Copyright Compupos since 1986
For Sales call us now on +27 (010) 500-4176
For Sales, Call us now on (+27) 010-500-4176
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Not Sales talk - Just talk Let’s turn the clock back a little. In the oldern days, a typical retailer would have a counter & all the goods stacked behind the counter. When a Customer enters, the good retailer greet with a hearty “Good Day” & effortlessly pick the items from his stock behind the counter & place it in front of the customer. Once all goods has been selected & previewed, I might add, he would then proceed with the actual “Sale” by ringing the goods up on his Cash Register by pressing the amounts per item & typically, swing down the slot-machine like arm. This will let the Cash register accumulate the total & present an item amount and a final total at the end of the sale. The customer will then present his gold or silver coins & the good retailer will take a quick bite into these coins to validate authenticity. What is more amazing is the friendship that existed between the retailer & his customer. They know each other. They knew where the other party lived & their kid’s names. They saw each other at all functions & church gatherings. They were close but still customer & retailer at the end of the day. The retailer on his side were also incredible as he knew his products, their prices & ensured that he will actually make a profit on it - even if he decided to discount something. In other words, he knew the cost of each individual product intimately. Let’s forward some years… Today, most retail stores carry thousands of products & has many cashiers. Thousand of cost & selling prices to be calculated & updated. Many cashiers that believe in the Robin Hood concept - taking from the rich (YOU) & giving to the poor (THEM) The MAIN REASON why retailers fail is simply because of the wrong pricing! Secondly, they simply don’t have enough customers. True? Maybe not. Thirdly, but maybe most important - NO CONTROL! No control over their money & NO control over their stock! In other words - back to the scale of justice… Sold Stock = More Money Lets do a little exercise. An investor opens a coffee shop. This generally seems to be a great business idea…. So, lets work backwards. Expected turnover : R50,000 Lets apply the 40 / 40 / 20 principle for restaurants / Food businesses : 40 % of Turnover = Foodcost (Or Cost of Sales for the accountants) 40 % of Turnover = Overheads (15% Salaries, 15% Rent & 10% for other expensses - Gas, Electricity, Cleaning etc) 20% Gross profit (No Capital payback yet, no directors fees…) So realistically, the owner is going to invest R300k + of his own or loaned money in this venture & be lucky to put MAYBE R5,000 in his / her pocket… Clever? So, again - lets look at my earlier statement then. Not enough customers…. R50,000 per month turnover = average of R1,500+ per day. Spend per customer = R35 (Coffee & a slice of cake) 42 customers per day = 9 hour day = 4.5 customers per hour… Yes, we all know they mainly come in for Breakfast, then lunch then dead… But the theory stays true. Do the sums first! In perspective : We did a number of installations for a very big Chicken franchise years ago. Their marketing research was so clever that they knew within a R1,000 what their first day turnover would be! And, their first month’s budget was only R10,000 out on a turnover of over a million! How? They knew beforehand : Number of families in the area, average size of the family average age groups of all people in their scope area. Furthermore they knew their customer’s so well that they know that ladies between the ages of 28-34 mostly choose one of their wraps! Now, this is not a question of hit & miss. This is a gamble that can only win, surely! Lets look at a retail store : (Supermarket, Liquor store, General Traders) You are still chasing the elusive 23-28% GP! 1-2% of turnover for rent 3-5% for salaries Electricity, cleaning, maintenance, cash handling, bank charges, credit card fees etc etc etc! It may sound like doom & gloom, but not at all! As retailers, we just need help, thats all. We need the tools to make these decisions easier. Eg. 1. A matrix system to calculate your selling prices. Furthermore per department! And what about pack size within the    department? (Eg. a different matrix % for 330ml cold drinks vs 2L’s) 2. Ability to show all items running low on stock? 3. Ability to capture or import purchase invoice from suppliers & then to remark / re-price all products?    Also, printing of new price labels? 4. Reorder wizards to calculate reorder levels on the fly. Especially when the seasons change as the cold drink sales     will increase? 5. An easy way of scanning products that will pick up the correct prices? 6. Linking to a scale to update pricing? 7. Promotions to be handled automatically? 8. Multiple pricing structures for our pensioners & what about wholesalers / hawkers? Suddenly the lists goes on & on… (Have a look at our features list - 450 features in 4POS!) So, back to reality! In the current economic climate, we find the following to be true : Allthough turnovers are declining due to many reasons, the overheads & expenses & ultimately the money the trader needs to take home & pay for his own personal expenses stay the same! So, simply put - we need to make the same profit with a decreasing turnover! How? 1. Buy smarter. Get the deals! 2. Attract more customers. 3. Incentivise a bigger basket per customer. Don’t let the customer buy anything anywhere else. The REAL 1-stop shop!     Fruit & Veg, fish, meat etc. 4. Get back to appreciating your customer! (I personally went to a manager once & commented that the quality of the     meat seems to have deteriorated. He replied - are you a butcher? He lost a customer spending thousands a month     with him since that day!) 5. Get your pricing right - a quote from a very successfull retailer : “Surround a low profit item with a sea of profits!”     Eg. surround your cold drinks at a low profit with a sea of expensive chocolates!. 6. Negotiate settlement discounts. 7. Control your debtors - in fact, give them an incentive to rather pay cash! 8. Most important - be innovative! And above all - dont get disheartened! We are all in the same boat. Giving up is not an option! Simply make a better plan! Yours in Retail! markus