Foreign.

You are listening to the Horse Radio Network, part of the Equine Network family.

Well, hi everybody.

Glenn the Geek, back with you.

Founder of the Horse Radio Network and host of Horses in the Morning.

The daily podcast has been going on for 15 years now.

Welcome to the WESA Retail Roundup.

The Retail Roundup is your go to virtual hub for all things retail.

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That's where we all communicate.

That's where we keep in touch and let you know what's happening.

And we're only a month away now from WESA over in Dallas.

We'll all be there in person looking at new products and things that are happening in the, in the world.

So excited to meet some of you over there.

In today's Retail Roundup, we discuss the importance of inventory management.

Everybody's favorite thing with Danielle Malconian of Plus by Design.

We all know that managing your inventory is one of the most important things you do and if not done well, it gets costly very quickly.

So Danielle, thanks for joining us.

Thank you very much for having me.

I appreciate it.

Did I get the last name right?

Malconian.

You did.

Well done, Malconian.

Yes.

Yay.

I love that last name.

Thank you.

So tell us where you're located.

We, we are located in Los Angeles, California.

We ship out of a warehouse here in Chatsworth.

And what is plus by Design?

Plus by Design is a online retailer of women's plus size clothing.

We offer a high quality clothing that women wear to work or to special occasions.

And it's a product that can, that is, that lasts a long time.

And, and we have a very loyal following.

The brand, main brand we sell is called Vicki V and that's been around for about 30 years.

And, and I've been working at multiple brands.

You work with multiple.

We do have multiple brands, yes.

But I also manufacture the Vicky V label and you.

So what I'm getting to is, you know a little bit about having a number of skus.

Because nothing has more skus than clothing.

Yes, yes, we are over skewed in the clothing business.

Yes, well, that's what we're going to talk about, you know, and I think that's why Jennifer contacted you about inventory management, because you know a little bit about that.

You're on the manufacturer side, but also the retail side.

So you're handling it.

I am.

I've been on the retail side for a very long time.

Yes.

With department store and now as my own company for 25 years.

I wanted to mention, too, you do have a connection to the horse world.

Your daughter is involved with therapeutic Riding Center.

My daughter, Juliet, yes.

She sees clients at three different barns in Sonoma County.

County in California.

And she's been a horsewoman as long as I can remember.

So she's gonna love this.

I'm gonna send her the link and she'll love it.

Way to go, mom.

Yeah, yeah, she'll be so.

It's really great.

She's gonna have you riding next.

I don't know.

I don't know where that came from, to be honest with you.

I'm allergic to hay.

It just starts.

It just starts when they're about four, and then it goes.

Exactly.

She would wake up.

Mom, I. I had a dream there was a horse in the backyard.

I'm like, okay, at what age did she get the horse in the backyard?

She didn't have a horse in her backyard.

We had to go to the barns.

Sorry.

There you go.

I don't live in a place to have a horse.

Yeah, you're the kind of an expensive area to have horses in the backyard.

I'm a city gal.

Exactly.

I'm a city gal.

Well, then her saddlery would be Calabasas.

That's right.

That's right.

Yeah.

We've spent many, many times.

Many.

I was just there recently buying her birthday gifts.

So many dollars.

Yeah.

That's a great place.

It is.

Many dollars.

That's right.

That's a cool store, though.

Yes, it is.

All right, so let's talk about inventory management.

Okay, so first question.

How do.

How do you make decisions on what and how much to carry?

How do you do it?

What do you.

What are you.

What's your thought process that goes into that?

I've always followed a plan of trying to carry what I would sell within three months.

Has.

Has always been my.

I think I learned that at Nordstrom, to be honest with you.

I worked for Nordstrom in the 90s, and that's kind of the way they did it, and it made a lot of sense to me.

So I take my.

My average cost of goods number having to do with my sales, and then I multiply that by three.

So what I was talking about was the high level amount of inventory to carry for your store to be healthy is three months worth of a dollar amount.

Okay.

So that's how I decide how much inventory to carry.

Generally when you're talking about replenishment, which I think is what you're.

Especially a store that carries the same type of things all the time, and they're just replenishing sizes and colors and that sort of thing.

And is.

I use inventory management software, which is really, I used to do it by hand, you know, and now there's so much software out there that can tell us, they can look at the history of our selling and tell us what we need in the future with a few different parameters set, you know, how long it's going to take you to get the shipment, how, how long you want to be in stock.

