Question for T-Satt

[Mississippi Pickers]

Hello T-Satt, hope you find this post, I love the way you meticulously keep up with your numbers and I have a question about your STR if you don’t mind answering.

As we ramp up our business I am wondering how consistent our STR will remain. We sell like 98% clothing and right now we are enjoying a 10% STR.

My question is, if you remember, as your business was growing from back when you started, do you remember how much your STR fluctuated on clothing? like was it dramatic or just a few notches + or – ?

If you don’t remember that’s ok, I was just curious since you have such a good understanding of your stores numbers. I was thinking as we grow larger that any stale inventory might influence the STR? If that is true how do you adjust for that or do you even have to?

[T-Satt]

Hey Tony.

Excellent question, and I will give you the data as I have it for our store. There has been a lot of talk on the forum about STR degradation as your store inventory rises. Lots of thoughts as to why, all of which are probably valid, but no proof for any single reason.

I think old inventory is definitely a part of that degradation. Some things are just a bad buy, and will sit in inventory and not sell. I think the long tail nature of some things are part of it too. Some things can sell quick, but some take a while, even in clothing (vintage, sport coats, etc.). Clothing also is seasonal, so sweaters decrease your STR in the summer, and short sleeves shirts and shorts decrease it in the winter.

Ok, so our STR history (full store)

2015 – 28%
2016 – 16%
2017 – 19%
2018 – 14%
2019 – 14%

I believe that 2016 was so low because we went to Panama for 4 weeks, no new listings, and that really killed our July and August STR (10% each). I still hold that new listings consistently are the way to go in that sense.

Now, as to clothing specifically, I only started tracking that separately a little over a year ago. For the first part of 2018, our STR on clothes was 17%. This year it is 15%. I think our pricing was too high in some categories this year which I believe we have corrected, but we have also started to more more into more long tail areas as well (sport coats, suits, etc.). The return is good, but they take a while to sell, and seem to sell more in the Fall/Winter.

What I do for that is when I forecast, I forecast a lower STR than the past year. Right now, I’m forecasting about a 3% lower STR than the past year to account for that. I hope to be better on the upside, but hope isn’t a strategy. This will then give me an idea on what our store will generate in the future on what should be the low side, and I plan sourcing, personal spending, etc. accordingly.

Hope that helps. If not, let me know some specific questions and I can try to help. You can hit me up directly at tsatterf@yahoo.com as well. If that doesn’t do it, I can give you my cell number and we can talk. There are a few others I have done that with as well.

[Mississippi Pickers]

Wow, that is a lot of good information and I really appreciate the time you took to reply. You have answered all my questions and given me some things to think about, like winter/summer off season clothing effects on STR. I am just amazed at how DIALED in you are on your business and that is what I am hoping to achieve at some point.

We are still in the early stages, just below 300 right now and we are maintaining a 10% STR average which isn’t as good as I would like but not horrible either. Thanks for offering your help, I will definitely have more questions as we progress so I will e-mail you when the time comes.

Thanks again !
Tony

[T-Satt]

Anytime Tony!

This is the area that I am trained in, so it comes naturally to me. I was a Cost Accountant for 20+ years, so tracking metrics on a business is second nature to me.

But basically, anyone can do it. The most important part is to have the data to start with. So I have data on our business by day, by week, by month, and by year since 2015. Having the data is the first part, and that is simply having the discipline (and desire) to jot into a spreadsheet the important metrics on your business.

The next part, understanding the data and making sense of it, that is a bit more work, but something I can help with.

Anytime you have questions, let me know.

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