You’d think pet shops would do well, even in a tough economy. Our dog or cat is a family member and a comfort while we’re stressed. But we find that their owners are cutting back, and going to grocery stores and discount stores to save money. How do you, the independent pet shop, compete with those high volume discounters?
Invest in a good POS system for your pet store. Then you can better manage the two critical areas affect sales and profits – inventory and customers!!!
With a good Pet store POS system, your inventory becomes lean and mean. You continue to meet customer needs, and at the same time, tighten your inventory, free up cash, AND improve your margins!
A good POS system will show you exactly where you stand financially: gross profit by item, by department, by vendor, and very important, contribution of these areas to overall store performance. You’ll be able to compare this year to last year, and pinpoint the areas that need closer management. Sometimes we don’t want to look too closely. “If we have enough to pay the bills, we’re okay.” Good point of sale software will give you daily, weekly, monthly and year to date sales and profit reports!
A post holiday survey of pet shops was grim. Some shops had sales figures that were level with last year. The few with increases attributed their success to more closely watching their inventories, and more effort reaching out to their customer base (and yes, they used point of sale). However, far more shops had a bad, rather than good holiday season. Reports described sales down by 16-22%; even annual, expected sales activities, like those huge annual pre-Christmas fish tank sales were way off.
INVENTORY, DEPOSITS AND GROSS PROFIT – HOW DO THEY FIT?
Pay rent, pay taxes, pay employees, pay heat – they all come out of your sales. Will you have enough to restock inventory? It should be the other way around. If you’re paying your bills first, then replacing the inventory that sold, you may find yourself in trouble. Your inventory is your working capital, and you have to treat it with care. Too much, and you are cash poor, too little and you’ll run your sales down.
Do you know what your average gross profit margin is? Today, this week, this month? That’s how you pay your bills – rent, payroll, advertising. The other part of sales is cost of goods sold – and that’s just a fancy name for merchandise you have to replace!
You can control both sides of this equation, if you know what your store is doing. Profit-wise, what are your strong items, your strong departments? Your POS system will show you those profitable departments, and then you let your sales history ranking take over. What does your sales history tell you? A good Pet store POS system will identify your best sellers, and your worst sellers. You’ll raise the prices (by pennies and dimes) on your best sellers – even that improves your gross profit, and you’ll eliminate those bad sellers, using that cash (no, not to pay bills) to put into the kind of merchandise that sells!