Retailer's Corner: The Most Important Retail Numbers to Know
Important Retail Numbers to Know
“Always recap your leadership with an end of year report that includes:
- Storytelling in both numbers and anecdotes
- Pictures of which items were the bestsellers
- Bottom line at end of year best indicator of performance
- Margin of attending #LVMkt as approved business expense.” - Non-Profit Retail Symposium
“I look at these data points by vendor for my top 10 vendors each year. It helps with negotiating discounts, freight caps, value added services such as pre-ticketing, etc.:
- Sales trend – month-to-date (MTD) and year-to-date (YTD), both to budget (plan) and to last year (LY)
- Net revenue (gross margin $) - YTD to both plan and LY
- Gross margin % - YTD to both plan and LY
- Gross margin ROI – YTD to both plan and LY
- Turnover – YTD to both plan and LY.” - Judy Rancour
A Deeper Dig on Numbers
“Profit margin! We have a minimum mark up that we know we need to make for any product, an ideal mark up and our goal mark up. When we find a new product, or if a price has changed, we run the numbers and see whether it is profitable. We've had to say goodbye to good products because the new pricing has minimized our margin.” - Raymond McKenzie
“One of the best numbers to determine the health and wealth of your store is inventory turnover. Just like sitting is now the new health hazard, merchandise sitting around is the sign of a store in trouble. Get moving! Move that slow merchandise around the store and out the door. If it doesn't move, it does not turn. Aim for 3-4 merchandise turns a year.” - Lilly Stamets
- “A “good” ROI? Better than last year! Always return a profit (after expenses!)
- Every square foot of space counts – most important statistic is margin/sq. ft.
- Vigilant inventory management: for every dollar in inventory, returned x%.” - Non-Profit Retail Symposium
Other Important Indicators
“I keep a tight rein on the cost of good sold. Business is all about margins. I am shocked when buyers assume keystone markup is all that they are able to price product!” - Patti Biro
“It takes a lot of work to get a customer through the door. Your average transaction will show you how much you are exciting them by how much they spend per purchase.
If you can track how many people come into your store, this is a good indicator of how much they like your store. The higher the capture rate, the more people are feeling compelled to shop. Raise your capture rate = raise your sales.
By tracking sales per visitor, we estimate sales for any given timeframe and plan accordingly. Once I know what to anticipate in sales, I work on budgeting inventory.” - Raymond McKenzie