You know, a lot of different parameters there.

What software are you using?

I use inventory planner.

Was there a reason you like that particular one?

You know, I tested a couple when I was looking for an inventory software and I just wanted something really robust that had planning tools that would keep track of all my sales.

I was looking for something that was really good at predicting what I would need for the future.

Has it been good?

Has it been accurate?

It has been accurate.

You have to be careful with some of the prediction software.

You have to make sure that all those little levers are set about how long it takes to get the product, how long you want to be in stock.

That really makes a difference in getting the accurate information of what to order.

Style is a problem too, in your world, right?

I mean, isn't that something?

You're also taking a look at what's coming in, what's going out?

Fashion.

Fashion.

It's funny that you mentioned that because I'm going through that today, actually.

I've gotten a new collection in which is a bright lemon color.

And if you know anything about fashion, it's a little late in the season to bring in bright lemon.

If I had my druthers, I.

It would have arrived back in March, but, you know, it's fabric coming from Korea.

And so now I'm introducing Limoncello in July and trying to decide whether or not to offer it at full price or give a little discount.

So you do have to be worried about seasonality, especially in the clothing.

In the fashion clothing area.

I know a lot of these stores do carry that.

And, and if you're bringing in a new, brand new product line, what is your thinking then?

Do you take a look at similar products like it to decide how much to buy or.

I do.

I mean, I look at all my history.

I. I go over what size is sold and where.

And a hard thing for me right now is that are losing weight because there's a trend OIC and the GS1s.

So that has skewed my sizes a little bit.

And I think that's probably true a lot, you know, across the board for people.

Not just plus size clothing, but when I'm bringing in something brand new, honestly, there is a lot of guessing.

So the educated guess is probably where.

Where it is.

Which if you have the longer the history you have, the more you can.

Exactly.

You know correctly.

Right, exactly.

And honestly, as much educated guessing as I've done and whenever I'm absolutely, positively sure that something is going to sell, it doesn't.

And whenever I think something is a total dog and it's never going to sell, it's the first thing gone.

So that has not changed since your Nordstrom days either.

That has not changed since my Nordstrom days.

It's just.

Okay.

Oh, you like that one instead?

All right, it's true.

It's true.

Oh my goodness.

How do you decide then?

I'm going to follow that thread through what you just said.

How do you decide when it's time to cut bait and, you know, put it on sale and get rid of it and run?

Is there a magic number you're looking for if it hasn't, you know, if 50% of it hasn't sold through in three months?

If, you know, do you have a magic number there?

Well, it depends on what it is.

And one of the things I learned at Nordstrom is to split my inventory into what I wanted to carry all the time and what I wanted to carry seasonally.

So the, what I carry all the time doesn't go on sale.

And I just try and keep it stocked the way that it should be stocked.

Like your basic riding pant, you know, basic black riding pant that sells day in and day out.

You don't think about it, you just keep it stocked.

But when you're talking about the, the cool zip up printed thing from the latest vendor, I give it, I still use that three month rule from Nordstrom.

It kind of, it kind of in that, in that same place, the problem is you can't mark down something too quickly or the people that, the few people that bought it at full price, it just kind of detracts from your honorability.

You know, you want to have a reputation that this is the price it is and this is, you know, this is what we believe it should sell.

So you do have to wait and you can Do a little flash sale when you have stuff like that without touching, you know, without redlining your item.

If you're a retail brick and mortar store or even online, try not to actually mark down the item until you absolutely have to do little flash sales, do bundle sales, little things like that, to get people to buy some of those things that aren't moving so quickly.

How often do you look at the inventory?

Every day.

I look at my inventory every day and I, you know, it's mostly because when you're.

I don't know if your listeners are mostly online or brick and mortars, is it kind of half and half.

Right.

So when you're online and these days especially, you have to have live inventory, you know, so what you have needs to be what's online.

So, you know, back in the old days, in the brick and mortar days, you would do inventory maybe once, twice a year and be like, oh, okay, you know, that's what we have.

But today, if somebody orders something in a 1x, a yellow top in a 1x and I don't have it, then that's a customer service issue.

So our inventory needs to be very accurate all the time.

Yeah.

Especially with online.

That changed 20 years ago.

Right?

I mean, for all of us.

Yes, exactly.

Yeah.

I mean, and when it first started, though, people were still not necessarily linking their inventory to their online, and they would just let it sell and then get a hold of the customer or whatever.

It just doesn't make sense to do that now.

