Uncommon Sense

Bill McCurry

He claims he’s not a genius—it’s just common sense. I’ll tell you Mike Berns (Berns Garden Center, Middletown, Ohio) has more common sense than most retailers I know. Mike boils things down to very simple issues.

It was about 16 years ago when Mike first told me all retailers have to take markdowns when things don’t sell. “I like taking mark-ups. I meet every delivery, from outside vendors or our own growing range. When the product looks absolutely spectacular, I’ll mark it up higher than I had originally planned. Margin is where you make it.”

Back then, Mike had common sense ideas such as:

• Roses weren’t an impulse item. Rose buyers had decided before they left their home they were going to buy roses. So the roses went to the back of the lot while higher value, more impulsive purchases went up front.

• The cost of maintaining birdseed and other vermin attractors outweighed the margin generated. Mike used that space for higher margin, less labor-intensive products.

• Mike once sold his Super Bloomers at “4 fer $20.” He abruptly changed it to “4 fer $25.” Some employees wailed that customers would balk. Unit sales exactly matched the year before—with a significant profit boost.

This month, I reached out to Mike for an updated version of his common sense. I learned a lot.

He’s intensified his “look at every shipment for maximum resale pricing.” He avoids setting a price for the season. “Sure it’s more work, but that’s what you have to do. You can adjust pricing on at least two-thirds of your inventory and nobody notices or cares, but it makes a huge difference to you. If it’s not a highly visible item, increase the price if you’re selling out too fast.” By tagging everything with a bar code, instead of price, he can adjust pricing to market conditions.

“Bread and Butter” items—things every gardener needs and every garden center must sell—have to be market competitive. Mike prefers to sell larger sizes of product so his slightly higher price screams “more for your money!” He also advocates special pricing in groups or bundles.

Raising the price on his “4 fer $XX” more than a decade ago taught him a valuable lesson. Berns has had fundraisers and sold charities $20 gift cards for $16. Last year, they became $25 cards for $20. Mike pitched it to the charities as “same amount of work and you make 25% more money.” The number of cards sold was virtually the same and Berns generated 25% more money, too.

Mike tried very hard to do a “Buy 4, Get 1 Free” program. He couldn’t get his POS system to accommodate it. Customers wanted two of one kind and two of another at a different price. The lines at the registers were killing him. Today it’s “Buy 6+ perennials—get 20% off the whole lot.” If one plant is a 1-gal. hosta and the rest are quart-size perennials, they all get 20% off—if at least six perennials are purchased. It’s customer-friendly, easy on the POS —and it’s more dollars and more margin than the old “Buy 4, Get 1 Free” that was effectively 25% off. The result is higher average cart volume and margins. It’s just common sense.

Every variety is priced differently. “They don’t grow the same, so why price them the same?” Mike asks.

Mike’s always thinking, always experimenting. Fewer and fewer customers pay by cash. It’s more burdensome to deal with. What if he took his six cashier lines and converted four to plastic and checks only? It reduced cash handling by two-thirds. “When things change to the point the old ‘normal’ is abnormal, we have to change with it. It’s just common sense.” GP

Bill would love to hear from you with questions, comments or ideas for future columns. Please contact him at wmccurry@mccurryassoc.com or (609) 688-1169.