Good buying

I worked in retail for about twenty years and I learned that good buying is much more important than good selling.
I moved to Somerset in the mid 1980s to open and manage a 3000 sq ft CTN (Confectionary, tobacco, news) in Wells. I was responsible for most of the buying, with the exception of the promotional items. The company used a separate firm to negotiate deals and import goods from the Far East.
Less than eighteen months after joining the company the buyers had destroyed the company, one that had  a history going back over 100 years.
Some examples.
Easter Eggs. The company decided to take on Tesco and Woolworths and sell Easter Eggs at silly prices. Bear in mind that most of the shops were small newsagents less than 1000 sq feet, that is, a fraction of the size of an average supermarket, with a correspondingly smaller number of customers, no advertising budget and tiny windows to display your goodies.
Not looking hopeful is it?
The company were persuaded that it was a good idea and we went ahead. We received deliveries of eggs that filled every nook and carnny of the store. We pile the eggs high and sold them cheap. Come Easter Monday we'd sold thousands at great expense of energy and stress. However, we still had thousands left over, so we had to reduce them in price still further in order to clear them.
Then we sat down and worked out how much profit we'd made by selling all those eggs at give away prices.
None. Nothing. Zilch.


Then  there was the toys and fancy goods. Every month I'd drive up the country to a presentation where the buyers would show us what they'd bought for us. They made a great play of how much margin these goods would produce. (assuming that we could sell them).
Then the goods would arrive. Lorry loads. Every shop had more stock than it could display. Each month we'd remove all the unsold items from the previous month's special promotion and put them in the stockroom along with all the other unsold items. Each month we'd get more stock and the backrooms would be bulging with unsold goods.
The ultimate insult came in 1985, when the buyers decided that we should be selling Acorn Electron computers. Just the hardware. There was no software available. I received ten of these misbegotten follies to sell and set one up on the counter. Remember that this was a W H Smith type of outlet. We sold newspapers and magazines, greetings cards, tobacco and confectionery and some toys and gifts. We also sold records and cassettes and outsold the Woolworths next door.  Wells is a tiny city of about 5000. There is a tourist season but the winters are very quiet. And I had to sell computers without software and without any training. I'd never seen a computer let alone operate one.
I went without saying that the company's financial situation became dire. We were on stop with all our suppliers,and had to pay cash on delivery for cigarettes. The margin on cigarettes is tiny, less than 5%, so it was clear that we couldn't survive.
And we didn't. We were taken over by Martins, part of the Guiness empire at that time.
I hated working for them. In some respects they were worse than the other shower. But at least they had their buyers under control.


I learned that potential profit margins are only potential. Until the cash in in the till, the product is either a liability or an asset. Good buys are an asset, bad buys are a liability.


I left the company in 1986 after about two years. The new management treated us like criminals. It wasn't the fault of the store managers that the buyers were out of control, but we got the blame. I kept a tight control of the items that I was responsible for buying. I kept waste to a minimum and kept a close eye on the shrinkage. I sacked one member of staff for underringing on the tills and that dissuaded the others from trying it on.
What did it for me was when the chief executive of Guiness awarded himself a 10% rise. The Martins staff got 5% and those of us who'd been taken over after our firm had gone bust had to be content with 2%.
It was time for a change again.