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Sunday / June 23.
HomemibusinessTaking Stock Optimising Your Inventory Practices

Taking Stock Optimising Your Inventory Practices

Struggling to find a way to strike a balance between keeping your frames stock fresh and avoiding excess inventory? mivision went looking for tips on this crucial aspect of business practice and found there’s no one right way.

As an optical retailer, managing stock in optical frames is crucial to meeting customer demands, maximising sales, and maintaining profitability. A difficult feat when eyewear collections are ever evolving.

It seems there are as many ways to do this as there are practices. For some, the process is purely data-driven, and subject to strict rules. Others buy with particular clients in mind. Still others select stock based on what brings them joy.

Practice Management Software

Ken Rogers, founder of Eyebenefit, Australia’s second largest buying group, has been in the optical industry for over 50 years. As a dispenser and practice owner at Eyewear Plus in the Melbourne suburb of Preston, he said practice management software (PMS), such as Sunix or Optimate, was critical for data analysis, and therefore effective stock control.

He said loading stock promptly and correctly into the PMS is critical.

“When stock comes into the store, we’re not allowed to show it to anyone until it has been entered into the database. The advantage of using your point of sale, or PMS program, is that you can bring up what you have sold. That makes stock control so much easier – you can look and analyse what you sell. Analysing your data is one of the most important steps in your stock control.”

ProVision’s Merchandise Manager, Rob Boelen, agrees that a deep dive into your PMS provides a huge amount of information.

“Think about the demographics of your customer base – age, gender split, socioeconomic factors of your area. Is your customer conservative or looking for something different?

“If you are an established practice, running some reports from your PMS can help with this. From there, ensure you have the right variety of price points, frames for each age group, kids, low gap / budget / second pair range according to the needs of your clients,” Mr Boelen said.

“Consider the proportion of sunglasses you should stock. Are sunglass purchases seasonal (e.g., Victoria) or more constant (e.g., Queensland)?”

Malcolm Gin, from Eyes and Optics in the coastal Victorian town of Wonthaggi, said data analysis of his practice consistently shows activity in both the budget, lower cost ranges and higher end products while “traditionally, anything in the middle ground has been slow to move”.

“When stocking higher-end product we purchase with particular patients in mind. Often if a stunning frame arrives and we think it will be perfect for a patient, then it’s worth a call to let them know we have something special and individual for them. Even so, it’s great to have amazing frames on our shelves.”

George Reale, General Manager of Lifestyle Optical, said his Sydney city practice, which attracts a lot of wealthy international clients, is extraordinarily proactive and often buys to customer requests.

“Generally, customers let us know what brands they are after – we have good relationships with our suppliers, and we do get in different styles the customer might be after for them to have a look at before they purchase as well.

“We will expand a brand based on the number of customers buying that brand. We only keep one of each style and colour, but if it’s a good model, we might then decide to get additional colours.”

Your Rep as a Resource

It’s often said that the optical industry is built on relationships, and owner and co-founder of eyewear distributor Pro-Optics, Jacque Katsieris said strong relationships with suppliers were invaluable for practice owners when it comes to stock management.

“At the end of the day, what good sales reps should be doing is making sure your stock is current, fresh, not discontinued – make sure that stock is moving based on the demographic of the practice and what you need.

“It’s a partnership. It is definitely about helping each other grow our businesses; grow my business and grow their business. And it has to be like that. They shouldn’t be dealing with a rep or company that doesn’t feel that way,” Ms Katsieris said.

It’s a sentiment echoed by Mr Gin and Mr Rogers. Mr Gin said, “It’s all about the extension of the relationship. If you’re successful, they’re successful.”

“When you are choosing your stock, choose a supplier that you know will work with you,” Mr Rogers said.
Mr Gin said he drew on suppliers to provide both brand story and information to staff.

“I think it is super important to have a story behind why you chose stock. Patients love to hear the story behind their frames. Warranties, spare parts availability, materials, whether products are hypoallergenic, frame weight, and origin of manufacture all add to the value of their purchase.

“If someone wants something very special, we’ll make sure they have an appointment when the representatives are here, so they see the complete range, rather than just the selection we have. We also make sure that the more expensive frames have geographic exclusivity as the last thing the purchaser wants is to see someone else wearing exactly the same thing in their neighbourhood.”

Ms Katsieris said eyewear reps should “bend over backwards” to make sure practices have the right stock for their practice.

“Sometimes that will mean that the sales people will go in and it’s just an absolute freshen up and they may not come away with a sale but what they will do, hopefully, is have used their time in the practice to educate about the product, talk about what is happening with the brand, and talk about what else is happening in the business or…the collection.”

How Much?

To keep stock fresh, and differentiate themselves from competitors, many practices end up with more inventory than they need.

“The most successful stores I deal with don’t have a lot of stock – they’re not holding a lot of stock, so they haven’t got money tied up in inventory,” Eyebenefit’s Mr Rogers said.

“It’s so unnecessary these days because there are so many suppliers, and it is very quick to get the stock you need.”

“Ideally, you want to have your displays full, with minimal back-up stock to ensure you don’t end up with gaps,” ProVision’s Mr Boelen advised.

“It’s important to ensure the amount of display space is appropriate for the sales and turnover of the store – there’s no point having 1,000 frames on display tying up valuable dollars if the turnover doesn’t justify that amount of stock.

“Placing smaller orders more often is usually the best way to go – and working with a smaller number of frame/sunglass suppliers that each carry more brands helps make this more efficient,” Mr Boelen said.

“Try to take emotion out of buying decisions – it’s exciting to put in a fabulous new range…but if that results in yet another lot of frames being put away in a drawer out of sight and mind, is it the right time to put in that range?”
Taking the emotion out of buying is somewhat of an anathema for owner / dispenser Michelle Miles, of Optical Oasis in Mentone, who bases her buying strategy simply on what brings her joy.

“My job satisfaction comes from people being happy and me loving every day going to work and finding the best frames for the right head. If I’m not going to make as much money, but you’re going to look good, that’s all I care about.

“People think I’m nuts but if I see something that interests me, then I’ll buy it, because I know I will sell it,” she told mivision.

Keeping It Fresh

All of the practice owners mivision spoke to mentioned the importance of stock management policies.

Mr Boelen advised practices to regularly check aged stock and plan how to move through poor sellers. This could be through putting frames on sale, providing giveaway or second pair offers, or rotating stock with suppliers.

“But don’t just review stock on paper. Some pieces in a range stand out and attract customers, like that bright pink frame that everyone tries on… then purchases the black or tortoise colour as the pink is just a little too much. If you return that bright pink piece, the range looks dull and lifeless on the shelf.”

“The suppliers who look after us with, say, one to one rotation, we can take more chance with them than someone who is going to give a one in 10 rotation,” Mr Reale said.

“We have a lower risk if suppliers are looking after us as a retailer.”

While some distributors make it possible to rotate stock, Ms Katsieris said it is not something that practices should rely on. “In the end, stock rotation costs all parties money, so it is best to carefully consider your order and work closely with the representative to ensure you have the best stock for your practice,” she said.