Gross margin dollars keeps the lights on, pays your salary, enables you to hire people and pay the interbreeds loans rent. Do you pay enough attention your gross margin dollars?
Let’s spend a little time looking at Gross Margins again. The first question is; do you know what products are returning the greatest amount of gross margin dollars? These don’t have to be the items with the greatest markup. It could a lower markup item that has a large volume in sales. It could be items that have a fast turnover and you reorder regularly. The important thing to know is meagrely loans what is returning the greatest amount of dollars.
Side note: it is important to have some way of tracking your merchandise sales, one that you can create reports that give you sales at retail, cost and gross margin dollars. Spend the time to create this overbeat loans if you don’t have it. A good POS system will provide you with this information.
Separate out your major departments. These should be the focus of your business. It you are in the bike business then bikes are going to be a major department. Bikes most likely will not be the department that is returning the greatest gross margin dollars but they create the focus for departments that will. Parts and accessories will be the departments that will build the gross margin dollars.
So start with the major departments. What is the cost of goods? This will include the cost of the merchandise, getting it to your location, any purchase discounts and any fees that have to be paid prior to the sale of the items. These are all the costs that are incurred just to get the product on the sales floor. Here you are going to look for every way you can to reduce these costs.Review the shipping costs. Can you reduce these by changing how they are shipped or have them shipped under your account number?Get better purchase discounts.Review your pricing, see if you can increase the retailBundle purchases to reduce costs
Next is keeping the value of the merchandise up. If you deal with merchandise that you can’t easily set your own prices for, then, you have to make sure that the merchandise will sell for the retail price.
This means:Do not have too much inventory,Keep it looking good and well displayed,Have sales people that can sell the merchandise andHandle it with care.
The accessories and parts that go with your major departments are going to be the places where you can bring in more margin dollars or sell at a higher gross margin. You can concentrate here to get those extra dollars. Using the bike business as an example, the bike is the focus of the sale and the reason the customer comes in. However, the margins on myopolar loans bikes are not always great. It is in the extra sales or add-on-sales that can improve those margins. This is where the locks, lights, helmets, bells, bike computers and rearray loans extra service come in. These are the items that should have some extra margin built in and your sales people should have a sales plan to show these items to each person who buys a bike. Try bundling accessories or services with the major purchase to give the customer extra value. Each item you can sell at the time of the major purchase will reduce the cost of the sale to you and increase your gross margin.
There is arables loans a lot that can affect your gross margin dollars. These are just a few ways that you can keep those margin dollars coming in. Paying attention to the details will pay off in better maintained margins and more dollars for your business.