Tuesday, October 25, 2016

Increasing Your Income: Vol. 2—Retail Mastery


    In the first volume of Increasing Your Income, we talked about methods and principles which can help you get better tips acting as immediate raised income. If you recall, the only downside to focusing specifically on increasing tips is that the process will eventual cap out—you can realistically expect to make 15%-20% on top of your median income, perhaps more or perhaps less, but expecting to double your income solely based on tips is rather unrealistic. However, as a barber, you do have the ability to double your income, or even potentially triple your income! Come on now, who doesn’t want to triple their income? If you cut hair full time and make $40,000 a year, imagine being able to make $120,000 instead!!! If you want to make this happen, pay extremely close to this secret knowledge: if you want to double your income, you need to focus on retail.

                  Some of you might already be dabbling in retail, or perhaps you have thought about it. Well, here at MD Barber Supply, we somewhat specialize in retail (no kidding, Tyler…), so I want to share with you some of the principles which we focus on and which I encourage shops to pursue. Even if you have tried retail in the past and thought it too difficult or not as lucrative as you would have liked, I highly suggest you take to heart the 6 principles which I am going to share with you—you might find that you attempted to tackle the retail market in a poor fashion and might be encouraged to try again. Actually, I am rather surprised with the number of shops I have visited where the owner or manager say they have tried retail in the past, but stopped because it wasn’t showing any fruit. Starting a retail side of the shop is not easy, and it takes a lot of time with added frustrations with your shop, suppliers, or customers, but I promise you this: when you establish a healthy retail program within your shop, your income will drastically increase. 

                  Unlike the 3 easy steps for increasing your tips, developing your retail stock and becoming a Retail Master requires quite a bit more effort outside of barbering hours, but once you have the stock established, retail will work for you. If this is your first attempt at starting a retail program, I encourage you to develop and follow these 5 principles: (1) Set goals, (2) know your product demographics, (3) pay your rent with retail  (4) pay yourself and invest in product responsibly, (5) develop business organization. These seem so self explanatory, but there are few things from each principle that I would like to touch on and encourage you with. First and foremost, MD Barber Supply currently has everything you need in order to kill your local retail industry. At the end of this article, I will offer some insight into products we have which you can immediately start making money with, so pay close attention!

                  The first retail principle I want to share with you is “Goal Setting.” There are very few things in life which can permeate into every aspect of our lives, and goal making is one of them. Think back to all the accomplishments which you pursued or achieved…what do they all have in common? More than likely they required you to set tangible and achievable goals which you pursued to their fullest extent. Retail is no different. If you want to double or triple your income by means of retail establishment and expansion, you need to understand that it will not happen overnight, therefore setting long term goals is important in keeping confident and ambitious. MD barber Supply has been committed to offering the best retail experience for barbers across the world for nearly a decade, and we are still setting and striving for the goals which we set, all the while developing more! This is why we are able to reveal new products every single month. Obviously this is going to look different for your neighborhood or community shop, but the principle remains the same—set realistic and tangible goals. Lets draw up some examples: suppose you are just starting the retail section in the shop. Sit down with the other barbers in the shop and develop a game plan for the next year, marking specific dates throughout the year which serve as goal deadlines. For example, let’s assume you want to make an extra $5,000 this next year—a realistic goal would be committing to move $450 in retail out of the door every month, which roughly equals a little more than $100 a week. Or perhaps you want to have 12 different retail items within the next 6 months: simply commit to adding 2 items every month. Seems easy enough, right? Well, just in case you haven’t noticed, time goes by quickly. You might have an idea, then before you know it, 2 years has just passed. That’s 2 years where you could have been making money on your idea! 

                  Goals relate directly with motivation. If you have wanted to start a retail section in your shop but have never gotten around to doing it, try setting an achievable goal! It doesn’t have to be some grand scheme either. If money is tight, consider adding a single product to your shop—maybe a pomade or aftershave line.  You don’t need to start off with 30 different products in all various shapes and sizes available. Set goals and build your stock over a timeframe that you and your crew deem achievable! Speaking of which, your team is an essential part of retail sales and has the ability to make or break the process. A while back I visited a shop where 2 barbers were renting space. The owner was not a barber and required the actual barbers to pay quite a bit in rent and product fees. The shop actually carried a decent amount of products in their retail section, but the barbers felt as though they had no reason to sell the product since they were not getting anything out of it. The owner was making them buy the product as a portion of their rent, but the barbers basically refused to sell the product because they had no return. Business ethics aside, very little product was being moved. On the other side of the spectrum, there was another shop I visited in the Greater Seattle area which required all the barbers in the shop to pitch in together for buying retail stock, but they all saw a return on their investment as they split the sales amongst themselves in equal fashion. Because they had a connection to the product, this particular shop moved a lot of retail! Get creative in your goal setting and don’t forget to consider your team.

