By Michael Burke
Journal Times | Posted: Sunday, July 20, 2008 12:00 am
RACINE - "Retailing in Tough Times" will be the topic when Downtown Racine Corp. brings in author and Madison small-business retailer Carol Schroeder for a speaking engagement.
Schroeder is co-owner of Orange Tree Imports in Madison and author of "Specialty Shop Retailing; Everything You Need to Know to Run Your Own Store." The book is now in its third edition.
She will speak at 5:30 p.m. July 30 at Uncorkt, 240 Main St., with refreshments provided by Uncorkt.
In her talk here, Schroeder will address topics such as e-mail marketing, surviving competition from Wal-Mart and smart ways to increase sales and boost profits.
The presentation is open to the public. The cost to attend is $10 for DRC members and $15 for nonmembers. Seating is limited and reservations are required by July 23. Call the DRC office at (262) 634-6002.
Here are some excerpts from a recent conversation with Schroeder, who has been running Orange Tree Imports with her husband, Dean, for 33 years.
Tell us about your own store.
It's a gift and gourmet store. At less than 3,000 square feet, it's either a big small store or a small big store. Our annual sales volume is $1.5 million.
How do you run your store?
We use a "participative democracy management approach" with our 30 employees. Instead of just having hourly employees who leave at the end of the day, everyone has a section of the store they're in charge of. That means they are involved in the displays, restocking, taking inventory and recommending merchandise purchases. In some cases they become the buyer for the department.
In your public speaking, what's something that all retailers might benefit from hearing?
My topic for this talk is "Retailing in Tough Times." All of us have experienced that at some point.
My message will be that it's possible to be profitable at a lower sales volume as well as a high volume. It's important to take good look at expenses to make sure you can control what is controllable and make sure every dollar invested in inventory used to best advantage.
What's an example of that?
With credit card processing fees, see if you can get a lower rate; negotiate one if you can. We recently investigated and found a lower rate. When we went back to the company already providing our card, they lowered the rate to keep our business.
Another example is using credit cards to pay for inventory. When you do that, it's very easy to have a balance carried over.
So use a line of credit at bank rather than credit card.
I like to say this: A savings may not seem like very much, but if you saw that money lying in a parking lot, you would bend over to pick it up?
What do you advise regarding inventory?
When you have inventory sitting on a shelf, some retailers do not realize the hidden costs. There's money tied up in it, it can lose value, and there's lost opportunity - you could have something fresher sitting there. Clothing can go out of fashion, paper goods can fade.
A lot of retailers have this thought: "I love this, so someone is going to love it soon."
My advice is to keep track of inventory by date of arrival. After some point that makes sense, take a 20-25 percent markdown instead of waiting long time and then marking it down to half price.
Should everyone sell online these days?
I think everyone needs a Web page - that's a given, even if it's basically a brochure.
Selling online has been the salvation of some bricks and mortar stores, but it's not without cost. You need people to fulfill orders, and handle shipping.
You must have a somewhat unusual product and something that ships really well; something with a really specific, smaller market does really well.
We don't actually sell online because it's boring.
And you have to be efficient to make money at it.