Speaker: 00:00:00

Most boutique owners today are losing money because they're buying based on emotion and

not strategy.

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Today I'm gonna teach you how to stop guessing and start buying like a boutique CEO.

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I've worked with thousands of boutique owners and the biggest reason I see boutique

struggle is this.

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They're buying like shoppers and not like business owners.

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So in this three part series, I am going to show you how to plan your product assortment

so that it's not just pretty, it's also

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Profitable in this video.

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I'm going to break down some of the buying basics that actually make money This is so that

you can turn your inventory faster Keep more cash in the bank and stop second-guessing all

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of your inventory orders in the videos to come you'll learn more advanced inventory

strategies and Pricing your products for profit.

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So don't forget to subscribe to the channel so that you get the alerts from the next two

videos come out I think you're really gonna love this series buying good

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product for your boutique is a lot of intuition and trend.

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Buying for profit is a skill.

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So many boutique owners confuse buying and going to market to get inventory.

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with having good taste, that's a piece of it.

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And having really good intuition in your boutique business is so important.

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Honestly, in any clothing product-based business, if you don't have good taste and have

good intuition about what you like, what your customer's like, and you don't have those

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emotional reactions, you probably will struggle a bit.

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What I find is that because creative people who are intuitive start boutique businesses,

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They often start off with some success.

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They pick some good items.

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They do get themselves on a roll.

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And I mean, I've had people come to me $10,000 a month to $40,000 a month just on their

intuition, doing really, really well.

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And maybe that's you.

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Maybe you've gotten to this point where you're like, yeah, I have used my intuition,

Emily, and I make good guesses.

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And that's served me really well.

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I've actually made a good amount of money.

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Let me tell you something.

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It has gotten you this far.

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but I don't think it's going to get you even farther.

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What I hear so often is, I made a million dollars in my boutique and nothing's in my bank

account.

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The problem starts with product and that's why we're starting here.

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Okay, so what is the key shift from turning you from an intuitive, good-tasted shopper

into what a boutique owner who knows what their buy plan is?

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It's considering yourself a merchant.

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A merchant is this beautiful position where

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You are a great curator, but you also base what you buy and your financial decisions on

data.

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So every single piece you buy needs to have a plan to price it for profit, sell it

quickly, and move on to the next item.

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We have to start thinking strategically like you are running a business, not just someone

who's out grabbing cute stuff.

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Every item in your assortment really needs a purpose and end use and that ideal customer

in mind Okay, so I know you've probably been on fashion go or fair one of our favorite

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websites maybe you even been to a market and you've you've done some buying and maybe you

haven't done any buying yet, but if you have Let's talk a little bit deeper.

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Have you ever created a plan for your buy?

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Tell me down below.

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Tell me like the good by the bad the ugly I want to hear in the comments

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Do you usually go to market with a plan?

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Do you usually go on Fashion Go with some sort of plan?

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If so, what are you basing that plan on?

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Tell me down below in the comments what you feel like prepares you to go and buy.

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Here's what I'll tell you.

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Most boutique owners that I speak with have a plan.

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They know the vendors they're gonna go to.

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They know about how much money they can spend.

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And that's good, but it's not great.

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And it's not going to end up being profitable.

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If you go and buy inventory without a plan, you're basically just gambling.

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You really need three things before you go and buy any inventory.

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A budget.

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Yes, you need to know how much you can spend based on your projections and based on the

past.

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There's some data in there that will help you understand what is your total budget for

that month or for that quarter, that season.

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And then next, you need to drill down into having a category plan.

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So not just a big budget, but...

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How many dresses do you need to buy?

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How many tops do you need to buy?

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At what average retail?

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At what average cost?

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Where's the margin coming in?

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You have to have those details or again, you're gonna get lost.

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Third is that ideal customer.

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What is she doing?

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What is he wearing?

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What are the nanas wanting to buy for their grandkids these days?

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All of those things come into account when you are going to buy.

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You want to look at an item and immediately say, oh, she's gonna buy that.

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She's gonna love that.

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She's gonna look great in that.

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If you don't have an emotional reaction based on either your perspective or your

customer's perspective, then there's gonna be trouble in the buying process and in the

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selling process.