Amazon changed that.

Yeah, good old Amazon.

Amazon changed everything.

Yeah.

Expectation was the big thing, you know.

Right.

It's hurt a lot of small stores.

It really has.

No question.

It's unfortunate, especially.

They can, they can order it today and get it tomorrow.

And it's really, it's.

I think, you know, there's.

There's a little bit of a pendulum swing coming back to people wanting to shop in the smaller stores, though.

I'm.

I'm feeling that myself.

I did a survey with our horse listeners, our super fans, and we asked them how they felt about Amazon, and It was about 50, 50.

I was surprised at how many said, I'll never shop there again.

It was about 50% and then 50%.

Looking forward to prime day.

Right.

So it was about 50.

I don't think it's ever been 50.

50 before.

I think so.

You're right, is what I'm saying.

I think that is there is a change going on there with a certain percentage of the population, because we don't.

Want to see these brick and mortar stores go out of business and it's becoming more and more obvious that that's what's going to happen.

And you're not going to be able to go into that store and say hi to the owner and do all that.

So it's important.

And the other problem we have, of course in our world is there's less and less brick and mortar stores.

Right.

So some of our listeners, when we've done sur in the past are six, eight hours from a physical store that carries anything horsey.

Right.

So they're ordering everything, same thing in plus size clothing.

Yes, true.

Yeah, right, true.

There used to be stores around all over the place that had it.

Yeah.

Not anymore.

So what would you say the biggest mistake people make in inventory management stores.

Specifically, you know, retails, as, as retailers, we get tired of our merchandise before our customers do.

Oh, interesting.

And especially if you have new customers coming into your store all the time, what you bought six months ago is still, is new to them.

But we go to market and we think, oh, I'm so tired of that.

Oh, let's, let's buy that.

We need, we need newness, we need more and more and more and more and more.

But you really have to take a look at your open to buy, which we haven't really talked about, but the dollars that you have open to actually go buying.

When you go to the market, we get excited.

You know, we, we love the business.

You know, it's like Christmas when the box.

Right.

You get to open what you order.

Like going to an auction.

Guilty.

It's awesome.

Exactly.

And so we have to tamp down that excitement and really look at the numbers and say, okay, you know what, this is what I have to spend.

This is what I think I can sell.

Even though I personally love that new dress, I don't think it's the right time to buy it.

So it's just tamping down your emotions, I think for me.

Do you go to markets?

I do, I do.

So when you go to a market, do you have in mind before you go, do you have a plan?

Okay, I'm looking for, I'm looking for shirts, you know, this percentage of shirts, this percentage of pants.

Do you break it down that way or.

I mean, I shop more in collections and vendors.

And the issue too with plus size clothing is there's not that much availability.

So I do have a problem with that and I do have a strong plan.

When I go in, I have to say I'm guilty as charged though.

When I start talking to A salesperson about their fantastic line.

And what I've actually learned to do is not write the order at the show.

I just won't do it.

But they want you to show today.

You'Re gonna get 20% off of free shipping.

Yeah, I.

And you know what?

Maybe that is an enticement to me, but I. I've made the worst mistakes.

When I leave the paper at the show, I would much rather.

I'll tell them, you know what, Let me go back to my hotel room.

Let me just work out my numbers.

Because you know what?

They also don't want to put in all the prices and give you a total at the bottom when you're at the show, they just want to put in the items on the yellow page.

Right.

And you're supposed to be like, okay, sure.

So I tell them, you know what?

I want to go, and I just want to.

I want to add everything up and see exactly what I've spent today.

And I will get you the order by the end of the night.

Hopefully you'll still honor the 20 off.

Do you.

We were talking about lead times earlier.

You know, do you.

Have you changed your lead times now that things, you know, shipping's weird.

Have you changed your lead times?

Are you still working off the old lead times?

Are you talking about imports?

Yeah.

Yeah.

So I don't really import anything.

Okay.

Our.

Our product is made here, but you have to.

And one thing, you know, I'm going to bring up.

I deal with a lot of store owners because I work for score.

I'm a business mentor, volunteer.

And one thing I've been warning them about is that some of these vendors in China are not adding the tariffs to your pricing.

They're letting.

When you get your shipment.

Yeah.

They're letting you just get it.

Surprise.

Yeah.

So.

So people need to really be aware of that.

That practice of them getting in orders.

That are fifteen hundred dollars and shipping's fifteen hundred dollars, you know, with the.

