Congratulations to all the retailers that have managed to maintain their business or grow from the previous year. Managing expenses in the upcoming year is going to be the difference between the growth retailers and the ones that are looking for trouble. But managing doesn’t mean cut to the bare bone, it means making careful and thoughtful decisions about when and where to spend your money. Setting up an Open to Buy Plan for your store is the most important tool any retailer can have and with some POS software packages, it is a built in feature and requires little maintenance.
If you don’t have a good buying plan, you end up marking down much of your inventory and have lean or no profits. The reverse is too little inventory and your customers will shop elsewhere and your loyalty is gone. You need to have the right inventory at the right time in the right quantities. Sounds simple, but how many retailers follow this as if their retail life depends on it, because it does. If you don’t have an Open to Buy plan set up, do it now and start the new year off right.
The big box retailers will kill you every time if price is the only criteria used to sell more product. People want things that are different and they cannot get everywhere else, but they still want value. The value proposition is fairly simple, customers need to feel that whatever they purchase is worth it and the best way to do that is handle inventory that can only be purchased at your retail store. If you are currently using good POS software, you first must find out the value of your inventory in each department and the relationship of that department to your overall revenue. You then need to find product lines that no one else carries in your area and promote your difference. The big box retailers are constantly trying to figure out the product mix needed in the different locals that they have stores, but you have the advantage in living there and understanding the people. Price is important, but it can be overcome with the right value proposition.
Can your POS Software handle Gift Cards? Gift Cards are being used more and more instead of discounting. Not only will the cards bring the customer back, they usually will spend more than the value of the card. Another good reason, if you need it, is that 40% of gift cards are never redeemed and that is like finding money on the floor. You can read more in this article By Jenn Abelson of the Boston Globe. read more…
Why is an Open-To-Buy plan so important besides keeping an adequate quantity of inventory on hand to keep the shelves full? It allows you to stock new and fresh items that will keep your customers coming back and wondering what new items you will have next. It also places restraints on merchandise commitments so the store does not receive too much new merchandise too early in the season — – or not enough.
You will be able to estimate in advance the amount of cash that will be required to be invested in inventory from month to month for the coming season and still have adequate cash available. It also allows you to set goals and compare against actual sales and make the necessary adjustments from month to month. All of these actions can happen with the right POS Software.
Most receipt printers like the terrific Epson TM 88 series are fast and reliable, but did you also know receipts can protect your business from fraud and promote branding?
All pos systems print the receipt number on the receipt. This helps in verifying returns by recalling the actual transaction of returned items at the price at which they were sold. Not only can you verify the actual selling price printed on the receipt with what is stored in the the pos software, but it also increases customer satisfaction by accurately refunded their purchase.
The TM 88 will also let you upload a logo to the printer so your receipts reflect your company brand. A creative use of this feature would be to upload additional images such as coupons to reward your customers for shopping in your store. It is a lot easier and more econonmical to market to existing customers than customers you haven’t yet acquired. If your receipt printer does not support this feature, check with your software vendor to see if the software supports these features, and on what printers the feature is supported on.
I hope you noticed grow was not included in the above line. If the government is trying to drive small businesses out, they are doing a good job. Now small retailers are having to put up with these credit card fee hikes. Good credit, pay on time, low balances, it doesn’t matter and going from 13% to 29% is another obstacle to overcome. These fees take the consumer spendable income away and their only choice is cash.
Many Americans are not going to differentiate the retailer from the issuing bank for the card and many retailers will undoubtedly be blamed for what would be describe as highway robbery. This will not only hurt customer satisfaction, which all retailers have been fighting to grow and maintain for years, it will reduce the ability and willingness for shoppers to buy. So the next time you blame a retailer for the increased rates, stop and point your finger at Congress, Visa, MasterCard, Discover and AmX.
For the economy to start moving again, we need more jobs. The economic stimulus plan earlier this year was supposed to spur job growth, but in all areas it has failed. Congressional action on issues like government run heal care that mandate employers pay health care or be fined and card check legislation would keep American businesses from creating new jobs we need to get the economy moving again.
The best thing for Congress to do is get out of the way and let small business do what it does best: create jobs for hard-working Americans. America relies on the small business community as the standard bearer for employment in this country. The recovery is fragile and to avoid regressing, Congress should stay out of the way, support small business and let them create the jobs necessary to fully recover from the recession. Before Congress tries passing any new legislation, maybe they should go through all the poorly designed legislation from the past and clean them up. They say they can pay for all of this new health care by eliminating fraud and waste. If they can do that, eliminate the fraud and waste first and then use that new found saved money to add additional benefits to the health plan.
There are methods for preparing an Open-To-Buy plan based on each of three elements: units, cost, or retail; or on a combination of two of these three elements, such as units and cost or units and retail or cost and retail. We have incorporated into ProphetLine POS Software only retail method because it best utilizes the markdowns and discounts to give you a more accurate number.
We believe an Open-To-Buy should be prepared at retail and only retail. We also allow you to do your inventory by average, FIFO or retail. If your store’s sales are made at retail and inventory is needed to meet sales plans; therefore, it makes sense that inventory should be managed at retail and buying plans to meet sales goals should be made at retail. Once it has been planned at retail it is a simple task to convert the retail dollars to either cost or units. When you go to market, this is the best way to properly plan for that buying season.