I N T H E T R ENCHE S
Source Diversity
By Allen McBroom If you read websites or blogs written for journalists and newsroom denizens, the term “source diversity” is sort of a popular topic these days. In a nutshell, source diversity is the idea that, as one prepares a news story, having just one source for your information is not as good an idea as having multiple sources with different viewpoints. The idea is that multiple sources will produce a more balanced and reliable article or report. We’ll revisit the term “source diversity” in a bit and see if we can make that phrase work for us. At one time, product availability was almost a given in the MI world. Most products were made in America, and if a manufacturer ran low (or out) of a certain item, replenishing the supply was a matter of producing more and getting it back into the supply line. It was easy to have brand loyalty, and if a particular item was out of stock, it was usually temporary, and you could restock as soon as the wheels of production churned out more. That ready availability helped foster brand loyalty, and there was little reason to keep a list of alternate stock sources at hand. Today, living in an industry where a huge percentage of accessories, and even serialized products, are now made offshore (i.e., China, Indonesia, etc.), brand loyalty is much harder to maintain than it used to be. Production targets are often planned months in advance, and if a product sells more than anticipated, it may now be months before more product can be produced, shipped across the water and then trucked across the country. When buying product for our store these days, it’s not unusual to get an order confirmation showing that many products are “backordered” or simply “out of stock.” If you 48
are an MI retailer, you know the angst caused by calling the manufacturer or distributor and being told, “That’s out of stock, but we expect to have more in 90 days,” or hearing a much more dreaded phrase, “We’re out, and no restock date is available.” In other words, the manufacturer expects to have some later, but they don’t have any idea when “later” might be. If there is no predicted arrival date, you may as well expect to not see that product for months. This puts the MI retailer (you) in a tough spot. While you’d like to be loyal to your long-term manufacturers, you really can’t expect your customers to keep visiting a store that seems to be out of product on a regular basis. It’s way too easy to go online and buy the product from some warehouse that still has a few boxes of the item available, and you can’t risk eroding a customer’s store loyalty. It’s up to us to make sure we don’t lose our customers’ loyalty. Let’s go back to the journalism term “source diversity.” To prevent being out of stock in our stores, and risking a loss of customer loyalty, we need to keep certain items in stock. The list will change depending on the focus of your store, but let’s say mic stands are at the top of your list. You’ve got several styles of mic stands that have been good sellers for years, and you know if you’re out of stock on those stands, you’re losing money. The customer will buy what they need elsewhere, and customer loyalty may erode. (I picked mic stands as the item because I think every music store, regardless of instrument emphasis, probably carries mic stands.) There are couple of ways to approach having source diversity, but if your mic stand supplier has given you the “90 days out” response, you need mic stands, and you need them now. You can’t wait 90 days. Dig into the bag of propaganda you collected at your last NAMM Show, ask about alternate sources in the IMSO forums, and talk to some of your other existing suppliers and distributors. Either switch your source to a supplier who has a solid track record of always (or almost always) being in stock or divide your stock up among more than one supplier. Having a good working relationship with more than one supplier of the same type of product is critical these days for a store’s inventory health. If you’re thinking about diversifying (there’s that word again) your store products, make a small order with the new supply contender before making a big order. If you do your research now, you’ll be in a good position to transition your ordering should the need arise. When the new product arrives, go check it out personally. Pull it out of the packaging, look at it, feel it, get an idea of how it will seem to your customer, ask yourself if it feels solid or cheap. Ask yourself, “Would I feel confident buying this myself?” If the product passes that examination, hand it to a couple of your employees for their opinions. If it’s an affordable product, give one to one of your regular gigging customers and ask them to try it out and give you their opinions. (Want to create a loyal customer? Show a local player you value them and their opinion by asking him/her to field test a product for the store.) You may have to weed out a few brands before you find a winner, but that’s OK. Finding the right alternate must-have product is worth the extra trouble when you encounter availability crunch-time. Keep in mind not every product line needs, or can even have, an alternate source. If you have a unique or singular product, the brand may be inextricably bound to the product, and there is no acceptable alternative. In those cases, if that product sells well, maybe stock a bit deeper than you normally would to make sure you can cover an occasional out-of-stock scenario. But for products where the brand isn’t so important to the customer, do your due diligence to your store and plan some source diversity. This diversity could be your ace in the hole when your favorite source dries up and your stock count is low. Happy trails. APRIL 2019
