It’s the end of April and I haven’t posted aside from getting the blog functional. Nothing on Psychology of the Deal this month, I’m too tired to be philosophical or insightful.
It’s been a busy month. On March 12 we opened a clearance warehouse in Bexley on a short term lease to clear excess inventory. The building has been sold and settlement is due in a week. We will move out on Monday.
Financially it has been good, not great. We covered overheads, and made a profit for the trading period. We learned about retail systems – warranty claims procedures, goods return policies, dealing with difficult customers. We learned a heap about pricing – we actually increased prices because people didn’t believe we were merely clearing out excess inventory. The next warehouse clearance will have even higher prices. They are still way below original cost but it turns out you can make something too cheap.
One of the strangest things was the pathetic results from our local paper advertising. We didn’t get that right at all. Next location I’ll focus on and fix that. We got better results from leaflet drops, which are normally marginal for us.
The other benefit is Bexley got our wholesale business going again. Our main warehouse is at Ingleburn, 50kms from Sydney CBD. It’s central enough for many, but the end of the earth for some. So we managed to get some customers to go to Bexley (12 kms from the CBD). So another win from the temporary location.
All unsold stock is going to an auction house without reserve. They’ll clear it out of their rooms in two weeks. They’re sending a team of guys to pack and move it out on Monday. The auction prices will be tiny, but I’ve wanted to test auctions for a while. It will end up being about 14 pallets worth of stock, a big enough test without hurting us if it doesn’t work.