Good Buying or Goodbye

I've already posted about one firm that went bust because of bad buying decisions, now I want to tell you another story about my time working in retail.
I was working as manager of a large bookstore in Northampton in the late 1980s. The store was set up by the Goldsteins when they were directors of Kingfisher Plc. They d sold Superdrug to Kingfisher a few years before and wanted to try something new. Volume One Bookshops was a new concept in retailing and a complete change from the "libraries with tills" look that characterised bookselling at that time.
Our shops were bright, had acres of space to display books with the covers out rather than spine-on, and sold videos as well. Sell-through video was a very recent concept. Up until that time videos were rental only. No-one foresaw the potential, or that legions of Dr Who or Startrek fans would buy every episode of their favourite shows to watch at home over and over again.

Volume One were one of the first to sell videos alongside books and in time the business grew so that half our turnover came fom selling VHS cassettes. We ordered our stock from a wholesaler called Parkfield. They were the main wholesaler in the UK. We could ring our order in on a Monday and it would be delivered the next day. This meant that we could keep our stockholding to a minimum and reduce our exposure to bad purchases clogging up the shelves.

Sell through video was like pop music with a very short shelf life. A film would be released on a Monday, sell for a week or two and never sell another copy. It made sound economic sense to keep our stocks at a minimum, although the margins were lower than if we had bought direct from the publisher. Using a wholesaler made such good economic sense. The wholesaler held the stocks and we could replace our sales within a couple of days. Constant stock-turn more than compensated for the lower margins. This was good buying.
We started having problems with our video supplier soon after we read in the press how they planned to become the largest video wholesaler in Europe. Each delivery would have lines missing. This went on for week after week. I found out that the firm were taking in so much stock for the Christmas rush that the staff didn't have time to pick the orders going out to the customers. The problem of short deliveries got so bad that we had to change suppliers. Needless to say the video distribution company went bust soon after, having filled numerous warehouses with stock that they couldn't dispatch to their customers.
The firm failed because of bad buying.
We used a couple of wholesalers for buying books. One of them was a small family firm on the South coast. Nothing was too much trouble. You could get in your car and pay them a visit, walk around the warehouse and choose some stock which was then scanned, an invoice/delivery note printed there and then, and the books packed into a box which you could either take away or have delivered the next day.
Our other supplier had a huge brand new state of the art warehouse, and a computer system that was unable to update fast enough to keep up with the business. Every book had a bar code, yet the warehouse lacked bar code readers to input the stocks, which had to be input manually. The stock levels were only updated each evening, so they never knew what stocks they had. The computer said one figure, but the reality was always different. We d place an order and their computer system was unable to distinguish whether the books were on the shelves ready to be picked, in the loading bay ready to be unpacked, or already picked and waiting to go to a customer. Once again we were faced with unacceptable shortages in our deliveries and we switched supplier. They went bust soon afterwards. They had no control over their stock.

Bad information equals bad buying.
Bad buying equals goodbye.

A few years ago I worked in a warehouse that supplied tenpin bowling equipment to the various bowling complexes in the UK. If you bowl regularly you will soon buy your own ball.
The technology of bowling balls is very complex.The normal ball you use when you go bowling for fun is a far cry from the highly complex balls that are used by the serious players. Everything from the shape of the core (the middle of the ball) to the type of material that covers the ball will have an effect on how it moves down the lane. Serious bowlers buy their ball from the bowling pro in the same way that the golfer buys from the golf shop at his course. When you buy a bowling ball it comes without holes. The pro will measure your hand and will cut the holes so that it fits you exactly. You can choose the weight of the ball. Years ago the serious players would use a heavy 16lb ball in order to get the swerve and power to score consistently high. As the technology developed and the players got older they found that they could get the same power and control with a 15lb ball. To all extents and purposes the 16lb ball was obsolete. My friend and work colleague was responsible for ordering the stocks of balls and although he knew as well as everyone else in the industry that 16lb balls were obsolete, he would still order "a few" each time.
Every time a new ball was introduced we would sell out of 14 and 15lb balls, leaving the 16lb balls unsold. Eventually we had a warehouse full of 16lb balls that no-one wanted. We ended up giving them away,although it might have been better to send them to landfill.
The company is no more. Bad buying contributed to their downfall.