educational

Inventory A-B-Cs

Bob Lattimer
With the Internet making it easier for porn fans to get their fix online, success in the adult DVD retail arena depends to a great extent on having the right inventory mix. You have to carry lines and titles that will inspire customers to drive to your store rather than simply logging onto their favorite video-on-demand sites.

At the same time, you have limited funds available to invest in inventory. You cannot stock every adult DVD on the market. In order to generate the cash necessary to pay your bills and return a profit, you must achieve maximum sales from what you buy. Here are some tips to help you select products that keep cash flow positive:

Know Your Customers
Many retailers believe that carrying all of the "big name" studios is enough to keep customers coming back. That tack might have worked in the pre- VOD era, when customers had to settle for whatever they could find at their local sex shop. But in an era when customers can just as easily (or even more easily) download hours of genre-specific content on their PCs, retailers have to make sure they have exactly what customers are looking for. And the only way to know for sure is by asking them.

Talk to your customers. Ask who their favorite stars and directors are and if there are any studios you're not currently carrying that they would like to see on your shelves. More importantly, make sure you know what your customers' specific genre interests are. You may find that you have a loyal following of foot fetishists, or that your customers prefer homemade porn rather than slick Porn Valley productions, or that guys would like a better selection of feature-style movies they could watch with their wives and girlfriends.

Obviously, porn preference is a personal subject, and customers may not be comfortable talking about it, but you can always solicit feedback in other ways, such as a suggestion box or an email address where they can submit requests. The point is to carry the products they want most and avoid those they're least interested in. It requires a little extra work on your behalf, but in the end, you're customers will be happier, and you'll turn over inventory faster.

Track Sales and Stay on Top of Trends
There's no better indicator of what your customers want than what they're buying now. While this may seem like common sense, few retailers put the time they should into analyzing their sales and applying what they find to help improve turnover.

It's worth your while to analyze their buying patterns to identify trends, or invest in inventory tracking software that can do the work for you. A good inventory tracking system will tell you what merchandise is in stock, what is on order, when it will arrive and what you've sold. With such a system, you can plan purchases intelligently and quickly recognize the fast-moving items you need to reorder and the slow-moving items you should mark down or specially promote.

Point-of-sale software systems record each sale when it happens, so your inventory records are always up to date. Better still, you get much more information about the sale than you could gather with a manual system. By running reports based on this information, you can make better decisions about ordering and merchandising. Look for software that will let you:

· Analyze sales data, figure out how well all the items on your shelves sell and adjust purchasing levels accordingly.

· Maintain a sales history to help adjust your buying decisions for seasonal purchasing trends.

· Improve pricing accuracy to get the highest margins possible without hurting sales.

Some popular programs can be found at RighterTrack.com/ITSS.htm, Semicron.com/cre-features.html, Atrex.com/atrex.shtml, DenverResearch.com/POS/home.shtml, RetailBossPOS.com and QuickBooks.com.

You also should seek out similar statistical information from other retailers to help spot trends you may miss if you look only at your own store's numbers — especially if you aren't currently offering some of the hotter lines on the market.

Fill Niches
Your selection of merchandise is what will set you apart from other stores. Your success in retail depends partly on your ability to anticipate as-yet unmet needs for buyers in your area. It's a matter of product selection. It's one thing to stock every item in a category; it's quite another to selectively choose those products that will sell the most and sell the fastest to your particular clientele.

"There are no shortcuts or formulas," warns Jim O., a retailer in Thomasville, Ga. "In the beginning, we went to the manufacturers' reps and asked them what the most-popular items were and what was selling. Now we go to Internet forums to see what people are talking about. We look at the market and what others are doing. There's so much competition, so you have to stay alert."

This is particularly true in the adult arena, where the Internet has made it possible for fans to hone in on ultra-specific content categories. Customers today expect to find this specialty content in retail stores as well. You'll find that having a good sampling of tranny, interracial, lesbian, bondage, Asian, MILF and other genre-specific videos will help you sell more product overall because many customers will want a variety of DVDs, and die-hard fans of one category will want every DVD you stock in that genre.

You also should seek out some of the more obscure sub-genres, such as clown porn, camel toes, balloon parties and hairy girls. Online sales have shown that when you pinpoint target your product offerings, you'll get more ancillary sales and have a more loyal customer base who will be eager to see what's new on your shelves from month to month.

Remember, the faster and more often you turn over inventory — especially in the low-margin adult DVD arena — the more prosperous your business will be. Following the advice outlined here may require you to work a few extra hours each month, but the extra profits you realize may help you recoup that lost time by retiring a few years earlier.

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