Lots of retail people know all about GMROII, but not so many know about GMROF. That’s Gross Margin Return on Footage.
During busy times (like now, for instance) it’s super important that we display our merchandise in the best possible way to take advantage of all that extra traffic and encourage better sell thru, right?
Well, you can go a step further than making your merchandise look great…you can put it in the best place.
So, Holiday Tip #5 is…Use GMROF to find out which of your fixtures or walls, or wall sections is returning a better profit to you. That’s right! GMROF is not just used to find out Gross Margin Return on Floor Space…you can use it to find out the Gross Margin Return on any merchandised space.
Here’s the calculation:
GMROF = GM% x (Sales* / Sq.Ft.)
*Sales for corresponding area & time frame
Here’s an example:
Which fixture is more profitable?
Fixture 1: Oval shape with merchandised area of 7.65 square feet. Sales generated from this fixture in one month are $3,465 and Gross Margin on those sales is 43.5%.
Fixture 2: Rectangular shape with merchandised area of 7.20 square feet. Sales generated from this fixture in one month are $2,987 and Gross Margin on those sales is 45.6%.
Answer: Fixture 1 is more profitable. (GMROF for fixture 1 is 197; GMROF for fixture 2 is 189)
Most of you know that we include Retail Math in all of our workshops and YourTime Study Courses. And the reason is very simple – retail math knowledge is something no retail manager or business owner can do without. It’s a basic…a ‘must have’.
Fail to understand retail math, fail to understand your business.
This year, because so many of you asked us to, we put our workshop material, including lots of retail math, metrics and kpi information, into home study courses so that people who can’t afford the investment, or the block of time, to attend our workshops can still get all of the information they need to run successful retail businesses.
Last week, we decided to package all of them together into the most comprehensive retail management training library available and offer it to you for a fraction of the regular price. We also offered to give each customer full credit for any part they already own.
We considered it our holiday gift to our loyal customers and subscribers, and without much fanfare, we made that retail management training library available at that incredible price, minus what they had already paid, for one week.
But all good things must come to an end and that week ends tomorrow – December 7th. If you want to check it out you can still go here: http://www.dmsretail.com/ultimatebundle.htm
If you decide to buy one, we’ll refund your previous purchase of a Super Retail Success Bundle and/or any YourTime Study Courses you’ve purchased to date. It’s only fair!
All the Success!
PS: The 3rd Edition of Retail Math – Made Simple was released yesterday. We’ve added Vendor Scorecards, a fully explained Profit & Loss Statement and a Retail Math Quiz! Customers who already own Retail Math – Made Simple, get a free upgrade just by sending an email to email@example.com , and many, many of you already have! (Your upgrades have been sent.) The price, for the new 3rd Edition, will remain the same for now: http://www.dmsretail.com/retailmathbook.htm