The formula is: 2 – 1 – 2 = 50. Let me explain.
Increase revenue by 2% (follow the pricing strategies)
Reduce COS by 1%
Reduce Expenses by 2%
A 50% increase in Net Profit can be generated in one of 3 ways:
1. Sell More
Selling more is obviously the domain of:
Advanced Selling Skills
Great customer service
Excellent Merchandising
Marketing & [...]
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Received wisdom says that since the Lord gave you two ears and one mouth, one should use them in that proportion.
93% of people rate themselves as good listeners while only 13% of people rate other people as good listeners. (Okay, I made that up, but you know what I mean )
We are never [...]
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The key measure of SUCCESS for any system is PRODUCTIVITY. This is a much used – and very misunderstood term. In this program we will study the concept of (retail) productivity in great detail, because it is important to manage the performance of any system.
Productivity measures relative performance, which is almost always the most [...]
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This sign on the counter of a coffee shop in Surry Hills , Sydney.
Raises an interesting question…
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I used Discounted Cash Flow (DCF) for many years without actually understanding it. I am sure there are many people who are a bit scared of really testing their understanding of DCF in public, so herewith a simple DCF for Dummies.
DCF is a valuation method used to estimate the attractiveness of an investment opportunity. It [...]
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The term category management has been around for some time, but only now beginning to filter through to SME retailers.
Category management is the process by which we manage our business at the category level to deliver better product, pricing and service to our customers. A category is a group or assortment of merchandise that the [...]
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Three key metrics
Stock turn (rate)
The desirable answer varies from industry to industry. For example, a grocery store is looking for a double-digit turn rate. Most of general and specialty retail is looking for a greater than 3.0 turn, for instance a fashion store must aim for at least 4 (seasons) but the better ones achieve [...]
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Ferrante reports that The Retail Customer Dissatisfaction Study, conducted by The Verde Group and the Baker Retail Initiative at the University of Pennsylvania’s Wharton School found that sales staff are the single biggest detriment to the shopping experience, which may result in a 6% loss of business for retailers.
The most critical retail shopping issue of [...]
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When vendors offer (cash) discounts for early payment, it is important to do the maths to ascertain whether it is worthwhile. Whilst a 3% discount may seem trivial, it can represent significant savings.
The $ amount saved should be seen as ‘interest’ paid to the retailer (by the vendor) for the ‘loan’ which amounts to the [...]
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