Sales & MarketZing !

A lot of common people think that Retail brands make a killing in terms of profits ,however the truth is that retail is a very very thin margin business , lets c how ! A good brand typically has its set of retail stores which are its advertising medium , one might say , a store for a common man looks inviting , neatly laid , and sometimes gives good deals too , but lets try breaking the store into some numbers ! a typical P& L of a store starts with the Sales /turnover Minus the Cost of good sold ( basically the cost of producing the goods ) typically varies 28 to 30 % of sales for mid segment brands and lower for premium brands as the MRP itself would be higher . Sales - COGS ,would give the Gross margin of the store , which is around 70 % ( 100- 30 ) of the store from the Gross Margin minus the COR, ie the Cost of retail . The COR of retail includes the the rental as the major component , operating expenses of the store , like salaries , electricity , pilferage ,repairs and main

Retail Maths _ PART 1 Some basic factors that directly affects profits of a retail operations :: 1 Operating Income: Gross Sales = The total retail price charged on an item X No. of units actually sold Net sales = Gross sales – Customer returns & allowance Customer returns or allowance % = Rs. Cust. Returns allowance X 100 ---------------------------------- (Gross sales) 2.Total cost of merchandise : Cost of merchandise = Billed cost + Inward freight & transportation charge + Alteration & work room charges – Cash discount 3.Operating expenses: Operating expenses = Direct + Indirect expenses Cost of merchandise sold % = Cost of goods sold X 100 ---------------------- (Net sales ) Gross margin % = Gross margin X 100 -------------------- (Net sales) Net profit % = Net profit X 100 -------------------- (Net sales) More Later ! ( items in the denominator ( in brackets) have to move to the right sorry can't handle that ! )