Profile of Success — What’s Good For the Goose …

BACKGROUND: A trained CPA Liz Plotnick-Snay will soon enter her 12th holiday season with the Delaware, Ohio-based Gooseberry Patch catalog, a company started in 1984 by her next-door neighbors JoAnn Martin and Vickie Hutchins. The two working moms — JoAnn was a teacher, Vickie a flight attendant — shared a love of collecting antiques, gardening and country decorating. As their children grew, so did Gooseberry Patch and they eventually moved the business to a building large enough to house their kitchen and home décor products, gourmet foods, cookbooks, calendars and organizers.

The Gooseberry Patch catalog is filled with hand-illustrations of its products. It also includes recipes and tips to set it apart from other catalogs. Known for its cookbooks, the company has published more than 100 titles and sold more than 7 million books, calendars and organizers, Plotnick-Snay says, which bring significant brand recognition and higher gross margins.

CURRENT CHALLENGE: Inventory management: Gooseberry Patch is a highly seasonal business. Balancing cash flow is always a challenge, Plotnick-Snay notes. But she says vendors increasingly are unwilling to take the risk of stocking inventory. So the cataloger is required to place non-cancelable orders 90-120 days before the summer catalog mails on July 1st. Although Gooseberry Patch may be able to get an initial read of 30 days, the company may not have an opportunity to reorder in time for Christmas.

As recently as two or three years ago, the cataloger would directly import what executives felt they wanted to carry the risk on and would use major importing vendors in the marketplace to balance the inventory. Plotnick-Snay says they were able to place initial purchase orders based on early projections and then react to customer demand throughout the season to both reorder and cancel product previously ordered.

HOW SHE DEALT WITH THE CHALLENGE: Plotnick-Snay says the company is using several solutions to solve the inventory problem. The first is seeking out vendors who’ll continue to work with the cataloger under the old ordering system. What’s more, Gooseberry Patch has developed better systems of projections and uses more creative “close-out” options. She also elected to print catalogs one drop at a time. Although this is more costly, Plotnick-Snay says it’s easier to drop or substitute a product later in the season.