Hey there!
I hope I didn’t throw you off but seriously… what is your meatball? :)
There is a saying out there (i.e. Pareto Principle) that states that 80% of your business comes from 20% of your inventory. Here at Retail Recipes, we have a similar principle that I like to call my “Meatball Theory.” This theory can be broken down into 60/20/20 principle and here’s how.
Every business needs a meatball, a “no-brainer” part of the business that generates consistent and reliable sales. This type of inventory are products that have proven selling and without much effort, accounting for about 60% of your business. The next 40% of your inventory can be divided into two categories: opportunity products (i.e. merchandise that has the opportunity to become these “no-brainers”) account for 20% and the remaining 20% become your test products (i.e. icing on the cake).
While it’s great to have some reliable merchandise, I am constantly looking for opportunity vendors. I also search for items that may not sell as well as my “no-brainers” but can excite my customers and peak their curiosity. A balance of these three categories will keep the customers coming back. While there are certain pieces that you know will consistently sell, you never know what the next “hot” item will be. As you introduce new items and get selling feedback, you will start to become more confident with what your customers are looking for and start to rock and roll with your business.
So here is your assignment for this week.
Take a look at your own collection and figure out which items fit into which category. It will help you organize your collection and create a merchandise assortment that will be pleasing to the retail buyer and ultimately the customer. If you are hitting a wall and need some help with your merchandise strategy, click here to schedule a private one-on-one session.
xoxo,
Grace Kang
Your Retail Product Mentor
