2. Merchandise Assortment
Receiving Goods and Inventory 2

3. Chapter Objectives Explain merchandise plans.
Describe the components of a merchandise plan.
Define merchandise life cycles.
Explain the receiving process.
Explain the concept of inventory control.
Describe inventory systems.
Explain stock turnover. 3

4. Merchandising Decisions
One of the most challenging tasks for a retailer is providing the right merchandise at the right prices—and at the right time. 4

5. Merchandising Decisions
Before a retailer buys any merchandise for a store, he or she must make decisions and plans to make the buying process more efficient.
A retailer must make decisions about what merchandise to carry and what prices to set. 5

6. The Merchandise Plan
Retailers use a merchandise plan to make intelligent decisions before they purchase merchandise for their stores.
merchandise plan a basic budgeting tool that assists the retailer or buyer in meeting departmental or classification goals 6

7. Merchandise Life Cycles
The four stages of the merchandise life cycle are:
merchandise life cycle customer-acceptance levels and buying levels of an item of merchandise
Introduction
Growth
Acceptance
Decline 7

8. Merchandise Assortment Planning Tools
Categorizing types of merchandise is one tool retailers use to make certain they have the merchandise to satisfy their customers’ needs.
Retailers also use stock lists to help plan their purchases. 8

9. Merchandise Assortment Planning Tools
staple merchandise merchandise that sells well over a long period of time
Types of merchandise are:
Staple merchandise
fashion merchandise merchandise that sells well for several seasons but not as long as staple merchandise
Fashion merchandise
Seasonal merchandise
seasonal merchandise merchandise that sells well at certain times of the year
Convenience merchandise
convenience merchandise merchandise that is purchased by customers without much planning or thought 9

10. Merchandise Assortment Planning Tools
Types of stock lists are:
basic stock list list used for items a store should always have in stock
Basic stock list
model stock list list used for fashion merchandise
Model stock list
Never-out list
never-out list list used for the most popular merchandise that should always be in stock 10

11. Cyber Fit
Offering merchandise that customers crave is important for clothing retailers. Customers may come to a store looking for a certain dress or style. Once they find what they’re looking
Operating an e-tail business on an electronic channel—the Web—can be costly, due to design, delivery, returns, and operating expenses.
Though Many larger dot-com companies crashed in the 1990’s, small stores like Harris Cyclery of West Newton, Massachusetts, actually increase sales using a basic Web site. Today, a third of Harris’s bicycle business rides in on the Web to get hard-to-find parts and personal service.
Describe an e-business’s home page to your class after viewing one through marketingseries.glencoe.com.
for, they head for the fitting room. Wait—where do you change clothes in an e-store? To overcome the lack of store-based fitting rooms, retailers such as Lands’ End use My Virtual Model®, an online simulation model for all body types, measurements, and sizes.
For more information on retailing,
go to marketingseries.glencoe.com. 11

12. What are the four components of a merchandise plan?1.
What are the four components of a merchandise plan?
Identify the four stages of the merchandise life cycle.
Name the three types of stock lists. 2.
Quick Check Answers
planned sales, planned stock, planned reductions, and planned purchases
introduction, growth, acceptance, and decline
basic stock lists, model stock lists, and never-out lists 3. 12

13. Receiving Merchandise
Inventory must be received, checked in, marked, and handled properly. 13

14. Mark With Selling Price
Receiving Merchandise
merchandise
Mark With Selling Price
merchandise
Receiving Area
merchandise
Move to Selling Area
merchandise
Check In 14

15. Receiving Merchandise
When retailers purchase merchandise, the purchase is recorded on a purchase order.
purchase order order form that lists the style numbers of the merchandise being purchased, the amount, the delivery date, and terms of purchase
The vendor sends an invoice to the retailer who has ordered the merchandise.
invoice a bill for merchandise 15

16. Receiving Merchandise
Types of checking in merchandise are:
Quantity check
Indirect check
Quality check 16

17. Receiving Merchandise
Merchandise must be marked with the selling price.
Many retailers use Universal Product Codes (UPC).
The last step in the receiving process is to move merchandise to the store’s selling area. 17

