A couple of years ago, it looked like everyone was attaching a gas surcharge for most products.
Delivery prices had gone up, and retailers and service providers were passing the costs along because well, everyone knew gas was expensive.
1. Increase prices.
You can selectively raise the price of your most popular items to most effectively add to your bottom line. You don't have to increase prices on all products. Just remember, no one knows the price you pay but you.
2. Limit your focus.
You can't be everything to everyone. It's the difference between a restaurant with a menu of 200 second-rate items and one with twelve items that are outstanding. Consider how much profit you are making on your slower-moving items. Could that shelf space be devoted to quicker-moving, more profitable items? Of course!
3. Limit the discounts.
Without a plan, you’ll do anything to get money in the bank. I know one toy store owner who, when it was time to pay bills, went on Twitter to tell her followers they'd get 30 percent off if they came in that day. She thought she was brilliant. What she didn’t realize was that she was robbing herself of profit to pay her bills. She was teaching customers to wait for the next tweet. She needed a quarterly promotions schedule, and so do you.
4. Cut waste.
You want to get more done with who you have. Are there jobs you're hiring others to do that you could possibly complete with staff? Do you really need to pay a window washer, for example?
5. Schedule employees to need.
Do you have three people to open when you could use two for the first couple hours? On the other hand, add staff if you are busy every Saturday, so you don't make customers wait and lose them to a competitor.
6. No overtime. Period.
Don’t let hourly managers fill-in for lower-cost hourly employees. Use salaried employees if something comes up.
7. Don’t schedule for the convenience of your employees.
If all you need Rachael for is four hours, then give her four, even if she would rather work eight.
8. Award extra hours based on merit.
Grant employee requests for more hours based only on their average sale or number of units sold per customer, not simply on their request or need.
9. Personally hand out all paychecks.
When you personally see how much each staff member takes home, it makes costs real for you.
10. Give bonuses when earned.
Pay bonuses that are proportionate to the amount of profit the business brings in rather than total sales numbers.
11. Look for theft by matching inventory to sales.
A restaurant franchise I know audits for internal theft by matching how many cups it receives to the number of drinks ordered.
12. Cut vendors.
When you buy more from fewer vendors, you'll often get a better deal on pricing, shipping, and dating. Ordering only a few items from a number of different vendors involves more bookkeeping and tracking, and you often pay top-dollar to try to meet each one's minimum orders. No one's items are that exceptional.
13. Combine your orders with other dealers to get freight and larger order discounts.
Just be sure to decide ahead of time which of you will do what, and pay before delivery to avoid problems.
14. Sell added value by bundling products and services.
Best Buy's Geek Squad promises it can Fix any computer problem-anytime, anywhere. Of course it leaves off For a price. People don't want the hassle of figuring things out or screwing things up. Customers value their time and will pay for worthwhile services related to the products you carry. Selling added value is the way to a very profitable future.
15. Fire unprofitable customers.
Those who need a lot of hand-holding, always beat you up on price, or constantly call you with some problem take up a lot of time. If your company is large enough to assess this, ask your order desk or sales reps to provide their top 10 complainers and match them to the amount of profitable orders they generate. Even if they deliver large volume, if they don’t pass, tell them that while you appreciate their business, the costs to manage the account outweigh the profitability and you therefore must implement a price increase.
This article originally appeared on retaildoc.com
About the Author
Since 1994 companies worldwide have turned to Bob Phibbs, the Retail Doctor®
for the proven expertisenecessary to grow their sales. An American retail expert, Phibbs has been engaged as a motivational speaker on retail, a luxury retail sales trainer, author, franchisor and customer service champion.
He is frequently called on to provide commentary on Marketing and Branding for MSNBC, FOX and others. His clients include some of the largest retail brands in the world including Bernina, Caesars Palace, Chopard, Hunter Douglas, Lego, Omega, Hearts on Fire, Husqvarna, Tommy Bahama, Vera Bradley and Yamaha.
Disclaimer: The views and opinions expressed in this article are strictly those of the author. CPSA does not endorse any of the companies, products and services mentioned within this article.