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The choice is clear: make profit or push water uphill PDF Print E-mail
Written by Albert Marrache   

ImageEvery independent furniture and mattress retailer in North America has the same problem. Each is asking himself "How do I increase profits without adding more cost?" This has become a much bigger issue over the past 18 months simply because there are fewer and fewer people walking into furniture stores.

Historically, there have been four ways for the average independent retailer to boost profitability: buy better; exercise better control over overhead; get more new customers; and, capitalize on existing customers.

In my experience, most independent retailers are focusing on the first three of the four usual ways. Unfortunately, these three areas are where the owner/operator has the least control.

Cost cutting and overhead reductions can impact profits, but there's a limit to what can be done - a retailer can't reduce property taxes or utilities bills. Staff can be cut, but how long before that means the store can't sell or service the customer properly?

Business owners have no control of the economy. In a tough economy finding new customers and getting them into your store is a little like pushing water uphill.

To make more profit, a retailer needs to sell more - which is something better buying, more cost controls and a poor economy won't produce. Since there are fewer consumers in the market, the focus needs to be on the customer in the store right now. This person is saying she's ready to buy and the economy isn't necessarily a pressing issue for her and her family.

Statistically, an average independent store is going to close three out of every ten walk-ins. (As an aside, do you know how many potential customers walk through your doors every day? If not, start finding out for only that which can be measured can be improved.)

What would a furniture retailer's top line sales and bottom line profits look like if the sales staff were to close four in ten? What would they be if just one item was added to every invoice written?

To accomplish this, there are just three things to do: determine what more to sell to a customer; have the products on hand; and, train the sales staff to be capable of selling more.

These three things are absolutely wherein the store owner's control, even though most believe the opposite to be true.

The control is gained by coaching the sales staff and then monitoring their performance - if the store owner doesn't control the sales staff, he or she will lose control of his business because the sales staff has taken control of the process.

When the owner isn't in control of the sales process, he starts managing the store around the sales staff and creates ‘work-arounds' to make up for missing profit dollars.

Store owners need to train and control their sales staff. Show them the desired customer experience and set the standards for every customer encounter  - have them do role-playing and other techniques to sharpen their sales skills and them create an incentive plan for those who consistently up-sell.

If the sales person isn't presenting an add-on with every sales - whether its stain protection, mattress pad, lamps, accessories or tables - he or she is leaving profit dollars on the table - in essence, pushing water up hill.

Once the training plan is devised and implemented, monitor and track results every day. Review each day's invoices without fail and be ambitious.

Profits forgive all mistakes and the best way to increase profits is to increase sales.

Albert Marrache is president and co-founder of Phoenix AMD International - a Canadian value-added product and service supplier based in Bowmanville, Ontario. He can be reached via e-mail at .

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