We help manage dozens of golf shops across the world. Sometimes we're the owners of the shop. Sometimes we are the managers of the shop. Sometimes we are consultants, brought in to help find efficiency.
In our decades of experience working in the retail space, we've learned a few things. Most importantly, having a high-performing golf shop is about managing the inventory as much, or more, than it is about choosing and stocking inventory that consumers want.
Here are six tips to help you manage the business-side of your shop.
Utilize an Open to Buy Plan
You would be wise to start your season with an Open-to-Buy-Plan (OTB). An OTB is a way to estimate how much inventory you will need to buy throughout the season. Let's use an example:
- In the previous year, the club sold $100,000 of inventory
- There is $10,000 of stock on hand
- All things being equal, the OTB should be around $90,000 for the upcoming season.
An OTB plan will ensure you don't over-purchase inventory. It will provide you with a baseline to guide your early-season purchasing. The OTB can be as detailed as you'd like - even getting down to the granularity of categories, styles, and sizes.
Conduct Monthly Inventories
Taking a monthly inventory is the most basic and essential step towards managing your shop. Without an accurate monthly inventory, you can't:
- Understand your COGs
- Quantify your Gross Margin
- Identify potential theft or loss
- Restock inventory
Use Par Lists
Par lists are baseline inventory levels that you need to fulfill your customer's needs. They are most important for high-turnover goods like tees, balls, and gloves. Take a few moments to memorialize how much backstock you should have of these key inventory items. Par lists will make your ordering process much smoother. After you complete your monthly inventory, you can easily verify if your backstock is "up-to-par", and order as needed.
Utilize Secret Shoppers
Whether you are a public or private facility, you most certainly have a group of loyal customers. Talk to a few of these folks and ask them to secret shop your store. Ask them for feedback on the styles and sizes in the shop, the customer service they receive, and how your shop compares to other retail experiences. Reward them with a thank-you gift. This input will be invaluable as you refine your operation.
Don't Let the Customers Determine Inventory Turnover
Inventory turnover is a measure of the time you possess inventory before selling it. This number should be as low as possible. Otherwise, you have valuable cash sitting in your stock-room.
Start by creating a plan. If your goal is to turn everything in 45 days, then at day 46, inventory should be moved to a sale rack at 10% off. At day 60, increase the discount to 20%, so on and so forth. These economic incentives for your customers will help you achieve your desired turn.
Next, track what styles and sizes are being moved to your sale rack. This helps you understand what isn't selling quickly enough.
Finally, avoid buying inventory whenever possible. A great example is the trend toward custom-ordering hard-goods. Most customers want to customize their clubs, making it impossible for a small shop to carry an assortment of options. Utilize special orders and drop-shipment whenever possible. Additionally, ask your vendors to put inventory "on wheels" where you can return it for credit after a pre-determined period.
Switch It Up
In the golf industry, we are blessed to have extremely loyal customers who visit our shops time after time. Most humans are creatures of habit. They likely park in the same area of the parking lot, use the same entrance to the club and take the same path through your shop on every visit. If your shop is merchandised the same way throughout the year, these customers will see the same landscape and walk by the same displays time and time again.
To combat this, change your shop every 2-4 weeks. Move displays around. Move folded items to hangers and vice-versa. You'll be shocked by how many loyal customers comment on "all your new inventory" after a simple floor change. Along the same lines, change up your displays and mannequins weekly to keep styles fresh.
- Create and Open to Buy
- Create Par Lists
- Conduct Monthly Inventory
- Collect Feedback
- Proactively Manage Turnover
- Switch It Up
Follow these six steps, and you'll be well on your way to having a high-performing, and profitable, retail shop.