Retail Cash Flow

#21 10-01-2009, 01:51 PM

OK the competitor you mentioned is working at their non sale price of £5.99 at a mark up of 155% (although I suspect they either don't have a discount or ignore the discount price and work from the normal cost price and make a mark up of 150%)

You can put this to the test by finding other products that you both sell and try multiplying your standard cost price by 2.5 to see if you get roughly their selling price.

Perhaps you could confirm that for me?

Chubster · #22 10-01-2009, 02:51 PM

Nope...well.....seems to depend on the product.

Did a cat collar and the price I got was 16p over but did a bed and the price I got was nearly £20 over. A dog collar worked out as £22.37....the RRP is £15.95

This is why Im struggling to come up with a more effective way for pricing things in the shop (and to cover our daily costs £88) other than they way we are doing it now which I know is not very business like.

#23 10-01-2009, 03:41 PM

Well sod them as an example then

Quote:

Originally Posted by Chubster

I have had a very quick look through the catalogue and very roughly food items have a markup of around 25 - 45%. Accessories are roughly 40 - 80%

I think this is what is confusing me as nothing is typical....the markup varies on every single product ??

I am going to PM you the mark up I believe you should be working too, it is clear that your business is divided into food and non-food, do you know roughly the percentage split?

Now I need to confuse you again, but it is the next step, I will PM you first.

Chubster · #24 10-01-2009, 03:55 PM

Quote:

Originally Posted by IP2

Well sod them as an example then

LOL....exactly what I was thinking.

Confuse away....Im gunna go get me a stiff drink.

Joking aside I really do appreciate all your help. It is important I get this right in my head so I can move forward with the shop.

The internet site is a different ball game all together and as that doesn't have many running costs I can work that separately.

Oh....and off the top of my head I would say roughly about 70 30 split with regards food - non food

#25 10-01-2009, 04:30 PM

Worth your while to check the exact split, you could possibly do it on your till by using the different staff member keys, ie use "1" for Food and "2" for non food, that way you will be able to easily see how much of each you are selling each day by doing an "X" total.

Chubster · #26 10-01-2009, 04:36 PM

I will have a look at that....ta.

#27 10-01-2009, 04:58 PM

Right if you were to use the mark up model I PMed you and assuming the 70 - 30 split is correct then your average mark up would be 54.5%

Assuming also that your daily overheads of £88 are for a six day week (will need to re do this if you have worked that on a 7 day week) then you need to take £249.51 per day to break even*.

(Sorry I decided to jump the gun and finish the calculations)

*What this does not allow for as I said in my PM is setting these as minimum mark up levels, additional mark up will obviously reduce the amount you need to take.

What we have here is a baseline, where we can see if you need to adjust your margins to require lower turnover to breakeven. This in part forms one of the fundamentals of your business model.

Chubster · #28 10-01-2009, 06:42 PM

YEE HAH !!!!

Using your calculations at the beginning of this post I had a figure of about £220 a day so that makes good reading....at least it is starting to sink in.

With the figures you sent me they allow for quite a bit of manoeuvring so at least I now have a good start.

John...thanks for your patience in helping me understand this! Top man

Chubster · #29 10-01-2009, 06:51 PM

All we have to do now is factor in stock

But perhaps that can wait for another day

#30 10-01-2009, 07:00 PM

Quote:

Originally Posted by Chubster

All we have to do now is factor in stock

But perhaps that can wait for another day

I will answer that, but you now have the basis of the answer yourself....

If you sell £249.51 of stock in a day (based on above figures), what did that stock cost you?

Retail Cash Flow

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