Although Insitetrack primarily offers price monitoring and intelligence solutions, the real reason we operate is to help business grow and increase their profitability. Below are some of the hints and tips we have gathered from our customers over the years that will help growing your margins!
Our seven top tips-
- Really promote the premium or higher margin products. A lot of small businesses promote lower-margin products and services, then try to up-sell the customer into something better. Why not do the opposite?
- Understand your price strategy – so you can raise prices rather than just discounting. In some cases you may have more value than the competition, however you need to understand what your competition is doing, both in terms of price and stock availability.
- Differentiate yourself. Give them other reasons. What do you do well? What makes you better than your competitors? Price is certainly one consideration –understand it in depth, but don’t make it the only one.
- When pricing items, use market value pricing versus cost plus mark-up. Always determine what the optimum price point should be when pricing items. Consider the range of pricing across your competitors and identify how you compare to the market.
- Use indexing as a way to measure category movements. Sometimes it is easier to use an index to measure movements of categories or product ranges to verify where your profitability ranks amongst your competitors.
- Identify overstocks or slow moving lines use them for offensive promotions. The key to improving forecast accuracy is a disciplined approach to planning and the key to profitable overstock liquidation is identifying overstock early in the season and taking steps to move that inventory while still in season.
- Perform simple Profit & Loss checks at category, subcategory and item level. If the P&L check identifies a GM 25% or higher, then you know, generally speaking, that the item (or category) will contribute to overhead and profitability. Growing your margins does not have to been seen as a generic overall, it is often overlooked to look at your products at these different levels and increase their respective pricing position.