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Retail Math Skills are Important for Retailers

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Merchandising Math Handbook for Retail Management

Pick up any retailing, marketing, business management or fashion book and each one emphasizes how businesses rely on financial analysis to meet the shifts and demands of the consumers, the trends, and the marketplace to maintain and improve operational performance. In short, retail math skills are highly prized by almost all employers.

And, in today’s economic climate, staying on top of the numbers is more important than ever!  But, it is equally important to know how to find the financial answers you need, and how to analyze the information too. Again, the ability to effectively use retail math skills is critical.

But, where do you start?

Fortunately, the industry, with stores of all shapes and sizes, catalog shopping, and e-tailing-retail merchants, relies on the same fundamental math skills and formulas to operate their business, no matter what type or size.

In larger organizations, several people may be working on a task, even specializing on certain details, whereas in a smaller organization, one person may have to wear several hats to get the job done.  And, this is true at all levels of the operations.

For example, a sales associate, might be using math skills daily to calculate the discount on a sales item, add taxes, or make change. Or, a supervisor or manager may be using math skills to develop a marketing plan or project sales for a new department. All segments of a business: merchandising, marketing and advertising or even operations, rely heavily on maintaining accurate budgets and financial plans to implement their ideas and strategies.

Simply put, merchandisers consider numbers as one of their “tools of the trade.”

Math for Merchandising, a Retailer’s Handbook, introduces and illustrates the fundamental math skills businessmen and women use daily, in an easy to follow format, in five sections covering:

  • The fundamentals of retail math skills: fractions, decimals, percentages
  • Purchasing and pricing
  • Planning and forecasting
  • Determining profitability
  • Basic business formulas and definitions of key retailing terms

 

Merchandising Math Handbook for Retail Management

Retail Math Skills Are Important

 

The Fundamentals Of Retail Math

Merchandising Math Handbook for Retail Management

Fundamentals of Retail Math

Numbers drive a business.  No one will question that.  But business owners, to make sound decisions,  use fundamental tools which include:

  • basic retail math formulas
  • forms and reports in which the numbers are used
  • technology used to integrate the numbers into logical, easy-­to-use formulas

The basic retail math formulas are driven by fundamentals of fractions, decimals, dozens, and round­ing in order to work with and use percentages as a means of comparison.  For example, in merchandising we speak in fractional terms all the time, but when working out problems, we have to write the decimal equivalent of the fraction.  Most calculators don’t have keys for working with fractions, and software programs like Excel require that you are able to write the decimal equiv­alents of fractions so you can solve retail math problems.  This allows merchants to calculate something as simple as taxes, or the number of pieces of merchandise to transfer or to compare this year’s sales to last year.

Learn more about determining the percentage of sales increases or decreases  just by reading Lesson 1 in the Math for Merchandising Retailer’s Handbook.

Retail Management – Purchasing and Pricing Plans

Merchandising Math Handbook for Retail Management

What should someone pay?  How much did it really cost to make?  Did you ever wonder how much the designer really makes?

All of these are valid questions-ones you can calculate!  That is right, applying fundamental math skills in some easy to use formulas and forms, you can calculate numbers so you have the best information on hand to make the right business decisions.   Continue reading Retail Management – Purchasing and Pricing Plans

Retail Sales – Planning and Forecasting

Merchandising Math Handbook for Retail Management

Business profits are driven by careful planning.  This includes developing business plans that evaluate and forecast:

  • sales, working with the sales volume, or net sales
  • stock, including stock-to-sales ratios, average stock, and turnover.
  • markdowns (stock reductions)
  • purchases both at retail and at cost

Calculating available purchases, known as the  Open-to-Buy (OTB), which is the dollars available to spend during a specific period of time, is a constantly changing number that provides a check and balance system to maintain merchandise flow. Continue reading Retail Sales – Planning and Forecasting

Retail Sales – Profitability

Merchandising Math Handbook for Retail Management

No one will question that profits are the name of the game.  So, just what has to be measured to figure out if your business is profitable–and even more importantly, what do you evaluate and how can you analyze what shifts and changes can increase your bottom line.

The simplest of business math skills will help you determine the sales per square foot of retail space and the financial profitability of a business.  If you are operating a healthy business you can see it in the strenght of the sales per square foot and in the details of an operating statement. Continue reading Retail Sales – Profitability