I sometimes ruffle some feathers when I say Consultants should “ABSOLUTELY not carry inventory!! – It will kill your business!!”
Now, before you “stock holders” begin to yell, let me just explain why I feel this way, and also say that just like everything ELSE in this industry – there are exceptions to every rule.
If it works for you to carry stock – by all means, continue.
But if you are a Consultant who is contemplating whether or not to carry inventory, here are ten points to ponder.
1. You are already “in the hole” – a new Consultant has already spent money purchasing her Consultant kit (often upwards of $300)- why go into debt even MORE by ordering a bunch of inventory before she is MAKING any money?
Let’s say you spend $200 to get into your business, and another $200 in inventory.
The next day you receive an unexpected bill for $200! You now have to work twice as hard (in the very beginning!!) to be able to recoup your money from your business for your bill – adding much unnecessary stress on a new consultant. (and, if you ARENT able to make the money back, you begin your business by resenting the products that are sitting on your shelf that are preventing you from having the money for your bill!)
2. How do you know what to stock?
Sure, we know that you sell what you show, but does that mean you need to carry EVERYTHING you show? And how many of each?
Let’s say you show 25 items, and you want to carry 6 of each…. that is 150 items you must lug around to each party!!!
Plus chances are you will not always have enough for everyone, and you end up shipping the items to the customers anyway.
3. “Well, I just won’t order that then”
Let’s say you choose to carry 6 of your #1 top selling product.
When customer #7 comes in after seeing six of her friends walk out with it, she is going to be very disappointed that she has to wait on her item, and may actually say “well, I just wont order it then” – NOT good!
If everyone was waiting, she would have no problem waiting, and the sale would happen.
Sure, one can argue “well, it helps to get people in the ordering room faster by letting them know you have a ‘limited amount'” – true, but I do not believe someone should be penalized just because she didn’t claw her way to the front of the line.
Everyone waits – everyone orders.
4. Three months I carried stock…. three months I didn’t recruit one single person!
And that is the ONLY three month span I ever had where I didn’t recruit anyone.
The truth is – it LOOKS HARD!
I would carry in these huge Rubbermaid tubs of stuff (thankfully I had an SUV!) and then have to haul them back out.
When someone would order, it would take twice as long because after I tallied her order I would have to go through the tubs to put her order together. (and yes, I had it organized)
The #1 way to recruit is to make your business look simple and easy to do, so that “anyone” can be successful.
5. “If I am getting it here, why do I have to pay shipping?”
WE understand that you have already had to pay the shipping in order to get the stock in, but customers may not.
The uncomfortableness of having to explain that you have already paid the shipping as a “courtesy to have the items in stock” is not something a new consultant should have to face.
6. Party Plan Myth #1,294 – People buy more when they can take it home that night.
Where it is true that people may “shop” more and you may get more “impulse buys”, as a whole you can not say that people will buy more just because you have it there.
Because of #2 and #5 – this may actually take AWAY from your sales.
Plus, on the Customer Service side of this thought, why would you want someone to buy something just “because it is there” – you want them to buy what they love and will use, and not say later “Oh yes, I went to one of those parties and bought a bunch of stuff I have never used.”
This will NOT reflect well on you, or your business.
7. Return policies begin the day YOU order it from Corporate.
If you have a Return Policy with your company, that Policy Clock begins ticking the day it is ordered from Corporate.
This is especially important adult party plan companies and companies who sell appliances and other small machines.
Let’s say you order an item on January 1, but for whatever reason it does not sell until April 1. Your “Return Policy” has long expired, so if it does not work, you are S.O.L.
Even if you are going to be a bit shady with the return policy, you must still order ANOTHER one, wait for that to ship, return the defective item on that order number, and you are left with another item in your “stock” that took four months to sell the FIRST time!
8. One you start – it is hard to stop!
Once it “gets out” amongst your clients that you are carrying stock, it is hard to STOP!
The “instant gratification” gene kicks in and your clients will always want you to have stock (because of course, they do not understand any of this from the business point of view)
Even when you do try to sell off all that you have left in order to no longer carry stock (and to recoup the money you have already spent – see Reason #1!), you get people picking through the remains – resembling a bad Garage Sale experience.
9. When New Products are released – what will you stock?
In every Party Plan Company new products are released at least twice per year – and generally it is 8-15 NEW items.
You do not know by looking at them for sure what will sell and what will not – it isn’t like choosing from the “Top Ten” list of best sellers – these are NEW!
So you order them ….ALL!? And how many of each? And what happens when they do not sell? (I see visions of a Garage Sale again!)
10. What is the payment does not go through?
Your customer already has her order – and the check bounces, or the credit card does not clear.
Yes, you can take the check to the Sheriffs office to “Check Diversion” – but it could take MONTHS to recover that money from your customer. And, you may have charges from your bank, it may have caused other items to bounce, causing yet MORE charges from your bank – it is a domino effect that ends very badly.
Bottom line – you are going to be out the money for potentially a VERY long time.
These are my top ten reasons why I do not suggest any consultants to carry stock or inventory for their Party Plan Business.
Again, there are exceptions to every rule, and many women have been wildly successful carrying stock to their parties.
This post is not meant to be negative, but a very REALISTIC look at all of the aspects of what carrying stock can and will entail.
The bottom line to carrying stock is that it s a personal choice for every single consultant, and no one can give you any “advice” on what is best for you.
What I WILL tell you is that if you put enough VALUE on your products, your clients will be more than happy to wait for their order.
Make the best choice for you, and stick to it!