This time of year, retailers are busy with sales, moving old stock to make way for new lines. Plenty of product is heavily discounted. Our Point of Sale software carefully tracks the real margin achieved from each sale. This is crucial in measuring margin contribution by item and supplier. We see gross margin is the most crucial metric in retail.
While many retailers can rely on markup formulas to manage margin, it can become compromised by sales and other strategies. Gross margin is vitally important and needs to be tracked. It flows directly from sales, it’s the best indicator of profitability and cash flow, it’s the dollars from which a business covers expenses, and it is the best measure of productive or valuable inventory investment is.
We understand this and track margin accordingly. It is reported in many of our reports – to help guide better business decisions. We back access to the information with training on how to use this to improve the business.
So, in the current sale mode, while volume is good, keeping a watchful eye on margin is mor important.