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There's definitely a balance between buying what you love, which is my old school, like

you have to buy what you love because you really need to have the energy behind it to sell

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it.

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There's also a little bit of buying what you know your people are going to like.

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We've talked in interviews in past with some of my clients who realized they just didn't

have the right customer based on their location or based on how they were marketing

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themselves.

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We've seen a lot of people have to shift and just make some little edits here and there

because they realize their customer is a little bit this way or that way.

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And so making those fine tweaks and edits will come over time as you build your boutique

business.

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But I think it's important to understand as you go into market, like who are you shopping

for?

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And yeah, it can be you.

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It also could be Sarah who you profiled and you know exactly who she is and where she

works and what's going on with her, right?

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It can be a little bit of both too.

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What you need to know is that there is power in planning before you go make your buys.

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So if you're watching this, you haven't bought anything.

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Awesome.

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You're in the best spot.

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If you're watching this, you're like, Emily, actually have too much inventory or I don't

have the right inventory.

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This is the step by step process I take my clients through to create profitable assortment

plans.

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Product is my favorite thing in the world.

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I do have an emotional reaction to product and buying product and so I love teaching this

because it's something that I'm so passionate about and one of the reasons I'm so

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passionate about it is because I want more women especially to make more money

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Boutique and clothing businesses are one of the best ways for people to make a profit and

be able to support themselves.

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So for me, my biggest focus with anyone who has a clothing business or a boutique is to

make sure that your margins are good.

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Now your margins are the difference between what you pay for an item and then what you

charge the customer for the item, okay?

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That difference has to pay for a lot of things.

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It has to pay for more inventory.

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It has to pay for expenses.

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It has to pay for photo shoots.

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It has to pay for your life.

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And so on every single item, you want to be making at least a 2.5 markup.

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Now, some people say margin, some people say markup.

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I like to talk markup because it's super easy math.

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I'm on a mission to help more.

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women especially become retail nerds with me because I used to really not like math but

retail math is different and it's fun and it's easy and it's money.

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So I enjoy looking at it and I want to teach you how simple this can be.

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Most people out there will tell you to just double the price or double the price and add

five dollars.

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There's a lot of anecdotes going on out there but I'm going to tell you right now the math

only maths for a boutique or clothing brand business if you're at at least a 2.5 markup.

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Which means when you sell something at full price or a discount price You need to be two

and a half times the cost meaning if it's a ten dollar item that you paid ten dollars for

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You are going to charge twenty five dollars for that at the minimum Okay, are you tracking

with me here at the minimum?

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We want to actually make three times four times seven times like I don't care But it has

to have a good price value relationship.

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It has to make sense for the product So we can't just like arbitrarily mark something up

crazy amounts

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Well, I guess we could like corporations do but um, yeah, I don't know.

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I feel like we're more fair than that We're gonna take our markup and we're going to make

sure it's enough for us to make money because the combination of how much you mark up how

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well something sells and Whether or not you're gonna put a discount or a markdown or promo

code or whatever on it All of that comes into play once the money then hits your bank

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account

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So the money you make upfront, we want as much of that money to pop into your bank account

as possible, right?

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Am I right?

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I'm right.

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So when we're talking about markup, we need to think about profit.

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Operating costs any sort of inventory risks or capital risk we want to take and then also

occasional markdown sales Like I find a lot of people are running some kind of promo code

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or sale like all the time that eats away at your margin We like we've found so many

instances where just too many discounts were given too many promo codes too many

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ambassador things like it just Diminishes how much money you make and while those can be

really helpful marketing steps or they can be really, you know Wonderful ways to get new

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customers.

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We also just have to

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some boundaries on it so you're not losing a ton of money every time you're giving it a

discount to people.

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So right out of the gate I want you to start at either 2.5x or 3.5x or somewhere in

between there at a minimum for all your goods.

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So again the example is if it's a $10 item you paid cost $10 you're gonna times that by

2.5 which will get you $25 or times it by 3 $30.

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Hey, you can land at $27.

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I don't care.

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But Leah's at least be at 25 on a $10 item.

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A lot of you are gonna say to me, but Emily, if I price it lower, then won't more people

buy it?

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Like won't it sell quicker?

