Merchandising noun or verb
Sponsored Links
This presentation is the property of its rightful owner.
1 / 123

MERCHANDISING NOUN OR VERB? PowerPoint PPT Presentation


  • 81 Views
  • Uploaded on
  • Presentation posted in: General

MERCHANDISING NOUN OR VERB?. MERCHANDISNG. Introduction : How Does Merchandise Get In Your Store? What Questions Should I Ask Myself When Ordering?. OBJECTIVE. Be able to define merchandising. MERCHANDISING. Merchandising is being able to: get the right merchandise

Download Presentation

MERCHANDISING NOUN OR VERB?

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


MERCHANDISINGNOUN OR VERB?


MERCHANDISNG

Introduction:

How Does Merchandise Get In Your Store?

What Questions Should I Ask Myself When Ordering?


OBJECTIVE

  • Be able to define merchandising


MERCHANDISING

  • Merchandising is being able to:

    • get the right merchandise

      (color, size, style,quality,etc.)

    • at the right time

    • at the right price

    • at the right place

    • in the right amount


MERCHANDISNG

  • Where does it come from?

  • Who ordered the merch-andise?

  • Does it sell?

  • Is it good quality stuff?


MERCHANDISNG

  • How many should we stock?

  • What sizes should we have?

  • What does the competition have?


MERCHANDISNG

  • Is it a fad or a trend?

  • What kind of price are people willing to pay?

  • Etc. etc. etc.


THE JEANS ACTIVITY

  • With two partners, spend $10,000 to stock a jean store.

    • Have 5 brands

    • Cost is $20 each

    • Identify sizes to be carried

    • Identify the # of jeans to be stocked in each size


THE JEANS ACTIVITY

  • With a partner, spend $10,000 on stocking a jean store. (Cont.)

    • Calculate the total dollars spent per style/brand

    • Present your plan to the class & turn in to me


OBJECTIVE

  • Be able to outline the buying process used by most marketing businesses


The Buying Process(OVERVIEW)

  • Prepare a merchandise plan (Monthly plan of buys for year)

  • Choose the assortment

    (color, type, size, variety, etc.)

  • Find the best supplier

    (quality vs. price)

  • Negotiate the order


OBJECTIVE

  • Be able to describe the factors that effect a business’ merchandise assortment


Merchandise Assortment Considerations

  • Image

  • Brand Policy

  • Pricing Policy

  • Merch. Plan

  • Customers

  • “Experts”


How do Buyers Know What to Buy?

  • Marketing Research

  • Customer Contact

  • Want Slips


OBJECTIVE

  • Be able to define & complete a purchase order


Purchase Orders

  • A business form used to tell a vendor that you want to buy merchandise


Purchase Orders

  • P.O. TERMS:

    • To

    • Date

    • Shipping Date

    • Via

    • FOB

      • (Shipping Point vs. Destination)

    • Terms


Purchase Orders

  • P.O. TERMS:

    • Order #

    • Items #

    • Description

    • Quantity

    • Unit Cost

    • Total Cost

    • Total Order


OBJECTIVE

  • Be able to calculate Purchase order terms


Why do vendors offer terms?

  • For Paying Cash

  • For Paying Early

  • For Buying in Volume

  • For Buying Regularly

  • For Buying Out of Season


Sample Terms

2/10 NET 30

  • The 2 is the amount of discount available

  • The 10 is the number of days available to get the discount

  • The 30 is the total number of days available to pay the bill


Sample Terms

2/10 NET 30

  • EOM

  • ROG

  • Advance Dating


Sample Problems

Assume a $1,000 purchase dated on 4/1/01 w/ the following terms Due Date

Discount = ________

1.) 5/10 Net 30 _____

2.) 5/10 Net 30 EOM _____

3.) 5/10 Net 30 6/1/01 _____


Sample Problems

Assume a $1,000 purchase dated on 4/1/01 w/ the following terms Due Date

Discount = ________

1.) 5/10 Net 30 5/ 1/01

2.) 5/10 Net 30 EOM 5/30/01

3.) 5/10 Net 30 6/1/01 6/30/01


ACTIVITY


OBJECTIVE

  • Be able to complete an invoice


INVOICE TERMS

  • Pieces

  • Weight

  • Invoice #

  • Backordered (B/O)

  • Unit Cost

  • Shipping Cost

  • Tax


ACTIVITY


OBJECTIVE

  • Be able to define & complete the following forms:

    • Bill of Lading

    • Waybill

    • Freight Bill

    • Delivery Receipt

    • Packing Slip


Physical Distribution Forms

  • Bill of Lading

    • Also called a shipping order.

