Reports

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Reports

POS SOFTWARE

A few days, I showed you could improve your shop sales by examining the item (granular) level the quantity, profit and sales.  It produced a lot of comments. These are important, but they are not considered the most crucial measurement in modern retail.  

The most crucial measure today is the Gross Margin Return on Investment (GMROI)

I will show you here what it is and how to get it immediately from your system.

Using GMROI you can get shop profit up, often dramatically.

What it measures is for every dollar invested in an item by the retailer, what profit did the retailer get back. It combines sales,  margins, stock turns and investment theory into one number.

The calculation is.

GMROI = ($Gross Sales -$Cost)/($Ave inventory at cost)

Example 

-Consider an item A with an annual sales of $1000 at a Gross Margin (or Gross Profit) of 30%

Gross Margin $$ = $300.00

Say my stock holding on an average over the year was $200

My GMROI = $300.00 / $200.00 = $1.5

What you get with this product is $1.50 back for every $1.00 you invested in that item.

- Now say we have an item B with an annual sales of $2000 at a Gross Margin (or Gross Profit) of 25%

Gross Margin $$ = $500.00

Say my stock holding on an average over the year again was $200

My GMROI = $500.00 / $200.00 = $2.5, so for every dollar, I put into this item, I get back $2.5, which is much better.

Based on this, you should push item B more even though its margins are lower. This is because it has a higher stock turn. So in theory what want items B.

Unfortunately this is an impossible calculation for a person to do for all the items in most shops manually. But it is no problem for a computer.

So what we have made is a training video to show you how to get these figures.

Please get a feel of what your items GMROI are and I will in a couple of days show you some of the benefits and limitations of it. 

Enjoy

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POS SOFTWARE

Stock turns vital because most of our money is in inventory. If it is not selling well, the funds will not be available to pay employees, suppliers, banks, etc. So look at this report.

It is easy to get your report. It takes a second.

Go to Main Menu > Cash Register > Register Reports > expand Stock > select/double the click the report “Show Stock Turn by Dissection and Item.

Now select the appropriate options and then click the View Report button. I suggest running it for the past last five (5) years, the previous year, and the previous three (3) months and compare the figures. This gives you a long, medium, and short-range. See how different departments are going.

Now, you can see trends.

Like everything, you need to review these figures with intelligence. Too high figures can mean you are understocked. 
Too low often means you are overstocked.

Have a shot and see how you go.

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POS SOFTWARE

Retail Express, had an interesting article that is worth looking into on page 12. In our POS Software, it is easy to try.

It is about rearranging products in the fridge into proper categories.  Doing this, they claim you can drive sales up an incredible amount. See the arrow marked in brown.

Click here for more details.

There is no reason why this theory should not work for any department. Try a department, then see what are your top sellers in that department. 

Go to register reports and select the top stock report as marked with the red arrow here.

 

You get this screen

 

Now select your department.

Here I used the stationery department. I put in 99 million in red for illustration. That is overkill - put in 100. I also selected a whole year as short periods can have significant fluctuations. We do not want to do this every week.

Now study the report to see your shop's strengths. See what do you sell. 

Now go to a major retailer's website and see how they categorize their department. Some like Amazon and the supermarkets have spent millions on this categorization, so they know something. Also, check out a few other shops. 

You now know the theory and your strengths, so layout your stock in a logical order.

Why not start now, pick a small department and see how you go?

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Follow this, and in this instant, you can precisely know, track, and control your top-selling products in real-time. 

Go to Register reports.

 

Now pick "Top N Stock Sales for a Given Period."

 

Now in the form put in this week.

A report comes out that looks like this with your top sellers listed.

 

Do it now, and then please inform me how you went.

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POS SOFTWARE

We do suggest rather than using extending credit to your customers. Look to VISA, Afterpay, or Zip. It is these people's jobs to collect money.  Sometimes it cannot be helped, and you are stuck with the debt. If you get caught out, here are the terms that our system used.

Our system uses a very formal terminology and methods here.

A token payment is a small payment made regularly by a customer who cannot afford to pay the full amount you're owed. It shows both that they have a willingness to repay the loan and they have not forgotten.

What can happen is that a person who is paying a little at a time, can at the end owe you almost nothing. This can be difficult to collect. So what we suggest you do is set up a payment plan that includes a balloon payment. This is a lump-sum payment of a decent size at the end

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Here is a quick way to search at what sold at Christmas last year. It will take you a few seconds to do and give you much to ponder on.

Go to register reports and select the top stock report as marked with the red arrow here.

 

I think it is easier to work by departments. In dates that you are thinking of ordering for and select the top 100 items.