                  The second principle I want to elaborate on is your product demographics. As you may have noticed, not all products in the market are intended for “everyone.” Some products are for women, some are for men, and some are even designed for a specific people group (i.e., Hispanic, African American, Caucasian, etc...). Different people like different things, so make sure you know your customer’s preferences and cultural background before ordering a whole stock of product. Of course, this requires an intimate understanding of your clientele as well as the general culture of your shop’s location. Scent is a wonderful example of this principle—some demographics love Bay Rum, while others absolutely hate it. Now here’s the difficult part: sometimes your customer’s preferences are much different than yours. If you like rich, vibrant scents, but your customers don’t, it would be a shame to have 30 bottles of Tobacco-Cedar aftershave on your shelves with no one buying it. On the other hand, let’s say that you particularly do not care for a tropical fragrance, but your clients can’t get enough of it—well, I think you should probably invest in carrying tropical scented products, regardless of how you “feel” about it. You are into making more money, right? Well, sometimes you have to set aside your personal preference in order to appeal to your customers. Either that, or move your shop to a place more reflective of your style and preferences!

                  Here’s something I learned from a salon in the Treasure Valley, Idaho: one of the first goals in retail should be covering the expense of your shop. Let’s say you are renting a space for $1,000 a month—you should aim to sell enough product in order to cover your rent, mortgage, chair space, etc…This allows you to directly pocket the cash made from cutting hair, which you can put directly back into building your product line. Over time, as your retail line expands, so too will your cash flow. Seems easy enough, right? Obviously this is tied into goal setting, but the principle is distinct in the fact that it should be one of the first goals which you set. Imagine being able to cover your shop bills simply by selling a few products every month! This opens so many more opportunities for investing than simply attempting to save a portion of your cuts. The hardest part about this is deciding which products to sell, which I will be getting into at the end of this article.

                  Here’s something which new retailers sometimes fail to do, and what I am going to encourage you extensively with—pay yourself responsibly. Usually, when someone gets into the retail portion of the barbering industry, they get a good bit of cash within the first couple weeks of selling. Sometimes its coincidence, other times its because the new retailer really pushed the product or ran a good sale. What you don’t want to do is take a huge chunk of this initial payout and “treat yo’ self.” Let’s say you sell $1,000 in product which you only invested $300 into leaves: this leaves you with $400 profit. Keep in mind that you have to restock this product, so while you may have recieved $700 from the initial investment, you have to reorder the product, which leaves you with $400. Don’t go and lease a new car with this cash. Don’t buy a T.V., a guitar, an Xbox One (even if Skyrim: Remastered is coming out), or a new pair of Jordan’s. Take that $400 and put it BACK into product. Check it out—if $300 made you $700, imagine what $700 is going to make you? Sell that product, and now you have more than $1,500 to work with. Sell through that, and now you have more than $3,000 to work with. Sell through that, and now you have more than $6,000 to work with. See where I’m going with this? Make your money work for you, not the other way around. This takes time and patience, but let’s be honest…by the time you are comfortable, Skyrim: Remastered is going to be on sale, therefore it will be cheaper that what you would have paid for it 6 months before!

                  I’m not saying that you should take 100% of what you sell and put it back into retail (even though that would be ideal, wouldn’t it?), but what I am saying is that you should pay yourself responsibly until you are able to confidently rely on the profits taken from retail. Let’s create a scenario to reflect this: So, your goal is to pay for your shop’s expenses with your new retail. You save up $500 and buy equal amount in product which you know your customers are going to buy. You triple your investment ($1,500) after 3 months of selling the product, so now you take $500 of it to pay for a portion of your shop’s expenses, then put $1,000 back into product. After another 2 months you have now sold through your products which allows you to pay for this month’s full expenses and order twice the product you could before. After another 2 months, you can now cover all of your expenses, restock your products, AND pay yourself $600 extra for the month. With proper investment and learned principles, this example can compound over and over again until you find yourself ready to open another shop in the next town over. Imagine having this kind of payout, but with two shops!?

