Which products should we stop reordering?
Eleven products. Each has sold fewer than two units a month for a year, sits in stock for 214 days on average, and together they tie up €38,400 at cost. The three biggest:
Worked out from 14 months of sales, stock levels and purchase prices.
Draft email to three suppliers
Subject: Pausing reorders on three lines
Hello, we're pausing reorders on the Marble console 140, the Oak sideboard 200 and the Jute rug 160 × 230 while we clear current stock. Orders already placed aren't affected. We'll be in touch as soon as we're ready to order again.
How it was worked out
- Read 14 months of sales: 41,882 receipt lines across 3,003 products.
- Kept the products selling fewer than 24 a year that are still being reordered: 11.
- Averaged their days in stock from the stock ledger: 214.
- Valued what's on hand at purchase price: €38,400.
About €612,000 across both showrooms, 31% above November. Lounge seating and dining sets lead, and eight products are likely to sell out before Christmas at today's stock.
Forecast from three Decembers of sales, this year's trend and stock already on order.
Likely to sell out before Christmas
- Ceramic vase, sand6 Dec
- Travertine side table9 Dec
- Rattan pendant, natural12 Dec
- Bouclé lounge chair14 Dec
- Oak dining table, 22017 Dec
- Walnut sideboard, 18019 Dec
- Wool rug, 200 × 30020 Dec
- Linen sofa, three-seat21 Dec
Workshop 14, by some distance. Since July its deliveries have averaged nine days late, leaving an estimated €22,700 of sales waiting for stock.
From 212 deliveries since January, against the dates each supplier confirmed.
Draft email to Workshop 14
Subject: Delivery dates on our open orders
Hello, your last six deliveries arrived an average of nine days after the confirmed date. Two of our open orders are due next month. Could you confirm realistic dates for both by Friday, so we can plan around them?
Mostly in two places. Freight on large items is up 18% since August, and 14% of bouclé sales were discounted at the till. Together they cost about 3.1 points of margin this quarter.
From landed costs, till receipts and stock adjustments since 1 July.
Here's a first draft. October sales were €438,100, 6% up on last year, at a 57.8% gross margin. Stock is valued at €2.42 million and cash closed the month at €318,000.
It suggests three things to discuss: Workshop 14's delays, the tight week in November, and walnut outselling oak.
Board report, October
- Summary: sales, margin, stock and cash against plan.
- Showrooms: City up 8%, Riverside up 3%.
- Buying: walnut and travertine up, oak paused.
- Risks: Workshop 14 delays, November cash.
- Decisions needed: two, with the numbers for each.
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