Right.

Exactly, exactly.

So you have to be so careful of that.

Yeah.

And it's hard because some of this stuff we can't get here.

You know, it's.

It's hard because you're just going to get it overseas regardless.

And, you know, and.

And, you know, it's so hard to keep up.

Now, we had a talk on tariffs a couple of weeks ago in the show.

It's just hard to keep up.

Up, you know.

What's.

What's.

What?

Well, yeah, no, it is hard to keep up because, you know, the minds are getting changed every day.

So who knows what's actually going to happen?

And exactly when you order the thing, the tariff might be different when it actually arrives.

So, you know, that is scary.

I would love to see the manufacturing come back to the United States a little bit more, though.

I, I think there's a possibility that could happen.

So is there a point with, with your inventories, okay, so on products that are not the, the baseline products that you're going to keep, is there a point with, with the, with the seasonal product or with the product you know is coming and going, when you get to a certain level of inventory, 50% of that product, 20% of that product that you're going to, you're going to get rid of it at that point.

Do you have a level in mind for those products?

You know, it, it really depends if it's, if it's a group that hasn't.

I sell in a lot of collections of colors, right?

So I'll bring in one color, a bunch of different skus.

If the, if the color has sold well and I'm broken, we keep on breaking up.

And, and if it sold well and the sizes are broken and I know that I cannot get any more.

That's really when I decide to mark it down because people like to, to buy sets in my business.

So if they can get the jacket, but they can't get the pants anymore, then that's the reason that I mark it down.

If it's not a color that sold well, I do all those other things I was talking about, like maybe offer a flash sale or a bundle or go through that before I actually go ahead and mark it down.

I try to wait that three months at least.

So re.

You know, retailers grow, right?

We hope, we hope we're growing and you've grow as time went on.

It's.

You always seem to need to add to your collection, to your, to your inventory before you can afford to add to your inventory.

You always need a new employee before you can afford the new employee.

It always works that way.

That's right.

How do you make that tough decision that, okay, I'm doing pretty well with what I'm, what I, what I have in inventory now.

I need to expand the line.

How do you make that decision?

That's a tough decision to make because you're putting money out there.

You know, that's, that's surplus, right?

That's above what you know.

It's a risk.

Yeah, that's right.

That's right.

And, and you, you bring up a good point is people need to understand that when you're growing, anytime you grow your inventory beyond the normal levels, you're using your profit.

Hopefully there's profit to do that with.

So when you're feeling like you have a cash crunch, a cash flow problem, it's probably in your inventory.

So you do have to use money from that bottom line to buy more inventory.

And you're not going to get it back because you want to keep that inventory at that new, higher level to sustain the growth.

So it is literally an investment in your business because even if you sell that new inventory, you still need to replace it.

So, you know, what you really have to do is listen to your customers.

What are they walking in or calling or emailing, asking for that you don't currently offer, and really think about that.

If you want to expand your line, maybe you don't buy another style of or another print top, but maybe you think, what are the customers really asking for that I don't have?

And try to fill those needs and that's a little less of a risk, in my opinion.

And we have to be careful too, because when one person asks for it, you think that everybody wants it.

I have a. I have a rule.

We get a lot of fan.

We've been doing these shows for a long time and we get emails, right.

And somebody will complain about one thing or they'll want to see something else.

I kind of discount that a bit.

I listen to it, I look at it, but I.

When I get four or five or ten emails about that same thing, then I start to pay attention.

Same here.

When you're buying inventory, one person asked for that specific thing.

Doesn't mean everybody wants.

Oh, that took me a long time to learn.

It's hard.

I've wasted a lot of money.

I have wasted so much money going after this.

Yes.

Oh, my gosh.

And I've got these sweet, sweet ladies that, oh, you know, I need this, but I need to order 12 of them to get you that one.

Do you understand?

No, they don't.

And they don't care.

So I've learned to say no.

I've learned to say no.

Yep.

You have to say, if you hear.

From four or five ladies, then, then you start to think about it.

Okay, then the 12's worth it, right?

Exactly.

But it's hard because people pleasers, you know, that's right.

And pay attention to the trends.

You know, the trends really tell you, you know, reading your, you know, staying up to date on your magazines and online magazines, obviously, and, and, you know, really Seeing what, what new thing is out there because people are looking for those new things as well.

How much are to find trends?

How much are you paying attention to TikTok and to Instagram and those things out there?

Are you watching the influencers in.