    • Used to request that a transport company come pick up & deliver merchandise.

    • Serves as a contract

    • Consignor vs. Consignee


Physical Distribution Forms

  • Waybill

    • Used to keep track of merchandise as it moves through the “Channel of Distribution” (ex. Fed Ex Ad)


Physical Distribution Forms

  • Freight Bill

    • An invoice (bill) for the shipping charge

    • Tells who should be paying for the shipping charge


Physical Distribution Forms

  • Delivery Receipt

    • Form used to verify that merchandise has arrived

    • Signed by the buyer


Physical Distribution Forms

  • Packing Slip

    • Used to compare merchandise delivered w/ what was supposed to be in the carton

    • Condition, number of items, correctness of order


ACTIVITY


MERCHANDISNG

.

Retail Pricing


OBJECTIVE

  • Be able to Define “Retail Pricing”

    • Assigning a Dollar Value to Goods & Services


The Importance of Proper Pricing

  • Attracts Customers

  • Determines Sales

  • Determines Profit

  • Keeps Up With the Competition


OBJECTIVE

  • Be able to Define the Terms Associated with Retail Pricing:

    Retail Price: The amount that customers pay for a product or service


OBJECTIVE

  • Be able to Define the Terms Associated with Retail Pricing:

  • Cost: The amount that a business pays to purchase products to resell


OBJECTIVE

  • Be able to Define the Terms Associated with Retail Pricing:

  • Markup: The additional amount that a business adds to cost to cover its expenses AND make a profit


OBJECTIVE

  • Be able to Define the Terms Associated with Retail Pricing:

  • Markdown: A Reduction in

  • the amount of Retail Price


FORMULA

RP$ = C$ + M$


FORMULA

RP% = C% + M%


FORMULA(Variations)

C$ = RP$ - M$

M$ = RP$ - C$

C% = RP% - M%

M% = RP% - C%


ILLUSTRATION


But What do Business People Generally Know?

  • Retail Price = 100 %

  • Cost of Goods (C$)

  • Markup % (M%)

  • The Formulas


PROBLEM: You’ve Got Apples & Oranges


Set - Up

RP$ =

RP% = 100%

C$ =

C% =

M$ =

M% =


EXAMPLEWhat can you Calculate?

RP$ =

RP% = 100%

C$ = $6.00

C% =

M$ =

M% = 40%


EXAMPLE

RP$ =

RP% = 100%

C$ = $6.00

C% = 60%

M$ =

M% = 40%


EXAMPLE

RP$ = C$ / C%

X = $6.00 / 60%


EXAMPLE

RP$ = $10.00

RP% = 100%

C$ = $6.00

C% = 60%

M$ =

M% = 40%

RP$ = $6.00 / 60%


EXAMPLE

RP$ = $10.00

RP% = 100%

C$ = $6.00

C% = 60%

M$ =

M% = 40%

M$ = RP$ - C$


EXAMPLE

RP$ = $10.00

RP% = 100%

C$ = $6.00

C% = 60%

M$ = $4.00

M% = 40%

M$ = RP$ - C$


DO SAMPLE PROBLEMS#S 7, 9, 10


OBJECTIVE

Be Able to Calculate Markdowns


MARKDOWNS

MD$ = RP$ x MD%

MD$ = $10.00 x 40%

MD$ = $4.00

New RP$ = Old RP$ - MD$

RP$ = $6.00


DO SAMPLE PROBLEM# 12


OBJECTIVE

  • Be Able to Calculate a Store’s Markup Policy


Markup Policy

Consider a store that has business expenses of $125,000 (Heat, Electric, Salaries, etc.) and spends $200,000 on merchandise. The owner wants to take home a modest $50,000 income.

  • How much merchandise must he/she sell this year? Per month?

  • What must be the store’s markup policy?


Set - Up: What Do You Know?

RP$ =

RP% = 100%

C$ = $200,000

C% =

M$ =

M% =

Cost of Goods:

$200,000

Overhead:

$125,000

Desired Profit:

$50,000


Set - Up: What Do You Know?

RP$ =

RP% = 100%

C$ = $200,000

C% =

M$ = $125,000 +

$50,000

M% =

Cost of Goods:

$200,000

Overhead:

$125,000

Desired Profit:

$50,000

Cost of Goods:

$200,000

Overhead:

$125,000

Desired Profit:

$50,000


Set - Up: What Do You Know?

