How To Use Your POS To Price Plants By Quality
On a beautiful spring day, you receive a shipment of impatiens. As you unload them from the truck, you notice that these impatiens are much nicer (bigger, healthier, brighter colors) than the impatiens you already have in your store. Conversely, you get a shipment of impatiens and they are not nearly as nice as the product you already have in your store. However, the impatiens are in the same sized containers and the cost of the product is the same.
What’s a retailer to do?
Choice No. 1 is you do nothing — you sell all the impatiens at the same price and just know that the nice product will leave the store faster.
Choice No. 2 is you sell the impatiens based on their quality. In other words, sell “premium” impatiens at a higher price point and the “starter” impatiens at a lower price point.
Use POS To Price By Quality
So how do you sell the same product at a different price point without having to jump through a bunch of hoops to keep your inventory straight? Every POS system provides you with one or more options when it comes to dealing with this issue.
The Grid System. Some POS systems allow you to “grid” an item. This is typically used for products that come in different sizes and/or colors, but are really just one SKU.
BOGS Rue Garden Shoes or Muck Boots are excellent examples of an item many garden centers carry. A typical POS system will allow you set up one SKU for your Muck Boots, then set up the different sizes and colors in a grid or cell format. As you receive and sell the specific sizes and colors, your system will keep a running count of the amount in each cell without having to set up an individual SKU for each size and color combination. This is a tremendous time-saving feature, and if your POS system included this benefit, you should be taking advantage of it.
The good news is you can use this same feature when pricing your starter or premium plants. Set the impatiens up as a gridded item and then, instead of tracking size or color, track starter, regular or premium. This should allow you to price each type of impatiens at the appropriate price point and receive and sell product from each cell. Since this is just one SKU, you will see the total quantity on hand of impatiens as well as which of the products is selling the fastest.
Create Different SKUs. Choice number two is not as jazzy, but it will work. If your POS system doesn’t provide you with the ability to grid your inventory, your next option is to set up three different SKUs for your impatiens; a starter, a regular and a premium impatiens. You can then receive the appropriate quality of plant, set different price points and track your success in turning each plant type.
The obvious disadvantage is that you have now tripled your inventory SKUs. Whereas this was once a space issue, there really isn’t a system that will break if a garden center sets every item up three times. Your inventory clerks may not be real happy about the extra key stroking, but the advantages are significant.
Please note that you will need a different barcode on each quality of plant. It is possible that you can receive a different quality from the same vendor, perhaps even in the same shipment (and therefore have the same barcode ID). Place a different barcode sticker on the starter or premium plants to capture the correct price.
More Money In Your Pocket
When premium plants come in to your garden center, you have two concerns. First, the goal of all retailers is to get every reasonable dollar from your customers. The second is to turn your inventory as many times as possible in season, without having to throw away too much inventory in the end.
When starter plants come in, you want to be able to identify the lower quality and get the vendor to adjust his pricing. However, it is still important to completely turn the inventory.
If a vendor adjusts his pricing, you lower your price and still don’t sell the product, you have put both time and money into something that just cost you money. The bigger question is: Is this a recurring problem with this vendor? Is there a problem with a particular plant this year?
Without real data, you are relying on your memory, going through paperwork manually to verify what you think you know, or just guessing.
Reports Are A Great Buying Tool
Regardless of how you choose to deal with the issue, the end game is all about the data. So let me ask the real questions: What is it that you want to know at the end of a week or the end of the season? Is it vendor performance that is important? Is it turn-rates? Profit dollars? Weeks on hand? Gross Margin Return on Investment (GMROI)? Something else?
Having worked with more than a hundred garden centers over the last 15 years, I can tell you that there is no one thing every retailer wants to know. So take a few minutes and decide if the additional plant tracking is worth the time and effort you and your staff put into it. If it doesn’t make you more money, don’t keep doing it.
I would like to make one report suggestion: please review the vendor performance data. In January, I held two seminars at Today’s Garden Center’s Essential Buyer’s Workshop at AmericasMart and I asked all the attendees the same question: Did you look at (or print a report) how the vendors performed last year before coming to Atlanta?
Only one said yes. How can you place an order with a vendor if you don’t know how that vendor preformed last year? Plus, when it comes to your growers, you need to keep a special eye on quality. Tracking starter, regular and premium plants from a vendor may be a very eye-opening experience.
Whether you are using CounterPoint, SIMPos, QuickBooks POS, Activant or one of the other POS systems on the market, there is a solution to this problem.
Please contact your POS service provider for the specific details of how to best take advantage of your system. Once again, please, make sure you are getting every available dollar into your garden center this spring.