TDmonthly Magazine!
March 2011 | Vol. X - No. 3


Avoid Redundancy in Your Toy Store

What's Good for Rolls Royce Can Drive Your Business Down

The following article was reprinted with permission from the author.

Here’s a question for you: Do you know what makes a Rolls Royce a Rolls Royce?

Yes they are a totally custom built car. And yes, very expensive. But what makes each car so costly are the redundant systems.

For example, there’s not one set of brakes but three.  For a Rolls Royce those backup systems make an incredibly safe ride. That’s why they get a premium price.

For a retailer, redundancy is costly – that’s your money sitting there!

How many redundant products do you have on your shelf?

Why'd You Buy Them?
When I do business makeovers (see Bob's makeover of a toy store on Facebook), owners are often shocked when I point out multiple products in a slow category.  They gasp, “How did so many of THOSE get there?”

Like some evil gremlin came in and stocked their shelves with excess product.

For example, a toy store that has six different child’s play tea sets.  How many do you really need?

Is there a new trend you’re riding and you continually sell out? Did Oprah mention them on her show? Then maybe. Maybe its OK. 

But usually, it’s just sloppy buying habits. Not gremlins.

The danger with multiple products is that they are not “different enough” so you’ll overwhelm your Feeler customers. They’ll shut down.

Because they can’t see any real differences they’ll either decide by price – what’s on sale or the cheapest – or leave. Neither of which builds your personal fortunes.

Four Tips to Avoid Overbuying:

   1. Keep your best-sellers in stock by monitoring your POS category reports.  Check sales within each category every week, and balance to outstanding orders.
   2. Cut those that continue in the bottom 20%- even if you really “love it.”
   3. Before buying anything, make sure you know what it will replace. Impulse is for customers, not store buyers.
   4. Come up with an optimal level of merchandise based on your POS reports, your merchandise turn and profitability; then create your open to buy and buy to fill.  If for example you found you had 48 child’s tea sets in stock (8 of six styles) but you only sold 1 a month, that would take nearly four years to get your money back. Notice if you just replaced the one style that is selling, you’ll continue to dig yourself in the hole.

You can be the premium retailer in your area if you avoid being redundant.

Bob PhibbsWriter's Bio: Bob Phibbs is the Retail Doctor®, a best-selling author and speaker who has helped thousands of independent businesses compete. His new book, The Retail Doctor’s Guide to Growing Your Business has received praise from both Inc. magazine and USA Today and can be found at your local bookstore or ordered at He and his work have been featured in the New York Times, the Wall Street Journal and Entrepreneur magazine. Questions? Contact Bob at This article was reprinted with permission of the author, Bob Phibbs, aka The Retail Doctor®. Read more articles by this author


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