With the new Catalog available right around the corner and preorders starting I thought it might be helpful to re-feature an article by John Sanpietro.
Buying Like A Business Owner by John Sanpietro
Stamping Is My Business!
These are tough economic times for stamping business owners.
I'm not talking about the recession. I'm talking about the new catalog and the strain it puts on your wallet!
As I see e-mail after e-mail about the new catalog and "Wish Lists," etc., I think this is a good time to talk about the differences in buying habits between a stamping business owner and a hobbyist.
The question is this –Are you an SU business owner… or just one of SU’s best customers?
If it’s the latter, that’s OK. As long as you know it. If the answer, however, is the former… or if you'd like it to be… read on…
Buy what you need… not what you want
This, in essence, is the difference between a stamping hobbyist and a stamping business owner. Want-based buying is emotional. Need-based buying is intellectual. And it can be very difficult, when emotions are running high with the new catalog, to remove emotion from the buying process.
So what do you need?
Buy what you can sell
I introduced this formula several years ago, and I barely mention it now because it gets thrown around so often. But, in case you haven’t heard it before, or need to hear it again, the math is very simple. If you can sell five of something, you make a profit it on it. If you can’t, you lose money. So, only buy product that you’re confident you can sell at least five of. Most of my clients actually won’t buy something unless they can sell ten or fifteen of them, as the additional profit offsets the cost of other purchases which do not have a direct return.
Don’t buy beyond the size of your business
If you’re a Demo who has more stamps than customers, that’s a problem!
Seriously, you’re never going to be able to make an adequate profit that way. Depending on the number of customers you have and the amount of contact you have with them, there’s only a certain amount of product you can realistically sell. If you buy more than this amount, you’re going to lose money.
To prevent this from happening, I would like to suggestTHE HASH-MARK TEST:
· · place a label or a post-it on each new product you buy from Jan. 1st on
· · each time you sell one of that product, place a hash mark on the appropriate label
· · just before you receive the next catalog, pull out your inventory
· · check to see how many of your labels have five or more hash marks
If you have labels with less than five, that represents a product you lost money on, and one less product you should buy in the new catalog cycle. And, yes, the flip side of that is if all of your labels have more than five hash marks, you can feel comfortable buying MORE product!
Don't spend more than you're making
If you don’t have the time or the inclination to do any of the above, at the very least,make sure that you’re not spending money you don’t have. The hole you dig has financial repercussions well beyond your business, and, in some cases, can take a very long time to get out of.
Remember, you don’t have to buy everything at once AND if you just buy what you need, you’ll probably be a Demo longer and you’ll end up with more product in the end.
Certified Business Coach
Stamping Is My Business!