Now examine this list to see what did sell. 

I find it useful to do the same analysis for the year before so 2018 as it gives an extra comparison.

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This will give you a comparison of how your shop is traveling this year to last year instantly,


Go to register reports and select it marked in green.

point of sale reports

Now select the Monthly Sales Summary.

Put in the dates for this year and then put in the dates for last year.

I find it easier to work on formal financial dates, so you align with your accountant's figures. The 17th of a month to the 16th of the next month is also a month, but it isn't very clear.

So use calendar months, financial quarters, etc. 

Now pops out a detailed report among which you will see a breakdown by dissection. 

Now you will get a report that looks like this.

Dissection monthly reports

In this example, you can see books went up. At the same time, the cards were about the same. Confectionery and drinks went down, and so on.

Now give it a shot.



 

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POS SOFTWARE

 

Required by businesses is a strategy with your suppliers.  Without suppliers, no business can function. 

We call this strategy Supplier relationship management (SRM).

You have to be careful as suppliers have many interests. Some of these interests are not in your interest. Still, they have a vested interest in helping you market more products. They tend to be much more informed about your products, market, and competition then you. Much of your success depends on them. Yet before you can plan an SRM, you need to find exactly how important each supplier is to your business. 

Here is a quick and effortless way to get this, which will take a few seconds.

Go to Cash register reports> Sales - Stock > Supplier Stock Sales for a Given Period.

Now, although there are many options there, let us keep it simple for the first run. Pick the last financial year and let it rip.

You will get a very detailed summary report of sale details by the supplier in a few moments. 

As a rule, I suggest you look at the largest few in the quantity column as these suppliers are bring in the customers.

Also look at the largest few by profit as they are paying your bills.

Now readers go for it and let me know what you find out!

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What you will notice is that successful companies focus on the long-term. If you think about it, there is often little you can do in the short-term. You can do more in the medium-term. You can even more in the long-term. Plus, it is the long-term where you can see the critical changes in your business environment.

I will show you here a quick and effortless way to look at your long-term trends in your shop. It will take you less than a minute to do, but I promise you that you will have many hours of thinking.

What started this off was a big discussion by newsagents on a report recently issued by Google on "Australian Media Landscape Trends" but concentrating on "What caused the decline in Australian newspaper revenues?" You can find the report here. It makes interesting reading as it is well researched. This is why everyone was so impressed with it. But, what caught most of the interest was the figure Google released on the fall of print circulation. It seems way off. In 2002, print circulation sales in this report were $1.3 billion. In 2018 it is listed as $0.8 billion. If the figure in 2002, is correct, then the figure in 2018 seems to be much too high. There may be many reasons for this apparent discrepancy. Although there is nothing in the report about it, many small businesses incurred much more significant losses due to this eg, the milk bar, newsagencies, etc. that made a living selling newspapers. A thousand newsagencies gone, and the rest have suffered significant losses in valuations. No-one is talking of compensation for them!

Anyway, what was wanted is a way of telling a small business what their figures would be. How do you get such a snap-shot of the long-term of a business?

To find out; a visual graph is the best.

Here is an example, this is a graph of newspaper sales in a newsagency from when the owners took over in 2005 to the end of this report in 31/12/2018

The green arrow is about when they first decided to give up newspapers. As you can see, they were large in newspapers, and their fall was much larger then what Google states. Looking at the graph, you can see that the trend down is accelerating after 2008. Soon they decided that it was not worth doing the work for sub-agencies or deliveries, so they dumped newspapers. Then they only took the newspapers back after many discussions.

It is a fascinating example, but you can do this for any dissection or product that applied to your shop. If you are doing this, I recommend working by month. It smooths out the daily sales variation but keeps the patterns. Plus, its the way most people think about their sales in monthly terms.

Go to Cash register reports> Sales > Sales dissection monthly sales trend.

Select a department, put in the dates. If you have it, look at 20 years and a few seconds to see the long-term.

See how you go and like always let me know as I am very interested in stuff like this.

 

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A lot of your data is in your POS Software and this is another example of how you can use it to boost your profits and give you a competitive advantage.

Go to cash register reports > Sales stock > Sales by Store location for a given period.

Now for this exercise, I put in the last quarter which is what you would do usually, although not much is normal now. You want this exercise a reasonable time frame.

Out will come a report with a lot of what I am sure you will find interesting information.

Here look at the locations with

1) High holding costs and low profits. (Problems)

2) Low holding costs and high profits (Stars)

These are two of the best metrics for gauging the performance of the locations in your shop to see how well you using your retail space.

Now you can experiment.

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