To get started, I’m going to assume that you’re not in retail for the sake of your health. You’re in retail because you want to make a profit from selling your goods.
Of course, you are!
There are some clever ways retailers can maximize profit on everything they sell and I’m willing to bet you’d like to know what those are. So, let’s get started.
Lower your price points.
When you can lower your price points without impacting the bottom line, you’re maximizing your profit potential.
Talking to vendors about ways to do this effectively is a solid approach. Buying in large lots (for quick-selling items), and consolidating purchases, creates more buying power that you can pass on to your customers as savings.
When negotiating with your vendors, make sure they know you’re checking in with competitors. This strategy very often leads to existing vendors being more willing to budge on pricing.
…or raise your price points.
While this may seem counter-intuitive, it’s important to consider the idea that you may not be charging enough for your products to enjoy a healthy margin.
Look at your numbers and find a balance between consumer-friendly pricing and the health of your business. Also, consider your local economy and how that might determine your customers’ true sensitivity to pricing.
Your competition is another key for determining whether your price points are serving your bottom line. If they’re charging significantly more than you are (or significantly less), this factor should inform your decision on whether to drop pricing or raise it.
If your customers visit you regularly because you’re offering them a superior customer experience, you’ll be much more able to up your pricing. Over half of consumers polled were willing to pay more for excellent customer service and in-store experience.
Automation.
While it’s important to defend the retail edge in terms of face-to-face interactions which add value, automation may be the answer to some of your in-store functions.
Data entry is one area you can reduce labor and save money. Sales data needn’t be manually entered when you have the right kind of Point of Sale and accounting software. Synchronized to work together, these two systems can be automated to end the drudgery associated with this function.
Inventory management can also be automated, saving you and your staff huge rafts of time. That’s time you can spend on displays and customer service.
Personalization.
Today’s consumer is strongly motivated by personalized retail experiences. Creating targeted discounts for loyal customers is another way to maximize profit on everything you sell.
Some customers won’t need a tremendous discount to act on your offer. Others need a significant discount to compel a purchase. Knowing your customers and being in tune with their buying habits is key to effectively targeting discounts and offers.
Global discounts are sometimes effective, but personalization is a trend in retail that should be driving how you’re presenting them to customers.
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