What is the real impact of Multi Sales?

What Retailer doesn’t love a Multi Sale!

Do you know the real power Multi Sales have on your margin?

The real Net Profit you make on the first item you sell would typically be under 10%, after paying for all expenses.

So if you sell an item for $150.00, your typical Net Profit would be under 10% or $15.00, that’s if you are doing extremely well! Most retailers would be more like 6% or around $8.00.

Let me explain by example:

If the 1^st Item is $150.00 less gst = $136.36
Less COGS, the Gross Profit would be around 55% or $75.00.
EXPENSES = discounts 10%, occupancy 15%, wages 12%, admin 5%, marketing 2% and other costs 5%, would be around 49% or $67.00.
NET PROFIT = $75.00 less $67.00 = $8.00.

Compare this to the 2^nd Item at the same RRP of $150.00 less gst = $136.36
Less COGS, the Gross Profit would be around 55% or $75.00.
EXPENSES = discounts 10%, occupancy 0%, wages 0%, admin 0%, marketing 0% and other costs 0%, would be around 10% or $13.60.
NET PROFIT = $75.00 less $13.60 = $61.40

You see you have already paid for all other expenses, (apart from any discounts), in the 1^st item, so the 2^nd item is where you make the real profit!

If you don’t have a focus on selling multi sales in your business, or measure what percent of your sales are multi sales, you are really missing out on some great profit opportunities!

This and other strategies that can positively impact, Sales, Profit and Cash Flow.

If you are interested in taking a deep dive into your retail business, simply shoot me an email merrill@merrillallen.com.au or give me a buzz on 0409 495 776 and we can arrange our Free Strategy Session.
Would love to talk about the opportunities your retail buisness!
Merrill
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How well do you know your Aged Inventory position?

And how this is impacting your Sales, Profit and Cash Flow!

The age of the stock can have a substantial impact on your Sales, Profit and Cash Flow!

The more current your stock is, the more likely you are to sell it, resulting in Increased Sales.

The older your stock, the less value it holds and the more likely you will need to mark it down, resulting in Profit Loss!

The longer it sits on the shelf before it turns into cash, the more it will Impact Cash Flow!

So there are many reasons to keep track of your aged inventory!A common way for retailers to look at aged inventory is by categorising the inventory into age buckets 0-3 months, 3-6 months, 6-12 months and 12+ months.

This may be possible via your POS system and if so, a great idea to run and regularly look at this report.

You can’t manage what you don’t measure!
The age of your inventory is also a very good indication of the health of your inventory, and in turn the financial health of your business.
Ideally, the more you have in the 0-3 months and the less in the 12+ months the better financial position your business is in.

This and other Inventory strategies can positively impact, Sales, Profit and Cash Flow.

If you are interested in taking a deep dive into your inventrory, simply shoot me an email or give me a buzz (contact details below) and we can arrange our Free Strategy Session. Look forward to hearing from you.
Merrill
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