Reevaluating moulding inve

A LTHOUGH mouldings have tralA.ditionallv offered dealers bie margins, what happens when you start spending more time dusting than replenishing certain bins? How do you know when and how much to cut back?

A retailer plagued with slow-moving mouldings usually didn't order too many mouldings-he ordered the wrong mouldings. "What happens historically is a dealer will take a line that sells somewhere else, thinking it sells everywhere. It doesn't," explains Art Ramey, executive vice president, Marley Mouldings, Marion, Va. "With mouldings, sometimes the turns aren't as high as with other products, but the profits are greater. So the answer is not to cut back on mouldings; they offer some of the highest profit margins in the store."

If that's true, the answer isn't scaling back, but rather backtracking. "I think dealers need to do a lot of research first," Ramey says. "They can look to their suppliers for help or they can do it on their own. They should find out what products are used by the builders and homeowners in their area. There are a range of core products that are indigenous to each area. They should take those in different profiles and make them the core 80Vo of their business. The other 207o should be specialty mouldings, cabinet trim parts. furniture trim parts, picture framing, exterior mouldings, such as cap mouldings and fascia items."

Profiles and species are key. Is yours a paint or a stain market? Paint markets allow you to mix species and offer more fingerjointed products. What income brackets are you trying to reach? If you're appealing to a high-end clientele, stock more expensive hardwood mouldings.

Story at a Glance

Slow-moving profiles: is your answer addition or subtraction? ... remerchandise. then gauge results.

Once you're stocking what your area should buy, you can gauge improvements in: x Stock to sales ratio

* GMROI (gross margin return on investment)

* Inventory turnover

* Average inventory levels

* Cost of carrying inventory

* Markdown rates

* Effective promotional and advertising results x Mark-up objectives

* Smooth receipt flows x "Full" fixtures and "empty" stockrooms

* Perpetual planning capabilities

For mouldings, says Ramey, "the worst case is four turns. Good is six turns. Any more than that and you're really burning the doors off."

Unproductive SKUs that aren't achieving the minimal four turns should be considered for replacement. "Keep things fresh by changing your product lines around in the specialty 20Vo of your business," Ramey says. "Try more items like plastic, MDF. This is an age where people are trying out more new products. Don't be afraid to carry non-wood mouldings.

Composite products are rapidly growing, especially in the window and door markets. In the next few years, we'll see the same major changes in the moulding industry. And it's not just because (wood substitute products) are cheap, but because of the benefits they offer: low maintenance, easy installation, prefinishing. Don't get caught behind the technology gap:'