NAMM University Co-Hosts Seminar for Northern California Retailers with Technical Sales Firm
NAMM, the International Music Products Association, today along with TroutFarm, a leading technical sales firm located in northern California, co-hosted a NAMM University seminar titled “Who Moved My Margin,” featuring Alan Friedman, CPA, a renowned music industry guru and frequent NAMM U presenter. The seminar was held at the Holiday Inn in Emeryville, Calif.
During his presentation, Friedman instructed the audience, made up of small and mid-sized music retailers, about solutions to common problems including cash flow, inventory management and employee compensation.
“In an era where most businesses are buying and stocking inventory ‘just in time,’ many music products retailers buy for ‘just in case,’” said Alan Friedman. “Inventory is the lifeblood of any music store—how you buy and manage your inventory will ultimately determine your success.”
Friedman explained the factors that contribute to over-buying inventory including having too many choices and the emotional attachment retailers feel to some music products. Friedman also discussed the nine things that make up the “true” cost of inventory, often overlooked by retailers when determining the return on inventory investment.
Friedman spoke about the value of participating in NAMM’s annual Cost of Doing Business Survey and how retailers can use it to better understand gross margin return on investment, a better measure of business performance than straight gross margin percentages.
“Alan’s real-world teaching style is great for our Members who want to do a better job matching inventory purchases to their market needs,” said Randy Beck, director of professional development, NAMM.
When buying inventory, Friedman recommends asking four questions:
Can I sell this product?
Will I make a profit?
How quickly can I sell it?
How fast will I have to pay for it?
“Everything else is just fluff,” said Friedman.
He also reviewed five case studies that demonstrated the value of turning over inventory quickly in order to increase capital, which can be used to purchase more products. Increasing “turns” is one key to running a profitable, growing retail business according to Friedman. Clothing retailers turn their inventory approximately four times per year as compared to the typical 1.9 times in the music products business.
TroutFarm, representing several MI brands including Audio Technica, Harmon Music Group and QSC Audio, contacted many of its local accounts and encouraged them to attend the seminar. This is the first time NAMM has experimented with this type of arrangement.
“Helping customers run their businesses better should be the goal of any true partner,” said John Hood, president, TroutFarm Technical Sales, Inc. “We’re proud to partner with NAMM to bring this valuable NAMM U seminar to the northern California market and hope to continue this effort in the future.”
Friedman concluded the seminar by answering the audience’s questions about employee compensation issues, 401(K) plans and increasing efficiency using barcoding technology.
The National Association of Music Merchants (NAMM) is the not-for-profit association with a mission to strengthen the $17 billion music products industry. NAMM is comprised of approximately 10,300 members located in 104 countries and regions. NAMM events and members fund The NAMM Foundation's efforts to promote the pleasures and benefits of music, and advance active participation in music making across the lifespan. For more information about NAMM, please visit www.namm.org, call 800.767.NAMM (6266) or follow the organization on Facebook, Instagram and Twitter.