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Maybe, but it's not guaranteed.

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And if you price it lower, what if you have to take another mark down on top of that?

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Like you're just losing money, losing money.

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If we can plan for our inventory to turn fast, and that means like come in and out of our

store.

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then we can actually update more often, we can be more profitable.

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It's really about how quickly something moves through your store.

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I teach this inside of my courses and it's a little bit difficult to sort of imagine.

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unless you're in the process of owning a store.

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It's kind of like the rhythm of the store is your inventory turn.

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So how quickly are you selling based on how much you've bought?

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You never want to be like selling out of everything, but you also don't want to sell so

slowly that you just are sitting on the same inventory for six months.

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So we've got a price and mark down our products in a way that makes sense to turn through

inventory where again, we're still making that profit.

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So how do we think about turning products for boutiques?

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Well, about every four to six weeks, you want to either do some markdowns or run a sale so

you can get through that past four to six weeks of inventory.

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I like people to have an item, have a style for four to six weeks and then move on.

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Now that is going to vary if you have something that's more basic versus fashion, know,

over the top versus, you know, a really easy everyday wear.

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Like it's always going to

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depend on how quickly items turn based on all those factors.

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But seasonal inventory, let's say you're buying for spring, you're buying for summer, you

want that gone in like four to eight weeks.

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You wanna sell through it all, be done with it.

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And the cool part about that is that the quicker you sell, the easier it is to reinvest

because you've got cash flow, right?

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You're bringing in items and you're selling items at a nice pace.

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to where you have money coming in and then you're going to have to have money go out

again, right, for more inventory.

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So managing the balance of inventory turn is one of the biggest parts of product

assortment I think most people don't notice.

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They look and they say, my gosh, I have so much inventory.

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Yeah, but of what and why do you still have it and what was the mistake there?

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I actually went to a client's house once and she was like, we just have so much inventory

and I said, listen, pull one of everything.

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I showed up, they had four racks, like,

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stuffed with stuff and we literally just started going through and I said, did this sell?

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this sell?

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Did this sell?

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We started a collection.

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So we started to move everything to the rack that didn't sell.

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And what was still on the rack was selling and it was so clear what they had done wrong.

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was so clear that they were filling the shelves with just like whatever they could get and

it didn't really fit the aesthetic of who their core customer was who was actually buying

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these pieces, right?

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The things that were really working.

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And so we had to change our assortment completely.

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But that's the point is that, you know, if you're watching this and you're really deep

into your business and you feel like, wow, I have so much inventory, that's a good

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practical next step for you to take is to figure out why are things not selling?

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Why are things selling?

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Right?

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That's where we can start to tweak and make sure that

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inventory turns starts to get faster.

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The thing is, is if you're holding on to inventory too long, you're just missing out on

opportunity.

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Like having a fall sweater in March, it's not going to sell.

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You're going to sell spring stuff in March.

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Even if it is a sweater, it's going to be a different color.

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It's going to be the new trend.

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And so to hold onto items for too long,

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doesn't make sense because you're going to miss out on what's going on in the marketplace.

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Okay, so we've gone through a lot and I think there's a lot to dig your teeth into and

hopefully, know, some of this is review and some of it might be new for you, but this was

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meant to be sort of the basics of what I want every single boutique owner clothing

business to understand before they buy one piece of

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clothing, whether that is their first order or their their hundred and first order, you've

got to understand that buying product is about strategy and it's about profit, not just

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about buying what you love or buying what looks good or buying what that other boutique is

selling and seems to be selling out of like that's not it.

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We can create a plan for you that works for your ideal customer works for your price

points works for you.

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This is your business.

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need to make this personalized.

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So in the next video, I'm going to go deeper into how to manage your inventory better so

that you can keep your cash flowing, make your buy plan smarter and just overall stop

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drowning in inventory.

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If this video helps shift your mindset or gave you some new ideas or perspectives, I would

love if you liked or subscribe to the channel and remember comment below what you've taken

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away from this video and how you're going to adjust what you do to buy your next piece of

inventory.

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I would love to hear more.

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All right.

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Thanks so much for

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joining me.

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Here's to making lots of friends and making lots of money.

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I'll see you on the next one.