Basic Foundation in B&M?

A case Study Approach

Fundamentals of B&M?

Basic Plan for the Assortment Buiding

Retail Math?

Price decisions directly impact a retailer’s profitability and competitiveness. Thus, pricing is one of the most important decisions managers have to make. After all, pricing can make or break a business: set prices too high, and you shut yourself out of competition with other retailers. But price too low, and you can’t cover your costs. So, you’d think retailers must have adopted some pretty sophisticated pricing strategies by now, right? Unfortunately, not really. Here are some numbers that give an idea of the state of affairs:

Retail Price = Cost of Goods + Markup?

What is Retail Price?

Markup = Retail Price – Cost of Goods?

What is Markup?

Cost of Goods Sold = Retail Price – Markup?

What is Cost Of Goods Sold ?

Break-Even Analysis: Fixed Costs/Gross Margin percentage

Contribution Margin: Total Sales – Variable Costs

Cost of Goods Sold: Beginning Inventory + Purchases – Ending Inventory

Gross Margin: Total Sales – Cost of Goods

Gross Margin Return on Investment: Gross Margin $ / Average Inventory Cost

Margin %: (Retail Price – Cost) / Retail Price

Inventory Turnover: Net Sales / Average Retail Stock

Initial Markup: % = (Expenses + Reductions + Profit) / (Net Sales + Reductions)

Maintained Markup:?

A) MM $ = (Original Retail – Reductions) – Cost of Goods Sold B) MM % = Maintained Markup $ / Net Sales Amount

Markup?

A) $ = Retail Price – Cost B) % = Markup Amount / Retail Price

Open to Buy:?

Open to Buy: (Planned Sales + Planned Markdowns + Planned End of Month Inventory) – Planned Beginning of Month Inventory

Quick Ratio:?

Current Assets – Inventory / Current Liabilities

Reductions?

Markdowns + Employee Discounts + Customer Discounts + Stock Shortages

Sell-Through Rate?

% = Units Sold / Units Received

Stock-To-Sales Ratio?

Beginning of Month Stock / Monthly Sales

The Drawbacks to Mathematical Retail Pricing Formulas?

Cost-plus pricing and other basic mathematical retail pricing formulas (also referred to as “rational” pricing strategies) were by far and away the most common techniques used by traditional retailers

Advanced Retail Pricing?

Match Your Retail Pricing Situation to Your Retail Price Formula

What is Buying & Merchandising? Buying is one of the most important roles in the retail and consumer sector. It is the buyers who decide what products the company is going to sell, and from where it is going to be sourced. … Merchandisers will decide how the products will be allocated and displayed and assorted to achieve high sell-through.

 

Strategy Document as a Form

A B&M Strategy Form