“15 Ways to Increase Retailers’ Profit Margins” by Bob Phibbs (The Retail Doctor)

“15 Ways to Increase Retailers’ Profit Margins” by Bob Phibbs (The Retail Doctor)

Retailers’ profit margins have been more relevant than ever lately … It all started with curbside pickup, the only way many stores could sell their products during the Covid-19 pandemic. Now, some experts are suggesting retailers add similar programs: “You should really offer social shopping.”“Why don’t you ship and return for free?”“Can’t you deliver to trunk like Amazon?” This advice is well-intentioned but misinformed. If you’ve got the same resources as Amazon, Walmart, or Target, great! Add as many bells and whistles to your retail sales strategy as you like.  But if you’re anything like the retailers I know, you don’t have unlimited capital from stockholders. And programs like these take funding — additional costs you’ll have to compensate for elsewhere.  The truth is, improving your retailers’ profit margin is a two-step process: Step 1: Know your average profit margin (and a good margin to shoot for.) Don’t worry. I’ll make this process easy for you, even if you’re not a “numbers person.” Step 2: Implement my 15 proven ways to increase your retail profit margin — no complicated programs or freebies required.  Ready to get started? Good. Let’s dive in. What is retail margin? “If you don’t know your numbers, you don’t know your business.” – Marcus Lemonis So, what is retail margin? If you’re an accounting whiz, feel free to skip ahead. For the rest of us who could use a quick refresher on some bookkeeping fundamentals, here are the numbers you need to grow your business: Gross retail profit margin is the percent of revenue that remains after deducting the cost of goods sold. It doesn’t account for additional operating expenses...