Star Sosa, owner
Have you reduced your inventory levels? What needs to happen before you will feel comfortable increasing your inventory levels?
We started reducing our inventory levels in October 2008. It was like someone slammed the door shut on traffic; the gallery was empty. My inventory levels were reduced naturally, because I didn’t order any last-minute merchandise in the fourth quarter. I felt that if I could hold on until June, we could survive the crisis. That proved to be true.
I also made some fundamental shifts in inventory price points. I worked hard to develop low- and mid-range price points while still having unique handmade jewelry, glass and gifts. It became very important to purchase items that would allow for strong margins.
What indicators do you need to see before you’ve decided that the economy is indeed improving?
The strongest and most consistent part of my business is custom jewelry design. Oddly enough, people seem happy to recycle, restyle or redesign their jewelry, spending significant amounts of money to do so.
Are you advertising consistently?
I did cut back my advertising some, but I stuck with the tried-and-true methods. My biggest and most successful marketing efforts include my e-newsletter, website, blogs and a very active approach to social media and gallery events.
The greatest thing about the Internet is that once you learn how to do these things, the primary investment is time and creativity. The cost remains very low, and they all interconnect, feed off and support each other, creating links that improve exposure on the web.
What are a few other ways you’re preparing for the rebound?
I’ve been keeping my overhead very low, running with a minimum of staff, and cutting costs whenever possible. This is just good business, and these are habits it would be wise to continue.
I’m past believing that there will be a dramatic rebound. I think this experience has permanently changed the way many of us approach consumption and debt. We need to prepare for the new “normal.”
What have you noticed in terms of consumer confidence?
I can’t necessarily say that I’ve seen a big uptick in consumer confidence.
I still have regulars who indulge in impulse buys, some of them large-ticket items. Those are the people I really go out of my way to take care of, because they are the ones who sustain me through thick and thin. It is crucial to identify your top 100 customers and pamper them like crazy. They are better advocates for you and your business than anything you could spend on advertising.
I have been very proactive about putting any sleepy or outdated inventory in the sale case and freeing up space and cash to invest in fresh new inventory.
You have to know which items go on your “never out” list, and stay on top of your reorders.