RETAIL MATH

"Retail math is considered an integral part of a good retail manager's skill set. It can be found on some companies pre-employment screening tests."

Any Questions? Live chat by AliveChat Top Selling DMSRetail Success Guides: 1. Retail Math Made Simple 2. Super Retail Success Bundle 3. DMSRetailer-Store Manager's Organizer

Calculation of a few commonly used profitability indicators:

Gross Margin:

GM % = (Selling Price - Cost)  x 100 / Selling Price

Example: You sold an item for $49.95, and the cost of the item is $30.00.

GM %  =  (49.95 - 30.00) x 100 / 49.95 = 39.94%

 

   

Retail Math-Made Simple 2nd Edition:

Now you can buy the book with

complete formulas and full explanation

of how to use them. More Info

  $17.95 (Fast, Electronic delivery to your email in pdf format)

 

For Printed version, DVD or Webinar options, go here

Mark Up:

Mark Up % = (Selling Price - Cost)  x 100 / Cost

Using the above example,

Mark Up % = (49.95 - 30.00)  x 100 / 30.00 = 66.5%

Calculation of a Quick Inventory Level:

Weeks of Stock:   

Inventory (at retail) divided by average weekly sales for a given period of time.

So, if you have $8,000.00 worth of inventory in one product, and your total sales of that product for the past 6 weeks is $12,000.00 the calculation would look like this:

$12,000.00 divided by 6 = average weekly sales of $2,000.00

$8,000.00 divided by $2,000.00 = 4

This means that if you did not replenish your inventory and sales continued at the same pace, you would deplete your inventory of that product to zero within 4 weeks.

 

Arguably, the most important retail success indicator:

Gross Margin Return on Inventory Investment (GMROII):

GMROII = GM% x (Sales / Avg. Inventory)

Example: Still using the same numbers from Gross Margin calculation, assume that the store's net sales over a  period of 12 months is 24M and during this time it carries an average inventory of 6M. Then:

GMROII % = 39.94 x (24 / 6) = 159.76%

   

 Retail Math-Made Simple 2nd Edition:

Now you can buy the book with

complete formulas and full explanation

of how to use them. More Info

  $17.95 (Fast, Electronic delivery to your email in pdf format)

 

 For Printed version, DVD or Webinar options, go here

Retail math is considered an integral part of a good retail manager's skill set. It can be found on some companies' pre-employment screening tests.

Retail Management Training Programs

Best Practices for Managing a Multi-Unit Retail Operation

Now You Can Get Quality Training Wherever You Are!

If you own or are in charge of multiple stores, this is the ultimate training to get. Everything you need to know to make sure your stores are firing in all cylinders and zooming fast to success you have not seen before. Click below for more information and registration:

"How You Can Reach the Maximum Potential of Your Store"

with DMSRetail's

Mega Retail Success Bundle

And Beat the Performance Curve, FAST

 Management Blueprint to Create Your Own Retail Success Machine

New! 4 more success tools and 5 Awesome Bonuses added! Save even more!

Super Retail Success Bundle

The Retail Management Power Club

Please click on the banner for information

Send to a Friend