Retail Math Made Simple 2nd Edition
For
a lot of people the phrase 'retail math' conjures up horrifying memories
from their school days. Even so, they realize that retail math is a very
important part of operating a retail business.
In every business there is never ending number crunching going on. The
analysts have to look at the numbers from every angle to ensure on-going
profitability.
A retail store, or group of stores, is no different. There are many numbers
that need to be analyzed regularly to help in managing the day to day
business; to aid in decision making on just about everything.
You don't need to be an accountant or a mathematician to make the
calculations. Retail math is not difficult. All you need to know is which
numbers to use and how to interpret the results. Addition, subtraction,
multiplication and division are the only functions required.
Head Office personnel work with retail math regularly. Most of their
decisions are based on financial considerations of one type or another.
Retail math is a major component of the
background work done before most decisions involving the allocation of
resources are made.
Did you ever wonder why certain items in the store are not reduced in price
during a markdown? You know, the items you think won't sell even at a
reduced price? You and your staff may be thinking that your Head Office
buying department missed this item because they are not in the store and
don't know what's going on.
Well, while that certainly could be the case, more likely it has to do with
the markdown budget they are working with. Retailers know that they will be
required to take markdowns. During the budgeting, or planning process they
estimate how many dollars they will lose to markdowns. When it is time to do
a markdown they need to make their decisions based on that estimate because,
otherwise, they will lose too much during a particular time period.
And how about the flow of inventory into your store? Is it consistent or
erratic? Retail math is used to determine flow of inventory. Unfortunately
sometimes the numbers indicate that new merchandise cannot be sent in at a
certain time. Perhaps it wasn't ordered with enough lead time to get it to
your store when you think it should be there. Decisions, good or bad, are
usually based on the numbers.
For a full understanding of how your
retail business operates you need retail math knowledge.
That is where DMSRetail can help you. We have developed a Retail Math eBook
for retail management. This book will give you all of the information you
need to start using retail math with confidence. You will understand how to
make the calculations and what to do with the answers you get.
Here is a summary of what
you get:
Glossary and Definition of the Terms
Key Performance Indicator Formulas
Commonly Used Formulas
Open to Buy - Definition, Formulas
Sell-Thru Scenarios (Impact of price and gross margin on sales)
Typical Profit / Loss Statement (often called P/L or Operating Statement)
Retail math is considered an integral part of a good retail managers skill
set. It can be found on some companies' pre-employment screening tests.
Order your copy of "Retail Math-Made
Simple" now
to talk about your store(s)' performance with knowledge,
intelligence and authority.
