Use Your POS Software to Prepare Your Merchandise Plan
Preparing a merchandise plan makes crucial buying decisions that much easier. This would be no different than a home builder having a design drawn up before he started building it. The first key is to make sure you are proficient in the use of the information gained from your POS software system. Once you have good historical data, the plan is much easier to build. Top down planning is usually the best for most small retailers. Start with total company figures, move to departmental numbers and then to the class level.
When building your plans, try to give yourself more room in the mark-up area. If you start with higher mark-ups, your early markdowns can be much more effective without killing your gross margin. Plan some markdowns for each month so that you will always have some in-store specials working. Markdowns, employee discounts and shrinkage must be planned for to obtain accurate inventory levels and forecasted sales totals.