Course Content
Basic Foundation in B&M
A case Study Approach
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What is B&M?
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Fundamentals of B&M
Basic Plan for the Assortment Buiding
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What is Assortment Plan?
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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
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Assumption 1
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Assumption 2
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Assumption 3
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The most effective retail price formula is going to take into account:
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Advanced Retail Pricing
Match Your Retail Pricing Situation to Your Retail Price Formula
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NEW PRODUCT PRICING
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COMPETITIVE PRICING
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PRODUCT LINE PRICING
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ODD-CENTS PRICING.
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9 VS. 0
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PRICE SPREAD
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DIFFERENTIATED RETAIL PRICING
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DYNAMIC RETAIL PRICING
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Buying & Merchandisng
About Lesson

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

 

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