Fashion buying is a function in fashion retailing, where buyers pick and choose the products the retailer will carry in stores for the next season. It is one of the most important retail functions, because it directly affects sales, margins and overall profitability and success of the retailer. Fashion Buying & Trend Forecasting The way …
Fashion Buying: Definition, Tasks & Needed Skills Read More »
A size curve represents the distribution of quantities of different sizes in the size run a retailer is carrying inventory for. It is a relationship expressed in relative numbers. For example, 1:2:2:1 would mean that for each 1 piece of the first size 2 pieces of the second and third sizes and 1 piece of …
One of the most important decisions to make while setting a retail product assortment strategy is making the choice between depth vs. breadth of your assortment. At the end of the day, you have a fixed buying budget that is tied to your sales budget, and now you need to allocate this budget to specific …
Depth vs. Breadth: Retail Product Assortment Strategy Read More »
Retail arbitrage has been around for very longtime, but has come under the spotlight in the last few years with the shift to online selling and with having platforms that facilitated the process and made it easy for anyone to start a retail arbitrage operation on their own. What is Retail Arbitrage? Retail arbitrage is …
One of the points up for negotiation when dealing with suppliers is the payment method. There are different types of payment terms in international trade and here we will list the most common ones used by retailers in their buying. Read also: Types of Shipping Terms What Are The Different Types of Payment Terms? We …
Types of Payment Terms & Their Effect on Cash Flow Read More »
Differentiating between the different types of shipping terms is going to be an important piece of knowledge when you start negotiating with your suppliers. There are many different types of shipping terms used worldwide, but here we will only list the most common ones used by retailers and explain the main differences. Read Also: Types …
Types of Shipping Terms: The Common Ones For Retailers Read More »
Cost of Goods Sold (COGS) reports the costs associated with the products sold by the company. They are reported on the P&L statement as and expense and directly affect the gross profit of the business. Gross Profit = Sales – COGS How to Calculate COGS for a Retail or E-commerce Business? The formula for calculating …
Inventory is usually the biggest asset for retail or e-commerce businesses, and so it is important to be able to measure its ROI and take some steps to improve it over time. One of the inventory metrics used to evaluate inventory performance is GMROI. What is GMROI? GMROI stands for Gross Margin Return on Investment …
Forward stock cover measures how long the current stock on hand will cover future forecasted sales periods. This measure is used in inventory management to ensure product availability and adequate stock on hand coverage. It is also used during the buying budget calculation to ensure the inventory ordered is enough to cover sales for the …
One of the KPIs that you use to analyze your inventory & buying and also the performance of your suppliers is the sell through rate (aka. Sell-thru rate). Sell through rate represents the number of items sold out of the number of items received and is measured for a given period (e.g one month or …
Sell Through Rate: How to Calculate & How to Analyze? Read More »
Private label is a concept in retailing, where a retailer contracts a third-party manufacturer to manufacture their products under certain specifications, and under a brand name that belongs to the retailer. A lot of retailers who sell multi-branded products in their store sometimes opt to private label part of their product offering to realize higher …
Private Label : Definition, Example, Pros & Cons Read More »
Order lead time is one of the things you will come across while evaluating suppliers. It is part of the due diligence process and also affects your ordering process, budgeting and inventory planning as we explain below What Is Order Lead Time? It is simply the amount of time it will take the supplier to …
Order Lead Time: Why Is It Important In Retail Buying? Read More »
Consignment stores are often associated with second hand or old stuff that is being sold by normal people through a store to generate cash or dispose unwanted items. What most people don’t know however, is the fact that the concept of consigning can be applied to normal retail stores, boutiques or even big box retailers. …
Bargaining power is the relative ability of each of the negotiating parties to reach an agreement that works to their own advantage. In any industry, a business will be facing two types of bargaining power: Bargaining Power of Suppliers Bargaining Power of Buyers The higher those powers, the less profitable will be the company, because …
Bargaining Power of Suppliers: How to Reduce it? Read More »
It is very important to be able to differentiate between the different types of gross margin in retail. Most people starting a retail business think about gross margin in one way only, but we will explain here in detail how there are different types, based on the sales process and markdown applied to the products. …
Gross Margin Types: Intake Margin vs. Realized Margin Read More »
This is a complete guide to the OTB (Open-to-Buy) concept in retail
You will learn about:
OTB Definition
Retail Buying Plan Template Components
Open to Buy Budgeting Steps
Importance of OTB
Retail Buying Plan Considerations
Using online tools like Google Trends for product sourcing can help you spot new product ideas that others might still not know about yet. This can give you a competitive advantage in today’s hyper competitive retail & ecommerce market. In this article we demonstrate with examples, how to use such tools in your product sourcing …
If someone asked you what do you think is the most important function in retail? what would you say? “Sales!” Right? That’s probably what 90% of people would say. From our long experience in this industry, we have come to the realization that a function that is working behind the scenes exerts the biggest influence …