18. Inventory
Inventory includes merchandise in the selling area; merchandise that has been purchased and is stored for future selling; and merchandise waiting to be returned to the vendor.
inventory merchandise retailers have for sale 18

19. Inventory Control Systems
Retailers can use various methods of inventory control.
inventory control managing inventory levels to ensure enough merchandise to meet sales goals without having too much inventory on hand 19

20. Inventory Control Systems
Inventory control systems include:
stock turnover the number of times the average inventory is sold during a time period, usually a year
Physical inventory system
Perpetual inventory system
Stock turnover 20

21. Using Inventory Methods
Receiving and controlling merchandise properly ensures that the right merchandise and quantities are in stock.
Retailers can reach sales goals by using tools like inventory control systems and merchandise handling. 21

22. What are the four steps in the merchandise receiving process?1.
What are the four steps in the merchandise receiving process?
What are the two types of inventory control methods?
Why is stock turnover important? 2.
Quick Check Answers
Receive the merchandise; check the merchandise for correct quantity and appropriate quality; mark prices on merchandise, move the merchandise to the selling area.
Physical inventory system and perpetual inventory system
Stock-turnover rates tell the retailer if his or her merchandise is selling at a reasonable rate, and it is a tool for comparing one’s business with a competitor’s business. 3. 22

23. Checking Concepts 1. Define merchandise plan. 2.
Merchandise life cycle refers to the customer acceptance and buying levels of an item of merchandise. There are four stages—introduction, growth, general acceptance, and decline. 2.
A basic stock list is used for items that a store should always have in stock. A model stock list is used for fashion merchandise. A never-out list is used for the most popular merchandise. 4.
staple, fashion, seasonal, convenience 3.
The merchandise plan is a basic budgeting tool that assists the retailer or buyer in meeting departmental or classification goals. 1. 2.
Explain the merchandise life cycle.
Name the four types of merchandise. 3.
Checking Concepts Answers
The merchandise plan is a basic budgeting tool that assists the retailer or buyer in meeting departmental or classification goals.
Merchandise life cycle refers to the customer acceptance and buying levels of an item of merchandise. There are four stages--introduction, growth, general acceptance, and decline.
staple, fashion, seasonal, and convenience
A basic stock list is used for items that a store should always have in stock. A model stock list is used for fashion merchandise. A never-out list is used for the most popular merchandise. 4.
Compare the three types of stock lists.
continued 23

24. Checking Concepts 5. Explain the merchandise receiving process.
It is managing inventory levels to assure enough merchandise to meet sales goals without having too much inventory on hand. 6.
Physical inventory systems physically count the merchandise in the inventory. Perpetual inventory means keeping daily track of merchandise that is received and merchandise that is sold. 7.
Most retail businesses have a place set aside to receive and check in new merchandise. This includes comparing the purchase order to the invoice. The merchandise is then marked with its selling price and moved to the area of the store where it will be sold. 5.
Define inventory control. 6.
Describe the two types of inventory control systems. 7.
Checking Concepts Answers
Most retail businesses have a place set aside to receive and check in new merchandise. This includes comparing the purchase order to the invoice. The merchandise is then marked with its selling price and moved to the area of the store where it will be sold.
It is managing inventory levels to assure enough merchandise to meet sales goals without having too much inventory on hand.
Physical inventory systems physically count the merchandise in the inventory. Perpetual inventory means keeping daily track of merchandise that is received and merchandise that is sold.
continued 24

25. Checking Concepts Critical Thinking 8.
A high stock-turnover rate means that the stock is selling quickly. However, an excessively high stock- turnover rate can mean that there is not enough merchandise available to meet the planned sales goals or that certain items of merchandise are out of stock and that back orders of merchandise will result. 8. 8.
Explain why retailers want a high stock-turnover rate that is not too high.
Checking Concepts Answers
A high stock-turnover rate means that the stock is selling quickly. However, an excessively high stock-turnover rate can mean that there is not enough merchandise available to meet the planned sales goals or that certain items of merchandise are out of stock and that back orders of merchandise will result. 25

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