In the plus space?

You know, I'm not, I'm not watching the influencer.

They're.

They're young.

They're really young.

And my customers are 50 plus, so they're not necessarily.

I pay, you know what I do.

My biggest one is Pantone.

I watch what, what the color of the year is, and it sets a tone.

It's.

It's really interesting.

I always think of paint when I think of Pantone.

Right?

Yeah.

Yeah.

But they, they set the color of the year.

So anything else you want to leave with anybody about, give the name of your software again that you use.

The inventory software is called Inventory Planner, and I did make a list.

There was Zoho inventory.

There was Sin7Core for scaling needs.

Zoho and Sin7Core, which is C I N7.

Yeah, Shopify.

But I, I don't really like.

I have a Shopify store, but I don't use it really to manage my inventory.

I don't find it robust enough.

But there are lots of apps that Shopify works with.

Just use something, you know, that's the most important thing.

And, you know, one thing I've learned over the many, many years is when you have a bad day, just try to let it go.

It doesn't mean that the sales are never going to come again.

I literally have to tell myself that all the time.

It's just, you know what, people are busy.

And especially right now, it's summertime and, and people are out doing stuff and they're not necessarily busy purchasing.

So, you know, the sun will come out again and the clouds will go away and everything is going to be fine because, you know, as long as you have a great store and you offer great service, you know, and are willing to take back returns if you can, I really recommend doing that.

One of the biggest mistakes beginning podcasters make is they look at their numbers every day.

Right?

Download numbers every day.

We.

I look at them quarterly because I want to see trends over quarters.

Right?

Daily doesn't matter to me because it, it doesn't tell me anything.

It doesn't.

It doesn't tell you anything.

And it's true when you're looking at sales too, you know, you take a look at the court, you know, year over year, quarterly is much more effective than year over Year, monthly.

Because you're right.

Yes.

And it's going to change a little bit every year, but depending on weather too.

That's the other thing that affects our world too is whether people are going to shows.

They're not going to shows because they've been canceled, you know.

Yeah.

It makes a big difference.

And how about what's in the news?

I mean lately that's really been getting people.

No matter where you fall on the skit on the spectrum, it makes people upset.

So, you know, but the thing I have to remind people too is especially you and I, we have been through this cycle every cycle, many times.

Many, many times.

It goes up, it goes down, it goes up.

It's, it's always going to go up and down.

We're always going to have her ups and we're always going to have her downs.

It's the planning process.

To plan for those downs when you're up is very difficult.

But it's what keeps you in business.

That's right.

That's right.

Be prepared.

And I think a lot of businesses lost it in the, the big up.

That was Covid Right.

When everybody's sales went through the roof and they thought it was going to stay that way forever.

RV industry is a perfect example of that.

Their sales went through the roof.

They started manufacturing all those RVs.

They kept manufacturing for the next three years and sales plummeted.

So now they're, they have way more inventory than, than they need because they thought it was always going to stay up.

It's never always going to stay.

Right.

No.

Especially something like that.

Exactly.

Yeah.

Yeah.

And you know, even.

Can I ask you one other question?

What percentage you sell online?

Right.

Because I saw your store.

It's very well done.

What percentage do you do in brick and mortar and in on.

You know, we don't, we have a couple of small boutiques in the country but they are few and far between these days.

The small boutiques that carry plus size clothing because it's hard to support a brick and mortar store for just plus size clothing.

And this, the, the other stores don't really want to deal with it.

So it's, it's really a hard part of our industry is that it's all gone online.

Gotcha.

Where can people find it?

@Plusbydesign.Com Just like it sounds.

Plus by design.

That's right.

And Vicki V is all V V I K K I V I.

And that's the, the wonderful brand I've been selling for 30 years.

Very good.

And Danielle, so I really appreciate the opportunity.

This audio on Wisdom by Wes on the Pot any podcast player.

Also on our YouTube channel, you'll find the video on the wesatradeshow dot.

My wife and I will be at WESA.

I think this is our 30 something 8th or 9th time or something.

We'll be there in August, so we're looking forward to meeting a bunch of you.

Wisdom by Wesa is a podcast that WESA does as well, talking to people or to members of wesa.

And my wife hosts that.

Jennifer hosts that, so you can check that out on the Wisdom by Wesa podcast player.

We'll be back again next week, so look for us then and you can find all the details at the Retail Roundup Facebook page.

Have a great week everybody.

Sell bunches.

Thanks again.