RP$ =

RP% = 100%

C$ = $200,000

C% =

M$ = $175,000

M% =

Cost of Goods:

$200,000

Overhead:

$125,000

Desired Profit:

$50,000


What is the Business’ Sales Goal?

RP$ =

RP% = 100%

C$ = $200,000

C% =

M$ = $175,000

M% =

Cost of Goods:

$200,000

Overhead:

$125,000

Desired Profit:

$50,000


What is the Business’ Sales Goal for the Year?

RP$ = $375,000

RP% = 100%

C$ = $200,000

C% =

M$ = $175,000

M% =

Cost of Goods:

$200,000

Overhead:

$125,000

Desired Profit:

$50,000


What is the Business’ Sales Goal for the Month?

RP$ = $375,000

RP% = 100%

C$ = $200,000

C% =

M$ = $175,000

M% =

Cost of Goods:

$200,000

Overhead:

$125,000

Desired Profit:

$50,000


What is the Business’ Sales Goal for the Month?

RP$ = $375,000

RP% = 100%

C$ = $200,000

C% =

M$ = $175,000

M% =

$375,000 / 12 =

$31,250


What is the Business’ Markup Policy?

RP$ = $375,000

RP% = 100%

C$ = $200,000

C% =

M$ = $175,000

M% =

Cost of Goods:

$200,000

Overhead:

$125,000

Desired Profit:

$50,000


OBJECTIVE

M% = M$ / RP$

M% = $175,000 /

$375,000

M% = 46.67%


What is the Business’ Markup Policy?

RP$ = $375,000

RP% = 100%

C$ = $200,000

C% =

M$ = $175,000

M% = 46.67%

Cost of Goods:

$200,000

Overhead:

$125,000

Desired Profit:

$50,000


MARKUP POLICY

EVERY ITEM BOUGHT FOR THE STORE MUST BE MARKED UP 46.67% IF THE STORE IS TO PAY FOR ITS MERCHANDISE, ALL OF ITS EXPENSES, & MAKE THE DESIRED PROFIT!!!


MERCHANDISNG

.

Stock Turnover


OBJECTIVE

Be able to define stock turnover and its importance


Stock Turnover

The number of times the average inventory of a product is sold and reordered in a given period of time


The Importance of Stock Turnover

  • Stock Turnover is the most often quoted business ratio

  • &

  • is an indication of a business’ profitability.


The Importance of Stock Turnover

  • The Retail Price of each product sold represents the company’s cost of goods, total expenses, & desired net profit.


The Importance of Stock Turnover

  • If you multiply the number of items sold by the $ value of profit it represents, you can calculate how much profit a company has earned


The Importance of Stock Turnover

  • Therefore, the faster you sell your product, the more profit your company can make. Plus, every additional product sold results in more profit for the business


The Importance of Stock Turnover

  • Obviously, however, if you are selling out your merchandise to fast, the expense of ordering & shipping merchandise will eat into your net profit, so you can’t order to little merchandise


The Importance of Stock Turnover

  • Calculating a business’ stock turnover ratio, therefore, is an art as well as a science


Stock Turnover (ST) Ratio

S T = Sales / Average

Inventory


Stock Turnover (ST) Ratio

Sales:

The total amount

of merchandise

sold during a

specific period of time


Stock Turnover (ST) Ratio

Average Inventory:

The approximate amount of merchandise in the store at any given point in time


Average Inventory

Average Inventory =

BOM Inv. + Inv.2 +

Inv.3 + Inv. 4 + . . .

Divided By

# of Inventories

Taken


Stock Turnover (ST) Ratio “Story Time”

A small business has sales of $400,000 in a year. They took inventory 12 times. The average inventory was $50,000. What was their stock turnover ration?


Stock Turnover (ST) Ratio

S T = Sales / Average

Inventory

X = $400K / $50K

X = __?__


Stock Turnover (ST) Ratio

S T = Sales / Average

Inventory

X = $400K / $50K

X = __8__


Stock Turnover (ST) Ratio “Story Time”

A small business has sales of $400,000 in a year. They want a stock turnover of 10 because a 10 ST ratio will make them the profit they want and need. What should their average inventory be?


