How to Get Into a Merchandising Mindset


You may have heard of a sales mindset, but what exactly is a merchandising mindset you may ask? 

A merchandising mindset is changing the way you think about your product or collection and thinking outside of the box of what’s really going to sell. 

It can be quite easy to fall into the trap that many merchandisers and buyers can make, which is personal preference.  If you personally like something, it doesn’t necessarily mean that your customer will want to buy it. 

The biggest mistake here is that you may not even fully know who your actual customer is yet. Your target market may be completely different than who is actually buying your product. 

The key to remember here is that you must find balance in what you’re offering both your target audience and what is actually selling. 

For example, let’s say that you sell denim.  

Just because flares are suddenly beginning to trend again, doesn’t mean that you should offer three new flare styles to your customer if they are still only buying skinny jeans.  Of course, you want to be ahead of the curve and always offer what’s on trend at the moment, but you don’t want to take away from what is working. 

If selling skinny jeans are the bread and butter of your business, why not focus on selling different styles of skinny jeans, i.e. different colors, washes, or distressed options.  

Rather than jumping into a completely different silhouette, you have to ease your way into a new style in order to test the market. 

If not you could risk wasting a lot of time and money, or worse, alienating your customer and confusing them. 

Here are the three steps you should take to ensure you are always putting yourself into a merchandising mindset:


STEP 1: Put yourself in your customer’s shoes. 

The biggest mistake any fashion buyer and merchandiser can make is to choose things based on their own personal preference.  

In most start-up cases, you may be the designer and merchandiser. The issue with this combination is that designers can often get caught up in what they prefer or what they are inspired by. 

You need to remember you’re in the business of making money not designing things that you want to wear. 

For example, you may love the most luxurious fabric or the brightest color possible, but it doesn’t mean that your customer does.

In fact, in the majority of cases, your customer is not who you think they are. 

It’s very rare that you find a company that truly understands who their customer is. Often times, companies are actually trying to target a different audience. 

J.Crew has recently taken a huge plunge in sales and it’s because of one major problem: they are alienating their customer. 


What was once a brand known for affordable quality and everyday wearable classic pieces has now become a trendy and overpriced store with no focus or curation. 

This article explains in more detail what exactly happened, and the author discusses that as the emergence of Jenna Lyons (J.Crew’s Creative Director) as a celebrity came about, the brand started to evolve with her style rather than the customers. 

Yes, the J.Crew customer may look to Jenna for style advice as the brand’s Creative Director, but that doesn’t mean over-assort your collection with pieces that quirky Jenna Lyons would wear for what she considers an everyday item. 

The mistake J.Crew has made here is not fully understanding their customer’s wants and needs. 

STEP 2: Create a profitable assortment

If you’ve been around for a few seasons you should have an idea of what works for your customer by now.

However if you’re just starting out it can be a difficult question to answer in the very beginning if your sales are minimal.  

Putting yourself into a merchandising mindset also requires some analytical skills. Whether we want to do this work or not, there’s always going to be some math involved when it comes to fashion.  

creating a profitable assortment

The most important thing in creating a profitable assortment is to figure out your margin. When you are first starting out this may be a difficult task due to lack of experience and also not knowing your competition’s pricing strategy.  

The main goal to keep in mind is: What can this item retail for?

Meaning, how much is the perceived value for this item.

How much are my competitors selling their items for? 

When you are just starting out you also need to figure out how you want to position your brand.

Are you a luxury brand with a higher price point, or are you more of a contemporary level?  
Or are you even a discount or fast-fashion priced item.

You need to take into account that your buyer will want a 50-60% mark-up at the very least.

Some retailers depending on their size are demanding upwards of 65-70% now which can be a huge deterrent if you are selling wholesale.

This is when you need to ask yourself does it even make sense to do business with that particular customer if you aren’t making much profit. 

Overall I would say that a good margin when you are starting out ranges anywhere from 30-40%.

You'll want to aim for upwards of 50-60% eventually, but when you are first starting out it’s much smarter to take a lower margin and not purchase too much inventory.

Companies can easily go into major debt when they buy too much inventory. It doesn't matter if you're a large company or small company, both have made this mistake. 

Unless you are planning on carrying over items each season - i.e. your core/staple items, it’s important not to buy too much inventory just because the factory is willing to offer you a lower price. 

As you begin to increase your sales each season you should be negotiating with the factory of how you can get your costs down in order to increase your margin. 

STEP 3: Know your sales figures

know your sales figures

This is widely overlooked in many small companies.  

You need to be analyzing your sales - no matter how small they are. 

If you are only in three stores you need to be communicating with that store’s buyer to get an idea of what your sell through is.

If you aren’t understanding what is actually selling how are you supposed to

A) Understand your customer
B) Put together your assortment for next season. 

These two points are crucial in the merchandising process and creating your best possible assortment. 

Are you beginning to see how all each step is somewhat tied together? 

Merchandising is the key to a successful company in that they tie every single aspect of the business together.

Design, sales and product development need to all be linked together and on the same page. That is the merchandisers job. 

Once you have a clear idea of what you are selling and who your core customer is, you can begin to plan for the future in terms of what offerings you will create in relation to what is selling. 

You may think that you customer wants expensive outerwear or fancy details, but in reality your knits are selling 10x what you’re offerings are.

This would be a major indicator that perhaps you should increase your knit offering. 

Sounds pretty simple right? 

You would be surprised how many people cannot grasp this concept because it’s not what they want to design/produce/sell. 

Bottom line is that if you don’t have any customers buying your product you are essentially creating a collection for yourself. 

There has to be a balance of personal like and customer like. 

This is the essential concept to remember when getting into a merchandising mindset.