Doing Things His Way
I was talking to the owner of an auto parts store the other day. His store is in a town of about 5,000 and is very profitable. He remains profitable because he is constantly changing his business to deal with the changes from his competition. In the same town was a store owned by one of the large program groups. The program group corporation took over the store a few years ago from some partners that couldn't make a go of it. A few years later the corporate store closed. I must assume that the store was not making money for or the corporation would have kept it open. After the corporation closed the store, representatives of the same corporation contacted the owner of the profitable store. These representatives tried to convince the store owner to take over the failed store or to convert his profitable store into their program group.The whole idea is insane. Twice people have tried to make money running a store the way that the program group says to run a store and both times they failed. Now they are asking somebody who is making money doing things his way to change and do things their way. That means that will tell him that he must spend an incredible amount of money on one of their signs boosting their business image. They will tell him what parts that he must buy and what items that he can't sell. The will tell him how to lay out his store. They will offer him many add on options from the corporate plan all of which cost big bucks. They will force him to buy their store POS system which makes it easier for them to control his business. Every one of these things that he must do limits his ability to make more money. To be fair, for every store owner that does things his way and prospers there are more that fail and they usually fail quickly.
Labels: changing a business, doing things his way, insane decisions, Program group, Store POS System
Special one time orders
A common special one time order is the yearly order for lawn and garden items. Come spring time when love is in the air you had better have sent in your spring order for lawn and garden items long ago. Otherwise, you are going to take a beating on freight charges. A first cut for ordering a part number is to order what you sold last year less any that might be left over from last year. The next step is to look for lost sales on the item and to maybe order more to cover any lost sales on the item from last year. You also have to look for supersedes and order the new part number if the old one has been superseded. Your STORE POS SYSTEM should have all of this information immediately available for you in a format that your supplier can use. Finally, you have to look at your latest bank statement and figure out what you can afford to order.
Another type of special one time orders is as follows. A wholesale supplier may offer their customers special prices on fast moving items with an extended payment schedule. For example, they might offer a 10% discount on some minimum purchase of lighting items and the terms might be 30-60-90. That is, you pay 1/3rd in 30 days, another 1/3rd in 60 days and the final 1/3rd in 90 days. Assuming that you don't have plenty of extra cash, you want to make sure that you sell what you ordered before the 90 days is up so that you can afford to make those payments. Here again you would look on your STORE POS SYSTEM at the sales of the specially priced items over the same 90 day period last year. Depending on your financial strength and sales outlook, you might order more or less than you sold last year.
Labels: lost sales, sales history, Special one time orders, Store POS System
Buying a Cash Receipt Printer
Invoices are a cost of doing business. However, you might want to think about also using paper tape receipts for cash customers. It is a simple calculation to figure out if adding a paper tape receipt printer to your STORE POS SYSTEM is a good investment. When all is said and done, you have to figure that you will spend about $300 to buy and install a paper tape receipt printer for cash sales. Beyond that your expense for paper tape is nil compared with invoices. You take the price of your invoices in pennies and divide that into 30000. For example, if you pay $.02 for each of your invoices then you would get 30000/2 = 15000. That tells you that you would need to run 15,000 cash receipts to make the printer pay for itself. Since any STORE POS SYSTEM will tell you how many cash invoices you run in month, it is simple to figure how many months it will take for the cash receipt printer to pay for itself.
Labels: invoices, paper tape receipts, Store POS System
Selling With a Smile
There is a lyric for an Eagle's song that goes something like "Some women know how to open a door with just a smile." These same women can do wonders selling with just a smile. In particular I think about an associate that owned and operated an auto parts store for several years. She had a woman working for her that had a special talent selling with just a smile. Even now some 25 or so years later she talks about this woman's ability to sell. When a man walked in the door of the store, this woman had a talent for estimating how much money he had in his pocket. She made it her goal to take every cent of it. What is more, she did it and the man walked out the door a happy customer and a smile from the woman. Often she was able to sell at list price. Of course, she was allowed to set the selling price on their STORE POS SYSTEM at the time of sale.
