PERSPECTIVES

From The Co-Founders

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Tips, Tactics & Strategic Insights and Commentary
from The ROI Co-Founders, Pat Johnson and Dick Outcalt
Outcalt & Johnson: Retail Strategists LLC; Retail Turnaround Experts

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Consider The Three Little Pigs

One little pig built his store out of straw.

He believed that the best way to survive in retail was to focus on top line growth. And lots of inventory.

But…the winds of competition blew his store away.

The second little pig built his store out of sticks.

He believed that the way to prosper was to focus on high initial mark-up, skimping on operating expenses.

So…the winds of competition blew his store away too.

Meanwhile, the third little pig built her store out of brick!

She decided the best approach was to manage the inventory more expertly than her competition. “Earn ‘n turn!” was her motto.

The winds of competition could not blow her store away!! So she “brought home the bacon!”

Retailing is a high stakes balancing act between merchandise and cash.

  • It’s a delicate balance to achieve: commit money early to large quantities of merchandise, and possibly end up with too much. 
  • Or, commit less up front, saving cash for later, and run the risk of not being able to get the goods when you need them.

And today, given the imposition of tariffs and the ensuing trade war, the degree of difficulty of achieving that balance has been heightened.

To better withstand the ever-changing winds of the economy, be like that third little pig; the one with the store built of bricks and her “Earn ‘n turn!” motto.

Use GMROI and focus on improving the "return on investment" of your largest investment, your inventory.

Find out how in GMROI: The #1 Measure Of Inventory Productivity in The ROI's Library For Owners.



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