Windward Insider Blog
12 Feb 2014
Are your prices UNSAFE?Do you feel confident in the prices that you are currently selling at? Are they making you the margin you expect? Our clients often get surprised to find their margins were worse than they thought. And their costs did not accurately reflect costing updates from their suppliers, accurate freight or even currency fluctuations. If you suspect you could be experiencing margin erosion, continue reading... It is common practice to set prices and then your business gets busy and you forget to revisit your pricing. There are lots of reasons to miss this simple detail. On a first price increase from a supplier this may be just a few dollars on a few items and you may want to avoid customers complaining about prices or the work to adjust your inventory. What is easy to forget that as you turn your inventory a few dollars each inventory item is mounting to thousands or even tens of thousands in a year. As gas prices have gone up this has raised the cost of freight, also raising your landed cost. If you purchase out of country currency fluctuations could be silently increasing your cost. Sometimes it is just the sheer amount of time to do a price update in software that keeps it from getting attention. What compounds the problem which owners forget is sales clerks may be further discounting to win business from an already eroded price. How do I tell if I have this problem? Ask your team the following questions.
- Do you apply all cost updates from your suppliers?
- Do you include freight in your landed cost to price your inventory?
- Do you have limits on what a sales clerk can discount to?
- Do you regularly spot check to ensure no mistakes on cost or pricing has taken place?
- Do you buy inventory in a different currency and pay for it over several payments at different currency rates?
- We make applying price updates easy and we include the technology and training to show you how to do this yourself. Many software solutions charge you for this service. We certainly can charge you if you like, but include the training at no additional fee for you want to learn this yourself.
- End of day reports show you the average margin made on each transaction for that day. This is a great area for a owners and managers quickly spot check and ensure inventory is not being over discounted or if data entry errors caused incorrect costing. One of our clients shared after placing a group of inventory on sale, they quickly caught they were selling a $70 item below their cost as the retail price had not been adjusted to reflect a price increase.
- Our fast price adjustment utility allows you to globally updated cost and selling prices by category, supplier, brand. We even support marking up low cost items more than larger costing inventory. Even round to the nearest .99 cents. We had one customer share that changing their prices from .97 to .99 would make their business $8,000 more in a year based on their volume.