There are plenty of levers that dealers control

By Gordon Hecht, YSN Contributor

When it comes to inflation, it’s a Back to the Future trip.

Back during my college days, common accessories to young women’s attire included a Class of ’74 gold ring and a “W.I.N.” lapel button. Fashions have changed but today, just like in mid-1970s, prices are flying up at about 10 percent every six months.

The W.I.N. button was the centerpiece of President Gerald Ford’s campaign to “Whip Inflation Now.” The world was a simpler place, but even then fancy buttons and cutesy slogans could not stop the pain that price inflation causes. It could not be stopped by hoping, cursing or inaction.

Rising prices land up somewhere between our circle of concern (worrisome things that we can’t control) and our circle of influence (worrisome things on which we can act). We can’t control the price of sweet Texas crude or Minnesota winter wheat, but we can take actions to control costs in our businesses.

It doesn’t take a crystal ball to get a read on prices. If you had to wager on the effects of inflation this summer, you’d be wise to take the first option on an over/under bet. In fact, your sales team probably closed a few deals by telling shoppers about an impending manufacturer’s price hike.

When it comes to operating your business, you are a shopper too. Now is a great time to double or triple your normal stock order. As we learned at my alma mater, Sagebrush State, buy low and sell high is a good way to make money. Later this summer you’ll be winning the retail war by having that lower cost inventory. (If you are short on storage space, ask about buy now and ship later to lock in lower costs.)

Your employees are affected by higher prices too. This summer the cost of living is expected to go up $2 a twelve pack. While it’s difficult to hand out raises, you can provide the opportunity for them to earn extra money.  It’s a triple win when you incentivize higher price/higher margin merchandise. Adding in an extra 1 percent commish or flat-rate bonus helps your sales team earn a little more, maximizes your operational costs, raises your average sale, and helps your shoppers enjoy premium product luxury.

On the operational side, rewarding your driver team with spiffs or bonuses for difficult or cumbersome deliveries is the difference between drudgery and delight. Properly trained, they will bring a remarkable experience to the shopper and help you forego post-delivery service issues.

The most visible effect of inflation is energy prices.  You’ll see it posted at every gas station. You’ll want to squeeze every mile out of a gallon of petrol. Simple things like checking truck tire pressure and good vehicle maintenance are a start.  Go a step further by efficiently routing deliveries, especially out of town stops, to avoid unnecessary mileage.

At the store level, inching up the store temperature a degree (from 72 to 73, for instance) won’t affect comfort but will lower your bill. Also check the timer on your outdoor signs — no need to have them on past 10 if you close at 9.

Fast-rising prices is not a forever thing, but we are living with it now.  Plan and execute today and you can make inflation work for you and not against you.

Gordon Hecht is a business growth and development consultant to the retail home furnishings industry and a regular contributor to YourSource. You can reach him at Gordon.Hecht@aol.com.