Stock In Trade

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Above-ground pool sales are a notoriously difficult-to-predict segment of the industry β€” the weather, especially, can be a curse or a blessing. And sometimes trends appear that no one would have thought possible β€” anyone for a $6 grande double-shot vanilla iced half-skim latte. Yet dealers all over the country have to try to predict both unforeseeable trends and the weather each year in order to properly order and stock inventory. Short of a crystal ball or Magic 8-Ball, how do they do it so as not to come up short β€” or be saddled with lots of extra pools. Pool dealers Mary Hampe, president, Paradise Pools, with t hree locations in South Carolina, Gary Burnett, vice president and co-owner of Burnett Pools, Cortland, Ohio, and Steve Ranzman, owner, Orange County Pools, Mohegan Lake, N.Y., weighed in on how they stay one step ahead of the weather and customer demand.

Different dealers have different ordering strategies so they don't end up with too much or too little stock at the end of the season. Lots of the pools that Burnett orders in his first big buy are already spoken for, which cuts out much of the guessing game that plagues aboveground dealers. Thereafter, Burnett orders throughout the season, while Ranzman prefers to do one big order and keep stock on hand, and Hampe does a little of both.

AQUA: HOW DO YOU KNOW WHAT AND WHEN TO ORDER?

Hampe: We do one big order, and that's called early buy, and then I don't do another big order. I just order as needed after that β€” that also helps to keep inventory down. We store our pools at an outside warehouse, and the outside warehouse takes care of loading up for the installers, and they keep up with our inventory. And everybody thinks that's awesome, and it's really not expensive, either. I would say I do the one big order and then probably half a dozen smaller orders.

Burnett: Well, we do periodic orders, and we will base the first couple of orders on what was sold the previous year, and then we will see what's selling that year. Sometimes when you're in the selling season, selling hundreds of pools, you get backed up a few weeks here and there, which means I can't put the pool in for a few weeks because I don't have it. We go ahead and order that pool on a purchase order, and we'll package the pools all together, and they all ship together, and usually the pools will be here by the time that we can do the pool anyway. Our customers can prepackage and order what they want. We also have pools in stock, too. We try to stock limited supplies, so they are readily available, most of the common sizes. You get a lot of sales during the winter. You get some layaways from the fall, like we've already got two laid away for next year, so I know I don't need to order those until next winter's buy, and they'll be one of the early birds on the list. I would say by the end of October, we'll have probably a list of maybe 10 pools, and by the end of February, we'll have a list of probably 30 pools already sold. So you kind of know what you're ordering in. So on our early buy, all those sold pools are ordered in, so there's never any worry about that.

Ranzman: We try to take an average of the last three to four years, and stay within that average. Unfortunately β€” or fortunately, depending on how you look at it β€” every year a different size takes off, and you can never predict that. You know, for instance, that a 24-foot round is the No. 1 selling pool, and will be, year after year. Has been for the last 20 seasons. But, that's predictable; you can handle that. You know that your 15-by-30 oval will be the No. 1 selling oval pool, because it has been for the past 20 years. But then there goes the norm, and now you start basically guessing, based on your historical numbers, and based on the average of the last three to four years. You just don't know when a size is going to run through the roof and double or triple what it did average-wise. And every year, every other year, something like that happens.

AQUA: DO YOU ORDER POOLS THROUGHOUT THE YEAR?

Ranzman: For pools, we order in the beginning of the year, in two shipments, in two releases. And we can occasionally order more pools if we need it. We'll order sometimes in October or November for delivery in January and delivery in May. We'll split that order up 60/40, because we don't have the room to take the whole year's worth, so we split it up on a 60/40 basis, taking 60 percent of the total order right away, and 40 percent later, which we can adjust. We have the ability and the relationships to lower some sizes and increase some other sizes.

AQUA: DO YOU ORDER SPECIFIC POOLS FOR SPECIFIC CUSTOMERS?

Ranzman: We do not take deposits from a customer and then order a pool. We have credit lines, and we stock. It's just something we do so we're on the spot. Somebody wants a pool, they can pick it up with in 24 to 48 hours, sometimes the same day. And if we're going to deliver, we set it up, and there's no wait. A bird in the hand β€” because factories run out of pools also, so this way, by going through the early buy, we get what we ordered, we get it on time and we know we have it.

AQUA: WHAT IF YOUR TREND PREDICTION IS WRONG?

Burnett: Early in the season, you look at the last year sales and what's most popular, so that's what you try to stock. If you're wrong, you still have the whole year to get rid of that first order, and then if things are changing and selling, you know the next year you may have sold a bunch of 24-foot and gray this year, but then the next year the beige might be more popular. If we guess wrong, we're just over by a couple of pools, because we do orders the rest of the year. We'll order pools probably eight times, so if you guess wrong the first time, you're not going to order it again the second time.

Ranzman: You scramble and order more! Then you go to your manufacturer, and you scramble, and you try to make do. And generally you do, because if you have good sources and good relations, they'll scramble and they'll help you, even when they're short, because whatever happens to us can generally happen to them.

Hampe: You really can't predict what people are going to buy. Even if 24foots were hot last year, just because you order that way, they'll want 28foots. What we do is we order pretty much the ones we know we're going to sell, that we have a history of a lot of numbers on, and then we try to just order on special pools β€” very high-end pools.

AQUA: WHAT ROLE DOES THE WEATHER PLAY?

Ranzman: We are a weather-oriented business. We can't control it, but you have to be prepared, and we are a stocking dealer. We don't take deposits and order pools; we buy trailerloads of pools. We keep them in a warehouse, and even if there's a problem, say, in the field, a shortage or damage, we can cover the customer right away by taking something out of the stock pools, and just reordering it from the factory. Remember, even though there are trends in weather for the most part, if you say your average is 218 pools in a particular store, and you're going to order 80 to 85 percent of that average, you just have to do it that way. This way, when the business is there, you have it. The worst thing to do is when a customer comes in and says, "I want a 21-foot so-and-so pool," and you don't have it. That's business you're never going to get. By having it, you're fine. When people buy a pool, they're not just buying it for the summ er of 2006. They're buying it for the next 10 to 15 years, no matter the weather.

AQUA: DO YOU HAVE BLOW-OUT SALES IF THE WEATHER WAS TERRIBLE?

Hampe: We do that. After 4th of July, we start running money off pools in stock, but I generally do carry overstock from year to year. I would say I probably carry an average of 10 pools over the winter.

Ranzman: Well, the way of the world is that since prices don't go down – the only thing that goes down is our checkbooks and savings accounts – prices continue to rise. So that inventory becomes gold if you have it, and of course you can run an end-of-year clearance. We'll run an end-of-year clearance and put some pools on layaway for early spring.

Though it's impossible to predict the future, each of these dealers has come up with a solution that works well for his or her particular business. Use some of these ideas in your business β€” and put away that Magic 8Ball for good.

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