Tue Sep 13 20115-ways to get rid of unwanted pro shop stock
As we now start to head into longer operating hours due to extended daylight, more players (especially the higher-spending corporate golf players) will soon be out on our courses. Now is the opportune time to clean your shop and get rid of old stock that has been around for more than 120 days and free up some much-needed cash.
It is very important to have a planned exiting strategy for all stock in your inventory because product that is 120 days or older will get shop-worn, go out of fashion and will actually hurt your operational cash flow. By imply following the basic soft goods retail rule i.e. If you purchase 10 shirts for $10 each (a total investment of $100) and then mark up each shirt by 100%, you are selling each shirt for $20. You only need to sell 5 shirts (half of original stock) to recoup the original $100 investment. Selling the remaining 5 shirts will now all be profit, no matter what price you sell them for, unless you keep them in stock for too long. Wouldn't you prefer to buy fresh new stock with the cash that was tied up in your tired old stock?
So to keep stock regularly turning over, discount the remaining shirts by 25% after 30 days; then by 50% (or Buy one, get one free), after 60 days; followed by 75% after 90 days. Finally, get rid of the remaining shirts however you can after 120 days (see your options below).
If your clients are primarily members, this turnover of stock is extremely important to keep regular revenues generating. If your client base is more transient, then you can stretch out the discounting time intervals and product ranges to suit the seasonality of your specific market.
Old stock is actually losing you money since you have invested hard-earned cash into your current inventory and this stock needs to give you the appropriate financial return in the appropriate timeframe to be a worthwhile investment.
Otherwise you might as well just put the money in the bank and gain interest.
Additional ways to get rid of old stock:
1) Value add the stock as prizes for a corporate golf event as a 'thank you' for holding the event at your facility,
2) Donate to a charity i.e. Salvation Army and claim the tax write off (ask your accountant for advice),
3) Use for employee uniforms,
4) Use as raffle prize in member competition,
5) Give to junior players at your club for a team shirt or competition prize.
The ultimate goal is to keep your cash-flow 'flowing', to turn your stock on a regular basis, and to keep the shop looking fresh, which in turn will have more regular customers coming in to buy your product again.
Written by Mike Orloff, Golf Operation and Marketing Specialist- Golf Industry Central
Contact Mike at morloff@golfindustrycentral.com.au for a free consultation.
© Copyright Golf Industry Central September 2008
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Multi-course operators like ClubCorp and American Golf have access to a pool of shared knowledge and expertise. This results in cost-effective policies and procedures that can make all the difference to an individual club's success. Now Mike is offering the experience, knowledge and tools he has gathered over almost two decades in the USA and Australia to stand-alone clubs throughout Australia, New Zealand and South-East Asia. The programs and systems Mike helped develop for Australian golf facilities over the past several years have resulted in positive outcomes for properties he managed including: Lakelands Golf Club, Robina Woods and The Colonial on the Gold Coast; North Lakes in Brisbane; Horizons Golf Resort on the NSW Central Coast; and Club Pelican on the Sunshine Coast. Currently Mike lectures for the PGA International Golf Institute and writes articles on golf operations and other industry topics for Inside Golf, Golf Inc, Asian Golf Business, PGA Magazine and various other publications around the world. (Click to see Mike’s Resume) Contact Mike or (+61) 415 682 259 Articles by Mike Orloff
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Mike Orloff is an Operations and Marketing Specialist with current US and Australian PGA Membership status. He has 20 years of experience with two of the biggest international golf management companies - To read the new Golf Industry Central online magazine look below and click on it to enjoy it in full size.
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