half full” attitude. See you soon!