There are a couple of other out of the ordinary selling situations with women that I can remember. One woman would lean forward on the counter when talking to men. She got a lot of attention and brought in many regular customers. However, sometimes that attention can cause problems. One parts store had a young attractive woman delivering parts to repair shops. When she arrived at a repair shop, all work stopped until she left. That was all well and good until the wives of the repair shop owners noticed this and complained to the parts store owner. The young woman was soon history and the replacement driver was a pleasant lady in her 60s.
Labels: Selling to men, Store POS System, using a smile to sell
Watching out for problems
The other day an associate was telling me how she looked for problems when she owned an auto parts store. She scanned the daily summary from her store POS system examining the gross profit margin for each invoice. Those invoices that are below or above the threshold that she established for her business were a concern. She looked closely at the items on the invoice, the customer that made the purchase and the clerk that ran the invoice. Sometimes a low profit margin was related to a pricing error, an employee giving a friend a price break at her expense or the customer received a rebate. Rebates are a necessary part of business for some products and hopefully your store POS system will account for your rebate when computing your daily gross profit margin. Also, store POS systems will often tag invoices on the daily summary when a sales clerk sells an item at a price different from what should have been priced to that customer. Tagged invoices beg for your attention. Scanning through invoices on a regular basis is not fun, but it helps you stop small problems from becoming big problems.
Labels: daily summary, gross profit margin, Store POS System
Keep Control While on Travel
Many store owners or managers want to control their store even when they don't show up for work. It is easy to do and the cost is minor. This can be a real godsend for those that have to be gone for health problems, family matters, long overdue vacations or whatever. You only need a fixed address for your internet connection, any of the widely available inexpensive software packages designed for this application, a laptop computer and an internet connection where you are staying while away from work. The biggest expense is the laptop and there are many new ones that are under $400. If you want to print reports, you will have to bring along a printer and you can get good new laser printers for under $130. Be sure to save the boxes so that you can ship them to your destination with minimal hassle. Most hotels and motels, many restaurants and even airports have wireless internet connections available. Sitting in your home, hotel room or vacation home you can use your Store POS System to do almost everything that you could if you were sitting in your office working on the computer. The one important thing that you can't do is to remove your backup media and put it in a safe place. Hopefully, an employee will do this for you. Oh yes, the users that I know of that manage from remote locations have not had any problems with computer viruses. However, one would do well to resist the temptation to surf the web on either your server computer at the office or your laptop for remote computing.
Labels: backups, computer viruses, Manage while you are gone, Store POS System
Another Different Way to Make Money in the Parts Business
Something that I have seen on a few occasions is people opening a store with the intent to sell the store once they have turned it into a profitable business. Essentially they are banking on their superior business skills to allow them to create a thriving business where many others will fail. Of course, some of the success of these ventures came from the real estate boom over the last several years. However, they study the area where they are going to build their business and do their homework in order to find a good location at an excellent price. An important part of the plan is to have sufficient money to buy the land and building for their needs. That fixes a major part of the cost to do business even before they open their front door. Next they work on containing the daily costs to do business. Their buying decisions for the products that they sell are based on quality and price not on convenience. They may buy from as many as a hundred or more suppliers. They work hard to keep their expenses at a minimum. They work with a minimum number of employees, they have a minimum number of phone lines and cell phones, and they keep their Store POS System cost to a minimum. You name it and they spend the minimum amount that they need. They are usually knowledgeable in the business that they plan to open. In these days most auto parts stores are struggling to survive. However, I have seen a person with no experience in the auto parts business open an auto parts store and turn it into a money making business. He paid good wages to hire people with experience in the parts business to teach him the business. Most important, he knew how to run a business. I hate to say it but it seems clear that in the parts business, knowledge of the parts business is not nearly as important as management skills.
Labels: containing costs, Parts store, Real estate, Store POS System
