Posted: 11 July 2024

 ![Retailers Need Assistance!](https://www.essbiztools.com/images/zoo/blogs/advisoryservices/advisory-services-news.jpg)

#  Retailers Need Assistance!

####  Advisory Services News - Issue 28

**Good day!**

Welcome to this update on **ESS BIZTOOLS ADVISORY SERVICES NEWS.**

### **RETAILERS NEED ASSISTANCE!**

Retail operations are challenging, and many individuals embark on the “**Retail Journey**” without fully understanding the various issues they will face. Accountants and bookkeepers are not typically trained to handle all the challenges retailers encounter, as these professionals would need knowledge spanning refrigeration, electrical appliances, and various products.

However, in larger retail businesses, internal accountants play a crucial role in key management issues. These include team training and addressing the mix of product volumes and markups, all aimed at achieving the firm's profit target.

We have seen situations where retailers came from environments where internal accountants were involved in pricing strategies. SMEs might be familiar with “**Markups**” and “**Gross Profit Percentages**”. It's crucial for new business owners to understand the difference between these two terms to avoid underpricing products and missing profit targets.

Are you providing your retail clients with a “**Markup/Gross Profit Chart**” that illustrates the relationship between these terms? These charts are available to all **ESS BIZTOOLS MEMBERS.**

Retailers face an ongoing challenge: managing a variety of stock items, each with different markups and volumes. High-volume, high-markup items are referred to as “**STARS**”.

However, to meet profit targets, retailers often need to sell more than just “**Star Products**”.

The next significant category for most retailers is “**Cash Cows**”. These are high-volume products with low markups due to competitive market pressures.

Retailers must stock these items as they often attract customers. While customers are in the store, there is an opportunity to sell “**Star Items**”.

Other stock categories include “**Problem Lines**” – these could be last year’s fashions that are out of favour this year. They usually have lower volumes and reduced markups as people might not want last season's styles.

Then there are the “**DISASTERS**” – who ordered these?? These items typically have low volumes and very low markups, as businesses aim to clear them quickly to recoup some investment. One issue to alert your clients to is “**Automatic Re-Orders On Computer Systems**”. Despite the intention to clear stock without reordering, the system might reorder automatically when stock levels hit the “**Reorder Level**”, resulting in unwanted stock deliveries – an unpleasant surprise for any business.

This is the dilemma your retail clients face. They must manage a mix of stock with different volumes and markups. Planning sales strategies to meet profit targets is essential. Selling only **“cash cow”** items will likely result in insufficient gross profit to meet the business' profit goals.

**ESS BIZTOOLS** has developed the “**Retail Price Calculator**”, which helps Accountants/Bookkeepers provide the advice that in-house accountants offer in larger businesses.

If you are considering offering **ADVISORY SERVICES** to your clients, how many **Retail or Wholesale Clients** do you have? Why not invest 60 minutes of your time by joining us for a complimentary webinar on Friday, 12 July, 2024 where we will demonstrate how the “**Retails Price Calculator**” can help you deliver exceptional **ADVISORY SERVICES** to your **Retail/Wholesale Clients**.

To register for the webinar, please [Click Here](https://essbiztools-au.zoom.us/webinar/register/WN_zLzaKp95Rbi4aDiFKWP-fw)

You can find more details on **ESS BIZTOOLS** by visiting [www.essbiztools.com.au](http://www.essbiztools.com.au)

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