What is the first decision to be made when considering merchandise flow?

• A. Where the merchandise will go
• B. How many SKUs to carry
• C. What price to charge
• D. Which suppliers to use

Answer: (A)

Merchandise flow begins with deciding where items will go in the store. The first step is to map out space and placement—how shelves, fixtures, and displays are arranged to guide customer movement and maximize visibility. This layout determines how easily customers can find and interact with products, which in turn shapes how the rest of the flow unfolds. Once you know where items will be placed, you can plan the assortment within that space (how many SKUs to carry), set appropriate price points for the lineup, and choose suppliers who can support the stocking and replenishment needs of that plan. If placement isn’t decided first, decisions about breadth of assortment, pricing, and supplier options won’t align with the physical flow of merchandise. Planograms and layout considerations help optimize location choices like high-traffic areas for priority items versus secondary space for slower sellers.