Shoes – A Risky Business?
You may recall back in February, the Shoe Superstore went into administration and five months prior, the same thing happened to Payless Shoes. Despite these two events, at around the same period, The Athlete’s Foot recorded total group sales of $92.4m. Is it just that The Athlete’s Foot had their finger on the pulse of their consumers enabling such great profits while the others just somehow missed the boat? Whatever the answer, it may be safe to assume that you probably don’t want to be investing in the shoe industry right now.
For those of you in the retail or wholesale business, you may already appreciate that even though you personally like what you have chosen, it doesn’t necessarily guarantee a sale. You need to understand the marketability of the products and in order to do this you need to know your customer base. If your range of products will only appeal to a small margin of the population, then you either need to reconsider your stock or have a super marketing campaign to back them up.
Your profit margin is another thing to take into consideration. You want to ensure that your margin from the sale of your goods is large enough to take into account your expenses such as rent, wages and utilities just to name a few.
Competition of course is another factor you need to take into account. A little competition is healthy so choose your products wisely. The more unique your product, the less competition but again you need to take your target market into account when choosing your stock.
Spreading yourself too thinly product wise can confuse your customers and it may be difficult to create a compelling market campaign to ensure quality sales.
Some of these questions may also help you determine your choice of stock. Is there a need for it in the market? Would you buy it yourself? Would you sell it to someone you know? Is it unique? What is the quality like? Can I purchase it locally elsewhere?
There is never a guarantee that your product will sell, regardless of how much research and planning went into your stock purchase; the Shoe Superstore and Payless Shoes can definitely vouch for that. But understanding your customers and their needs, balanced with the costs and your competition, should ensure you are at least heading in the right direction.