Stock Turnover (ST) Ratio

S T = Sales / Average

Inventory

10 = $400K /__?__

X = __?__


Stock Turnover (ST) Ratio

S T = Sales / Average

Inventory

10 = $400K /__?__

X = __$40,000__


The Importance of Stock Turnover

  • Stock Turnover is an important indication of a business’ profitability.


OBJECTIVE

Be able to describe methods to increase a product’s stock turnover ratio


The Importance of Stock Turnover

  • Increasing Stock Turnover:

  • Increases profits

  • Uses your capital efficiently

  • Decreases your expenses

  • Results in fewer markdowns


Increasing Stock Turnover

  • Better Buying: Get merchandise that people want

  • Better Pricing: Charge what people are willing to spend


Increasing Stock Turnover

  • Better Stock Control: Get rid of the “slackers”

  • Proper Stock Care: Make it look good


Increasing Stock Turnover

  • Better Promotion: Sell the product better


Sample Quiz

Complete the sample quiz on pricing, markup goals, and stock turnover


OBJECTIVE

Be able to define terms and describe procedures for the proper stocking of merchandise


Face

Salvage

Floats

Rotation

Code Dated

Mass Stacking

Signage

Broken Down

Blocking

Back Stock

End-cap

Vertical vs Horizontal

“Damaged”

Stocking Terms


Stocking Terms

  • Face - Bringing merchandise

    forward

  • Salvage - Material used in stock-

    ing that can be used again

  • Floats - Carts used to haul

    merchadise around the

    store


Stocking Terms

  • Rotation - “F I F O” Bringing old

    merchandise to the front

  • Code Dated - Expiration dates

  • Mass Stacking - Using one

    product to form large

    display

  • Signage - Informational signs


Stocking Terms

  • Broken Down - to collapse

    boxes for ease of storage

  • Blocking - Creating space on a

    shelf for products

  • Back Stock - Merchandise that

    doesn’t fit on a shelf and

    must go back to storage


Stocking Terms

  • End-cap - A display built at the

    end of an aisle

  • Vertical vs. Horizontal - How

    products are placed on

    shelves

  • “Damaged” - Merchandise that

    can be fixed and sold


Customer Service

Safety

Efficiency

Appearance

Increased Sales

Stocking Procedures


Customer Service:

Customers come first. Help whenever possible

Wear your uniform

Take customers to product vs. pointing in general direction

Stocking Procedures


Safety:

Keep aisles clear

Don’t overstock shelves or floats

Be able to see when pushing floats

Remove out of date merchandise

Lift properly!!!!

Stocking Procedures


Efficiency:

Stock using two hands

Use teamwork

Use your product knowledge!!!

Properly stocked merchandise uses less space allowing more profitable products to be stocked and sold

Stocking Procedures


Appearance:

Shelves should always look full and orderly

Keep shelves neat & clean

Repair damaged fixtures and products

Keep yourself looking neat & clean

Stocking Procedures


Increased Sales:

Signage is critical. It is the salesperson!!!

Rotate products on the endcaps

Place your most profitable merchandise at eye level

Being neat, clean, & orderly helps to sell also!!!

Stocking Procedures


On the Job safety


Film:“Stocker Interactive Program”


OBJECTIVE

Be able to define terms and describe procedures for the proper inventory of merchandise


Unit Control

Dollar Control

Basic Stock List

Model Stock Plan

Inventory Control Terms


Book Inventory

(Perpetual)

Physical Inventory

Inventory Control Systems


Book Inventory

A paper record

Subtract Sales

Add purchases

Doesn’t allow for Shrinkage

Information is collected by POS systems or paper records

Inventory Control


Physical Inventory

Simply counting

the products

Tedious & costly

Accurate

Inventory Control


OBJECTIVE

Be able to calculate the amount of profit earned per square foot of selling space allocated


Gross Profit

Net Profit

Item

Stock Turn

Month

Year

Per Sq. Foot

Floor Plan

Square Feet of Selling Space

Profit Calculation Terms


Profit Calculation Terms

  • Store Owners are faced w/ a limited amount of space

  • He/She wants as much profit as possible (Mgrs. Job may depend on it!) from that space

  • Products take up space!!!


Profit Calculation Terms

  • Products that make profit stay

  • Products that do not make profit leave

  • Most profitable products get the best space


Profit Per Square Foot of = Selling Space

Total

__Net Profit__

Square Ft. of Selling Space

Profit Calculation Formula


SAMPLE PROBLEMS

Profit Calculation Formula


  • Login