Buy Big Sell Big?

As some high-end frame vendors' minimums reach for the sky, we dig in to find out how retailers are wading through a sea of product requirements to merchandise their luxury assortments appropriately

By Erinn Morgan

Are some luxury eyewear suppliers going to extremes with the minimum buy-ins they require for certain collections? With some minimums ranging from 50 frames all the way up to an astounding 100 pieces, it has become clear that high-end retailers have a lot of important assortment decisions to make.

"I called to inquire about {one luxury brand} and you still have to buy 100 pieces," says Tracy Henderson, owner of Eyewear Durango, a luxury optical shop in Southwestern Colorado. "That's the highest of the high."

In today's marketplace, it is not uncommon for a supplier to require a minimum buy-in of 25 pieces, even for moderately exclusive product. Many, however, range even higher. "The buy-ins are huge with the true, big luxury lines," says Craig Chasnov, owner of the three-store Eyetopian luxury optical chain in Florida, who notes that one of his collections requires a 75-piece minimum of frames that average $400 wholesale each. "That ties up a lot of money in inventory," he says. "And all the risk is really on me. The onus is on the one who writes the check."

It is the marriage of the inventory math and the risks involved that have many high-end retailers looking hard before they leap.

Nikki Harrison, practice manager of Advanced Vision Care, located in a suburb of Pittsburgh, experienced this recently with a 50-piece minimum collection. "It's a new line and the pieces are expensive and not that distinctive, so I couldn't really justify that. I think sometimes the high minimums just shoot suppliers in the foot."

Merchandising, turning, and reordering a number of lines that require high minimums can be a difficult endeavor. "Too often I see that people are overburdened by minimums of product that has been brought into their store," says Robert Marc, New York-based owner of the Robert Marc luxury optical chain and eyewear designer/distributor. "It really does no one well to overwhelm a dealer with too much product."

Still, minimums are an increasing problem in the high-end eyewear sector, despite a growing number of lines and suppliers in the market. As such, some retailers are eschewing any unnecessary collections that come attached with high buy-ins. "There is so much competition out there, why buy when it's not right for you?" asks Amy Block, optician and co-owner of Block & Zuckerman in West Orange, N.J.

Do Minimums Matter?

In the luxury arena, minimums have historically been de rigeur. "They have always been there for luxury eyewear," says Block. "Today, the bigger companies have gotten a bit bigger in what they require, but the smaller manufacturers will work with you a little bit."

Some retailers say that minimums can hinder both their own and the supplier's business, and everyone involved may miss out on an opportunity to grow their business. "If these companies would maybe lower their minimum you might be able to grow the market for that line in your office," says Harrison.

Why do minimums exist? "They are sort of ensuring that there's going to be a big representation of what they do," says Marc. But Marc notes that he does not set required minimums for his customers. Instead, he sits down with accounts and determines the right assortment for their particular shop. "We say, ‘Let's talk about your store. What is the size of your business? How many lines do you carry? What are the demographics of your customer?’" he says. "Sometimes, we even suggest they start out smaller because we want them to be successful and not be overwhelmed."

There is also a school of thought that accepts and even sees potential benefit in minimums. "I think suggested retail pricing and minimum orders are really important because otherwise the product loses its value in the customer's mind," says Henderson.

Into the Deep

Many luxury eyewear retailers say there is actually a method to managing the minimum madness. In fact, it is possible to skirt the issue of minimums altogether by choosing to assort with a narrow and deep philosophy—one that focuses on a stronger assortment of products from fewer brands.

"If people are having a problem with a minimum, then it's likely they are carrying too many collections and trying to be too many things to too many people," says Marc. "If you have a merchandising vision, then right away the number of brands you carry starts to come down."

Luxury shoppers typically focus on a few specific brands for their needs anyway, so a narrow and deep merchandising works well. These shoppers are not necessarily looking for the newest, trendiest brands. Instead, they are looking for what is new from the brands they know and trust.

"As a buyer, I have really never had more than 10 brands in the store, and I've never had a problem with that," says Marc. "I have found that the luxury consumer stays with a handful of brands their entire life."

At Eyetopian, Craig found that when his collections' inventory went down in-store, they did not sell as many frames. "When we put the inventory back up, it started selling again. A large representation helps people get excited about a collection."

Harrison also had a similar experience with a new brand that had required a 20-piece minimum. When she bumped that number up to 85 styles, the frames really started to move. "The sell-through has been really wonderful," she says.

Another benefit of a narrow and deep philosophy is that working with fewer vendors makes it much easier to manage your inventory. "When you have so many vendors, there is no time to see or talk to them all or take stock of what you have," says Marc. "It becomes confusing to you and your customer."

For those retailers who do not have the space to go deep into a collection, an excellent sales strategy to boost business is to hold periodic trunk shows in conjunction with the line's sales rep. At this event, customers can see a wider array of shapes and sizes available within the featured collection.

Another tip for navigating the sea of minimums is for retailers to negotiate terms that are workable for them on their opening order. This can include an appropriate minimum as well as a standard for returns. "For frames that are not selling, some high-end brands will swap out two frames for one or three frames for one," says Chasnov. "Try to get some type of terms set up on your opening order and then you've got leverage for the future."

In the end, minimums are simply a fact of doing business in the luxury eyewear arena. Retailers can work them to their own advantage by employing some smart merchandising strategies and working with suppliers to ensure a realistic scenario. "There definitely is a need to present a collection to everyone's advantage, and that's why minimums occur, but it is something that should be worked out in a way that benefits both the retailer and the supplier," says Marc.