Are You Managing Your Prices Profitably?
There are two key components to profitability in retail: Controlling expenses and pricing your product optimally. A part of controlling your expenses is buying the right amount of product at the right price. If you overspend, you won’t earn enough in margins to cover overhead, staffing, and other necessary expenses.
Once you get your product into your supply chain, you’ve got to put it on the shelf and price it right. That means managing promotions, marketing to your customers according to their needs, preferences, and past purchases, and establishing discounts.
Here are three ways to ensure you price your products optimally all of the time:
- Establish Some Rules – Rules management is very important. You determine under what conditions a product goes on sale, what it’s ultimate price or discount will be, when it goes on sale (and when it goes back to its normal price), whether geographical considerations are necessary, and more. By writing the rules on your Retail price management promotions and discounts, you ensure that the right product is on sale at the right price at the right time. Manage your seasonal promotions and your special pricing considerations from one central location.
- Manage Multiple Promotional Campaigns – No matter what your retail niche is, chances are, you’ll have more than one promotion going on at the same time. You need a tool that will seamlessly manage all of your promotional campaigns simultaneously. And you need those promotions to be recognized at the POS where it really counts.
- Maintain Price Management Security – You don’t want every employee in your retail chain having access to your price management tools. Establish security rules for your team and allow only authorized individuals to set rules and prices at a level consistent with their authority. Store managers can set prices for their stores, regional managers can set prices and manage promotions for stores under their control, and operations managers can establish promotions for the entire chain. That’s as it should be.
If you manage your prices well, you’ll increase the profits in your retail chain, move your products, and maintain a proper inventory year round.