TOB_Magazine

[ 80 ] TOBACCO BUSINESS [ MAY / JUNE | 18 ] Inventory Management Continued we backed off to buying two boxes of the sizes we think we can sell to begin with. If we bring in a new cigar, then we start with a very light order and watch it closely.” While Hutson says that he’s pickier about what brands to bring into Just for Him, he still strongly believes in the “one for show and one to go” philosophy. “Getting stuck with unwanted cigars has been a big problem for tobacconists everywhere, especially in recent years with the plethora and popularity of boutiques, limited editions and seasonal editions,” Hutson explains. “I think you’re doing yourself a disservice if you don’t [buy one to go and one to show] because the customer wants it right now. I know from experience that if we don’t have it, the customer will find it elsewhere.” Running the Numbers POS systems and inventory tracking programs have helped retailers in all industries keep better track of the products they sell, and they can help tobacconists as well. Many of these programs can also keep tabs on how a particular product has performed over a period of time—a useful consideration when trying to determine what and how many cigars to buy. But while these programs can be very helpful, many tobacconists have been reluctant about bringing them into their stores. “One of my favorite things about being a tobacconist is spending time tinkering in my humidor,” says Don Kane, who co-owns Lake Country Cigars in Delafield, Wisconsin, with his wife Mary Lynn and does not have a POS system. “I’m in there every day, restocking and rearranging shelves, so I have a pretty good idea of what I have, what I need and what I should get rid of. I’m comfortable doing it without a POS system to help me.” On the other hand, Koebel has had a POS system at all of his Hava- na Connections stores for the past 17 years. Using Microsoft’s Retail Management Systems program, he can track real-time sales at any of his locations and generate monthly reports that tell him what’s selling and what is gathering dust. The system requires some upfront work— Havana Connections adds bar codes to every cigar wrapped in cello- phane and generates its own stickers containing a unique code for cigars without cellophane to help them track sales. “If we don’t sell a single cigar in 90 days, we pull it off the shelf and get it out of the store some way,” Koebel says. “We look at it by individual SKU and by individual store—that’s how deeply we get into our num- bers. And we run those reports every 30 days.” Hutson uses Lightspeed as his POS system and likes that his data is saved on the cloud so that if one of the computers at his store crashes, he never loses the information. Having the cloud-based system also allows him to use an iPad or a cellphone to check incoming inventory without devoting one of his computer registers to the task. And Lightspeed eas- ily allows retailers to set up reports to let them monitor their sales and inventory numbers. “We run reports at least monthly,” Hutson says. “Sometimes we’re curious how a particular month is going or how we’re doing on a holiday, and then we’ll run reports. It’s also useful for making purchasing decisions so that we can see the amount of business we’ve done with a company, and we can see if it’s increasing or decreasing. It helps us to make more efficient ordering decisions. It also tells us what is underperforming and might need phased out.” Jessica and Christian Hutson, owners of Just For Him in Springfield, Missouri Kicking the Dogs to the Curb What do you do with your clunker cigars? Do you leave slacking inventory on the shelves, hoping customers will rediscover their one-time favorites? Or do you admit defeat and devise some way to get rid of those boxes of forgotten cigars? If you choose to flush those old, underperforming cigars out of your store, how can you best minimize your losses? “We do several things and change it up to keep it fresh,” Koebel says. “We used to do a bargain bin where you could buy one cigar for $6, three cigars for $5 apiece and 10 cigars for $4 apiece. At some point, we had a lot of cigars sitting in those bargain bins. We thought about that and adapted what we do so that we protect the brand that we’re discounting but also protect our bottom line.” Offering cigars at a discount or creating sample packs is one way to rid yourself of dead inventory. Featuring those cigars at an event is another way to either reignite interest in those once-loved cigars or provide incen- tives for customers to take them off your hands. “We have a pretty comprehensive system of identifying our slow-sellers and trying to pump up their sales,” says Kane. “We use our newsletter and social media platforms to let customers know about new cigars or inform them about special deals we’ll feature in the coming month. We also have a lot of events at our store. Those are a good way to reduce your inventory of slow-moving cigars.” Events don’t necessarily need to be held in your store, either. Koebel has a mobile humidor, the MH2, which he uses to sell cigars at local music festivals, art shows and other similar events. Capable of holding nearly 80 boxes, the mobile humidor is loaded with some of Koebel’s best-sellers and a few of his slowest sellers—perhaps the occasional or celebration cigar smoker will enjoy the cigar that his regular customers have ignored. Giving for Good Riddance Making more disciplined purchases informed by regular reports gener- ated by your POS system ought to make getting stuck with unwanted inventory a less frequent hassle for tobacconists. On those occasions when—for whatever reason—a cigar’s sales die, there are a number of ways to eliminate that dead inventory. On the even rarer occasion when none of these answers work, the tobacconist is left with one fail-proof solution, insists Koebel. “When all else fails, light it up!” TB