Paying yourself and investing responsibly is a principle I learned from a wonderful program I took part of in my youth—World of Warcraft. For those of you who have experience with WoW, you will be familiar with D.o.T., or “Damage over Time.” Certain players found themselves able to do grotesque amounts of damage, but it was all done over a period of about 15-20 seconds. When compared to other classes and characters, anyone who invested in the long-term opportunities rather than the immediate and upfront attacks always did more damage or healing. The same principle stands for retailing: continue to invest in the products which you will see a greater return for over a longer period of time. If you do all of your damage upfront, or sell your products and spend the initial profit on immediate material things, you will miss the opportunity to maximize your income. Besides…why would you want to pay $400 a month for a new car (PLUS interest!) for the next 6 years when you can buy it outright with cash in 12 months? Pay yourself and invest responsibly, and remember—D.o.T., my friends…D.o.T.

Lastly, organization is extremely important. This is really simple and somewhat speaks for itself, but it also seems to be one of the biggest struggles for individuals just getting into retailing. If you want to increase your retailing, you need to be organized. Learn to use programs which keep track of sales, ordering, product info, etc…Quickbooks and Excel Spreadsheets are extremely valuable in this regard and will prove most useful as you grow your product lines. If you struggle with organization, find someone who can help show you what works for them, and perhaps you may be able to adopt some of their wisdom. If you are already an organizational genius, then this should be no problem for you, yet there is always room for improvement! Look into new programs or methods of data entry which makes the process more effective for effort, energy, and time. Trust me, being organized will make things so much easier for you when something goes wrong. Naturally, things do go wrong, so having an organized system allows for you to backtrack effectively, figuring out what went wrong and where, and then fix the issue!

One could spend their entire lives studying and figuring out methods to master retail and sales, but these 5 principles offer a solid foundation if you are just starting to sell product lines, or if you need a little encouragement in solidifying or reattempting retail. When you are able to master your shops retail lines, you will see your income increase drastically. Double, or even triple you income!
Click here for Wholesale Prices

Here is a list of things to help you get started in the big, wide world of barbering retail, all of which MD Barber Supply currently provides for retail and wholesale—
·       Hair Product: Chances are, since people are getting a haircut in your shop, they are also buying hair product. Why not have them buy their hair product from you instead of the Wal-Mart down the road? Here at MD Barber Supply, we recently released our brand new L-XIV Pomade in honor of King Louis the 14th (currently available for preorder, ships Dec. 1st), but we also have hair gel, wave builders & enhancers, and temporary hair dye/color. On top of that, we also carry shampoos and conditioners, as well as scalp treatment. Every one of these can be displayed in your shop and sold as premium products! And if you carry hair product, you might even consider carrying combs!
·       Shaving Instruments & Aftershave: People shave, and despite the current “beard” rage, the shaving industry is still going strong. I would wager you see more people every day without beards than with facial hair (unless you live in Portland, OR!). That being said, having retail on hand for shaving folk may prove extremely valuable. Here at MD Barber Supply, we carry multiple brands of Double Edge safety razor blades and disposable blades for the Shavette style straight razors. How many times a day do you hear someone say they would like to start shaving with a straight razor? What better way to learn than with an MD Dragon disposable blade straight razor, which YOU happen to have for sale at your shop, along with Royal Red 100-pack blades! You may consider having shaving brushes, shaving soaps and gels on your product rack as well, along with aftershave. We have three different types of aftershave: MD Topaz Elite, MD Captain Black Bay Rum, and MD Conquistador. Each aftershave comes in an 8oz. bottle, but can also be ordered in gallons. In the same field, we also carry something called “Alum Blocks,” a hard-rock mineral which the ancient Romans use to use as an “aftershave” a few thousand years ago! When wet, the block is used on the face where the alum disinfects the skin and imparts minerals which leave the skin healthy and hydrated. These Alum Blocks are wonderful conversation starters too, as it connects the user with an ancient practice—if it was good enough for Roman soldiers, it’s good enough for me!

I just offered 14 ideas for a retail product line which you can start selling today. And that’s only a fraction of what you can retail in your shop! For more information on ordering or ideas, feel free to call us here at MD Barber Supply and we will ensure your shop is well equipped, and you are prepared for Retail Mastery! 

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