Choose checkout-shelf products using sales data: check which items customers often buy together. Plan the placement of each product and assess gross margin separately from sales volume.
To assess a store’s net profit, you need to account for business expenses. Sales totals or the profit figure in a product report alone are not enough.
Choose complementary products based on customer purchases
Review sales data and identify products that customers often buy together. You can use these combinations to choose complementary items and create bundles.
Batteries and greeting cards are examples of potential checkout-shelf products. Check whether they match purchases in your store. These examples do not establish a universal product range or expected profitability.
Plan a place for each product
Use a planogram to arrange products: a diagram that defines where each item belongs on a shelf. You can use it to plan the checkout display.
Review and change the display regularly. Do not attribute a change in sales solely to the new product placement.
Calculate gross margin, accounting for discounts and returns
To calculate net sales, account for deductions: returns, price adjustments, discounts, and reimbursements of part of the price.
Gross margin, % = (net sales − cost of goods sold) ÷ net sales × 100.
Calculate the metric for the selected products. Use net sales and cost data for the same period. If net sales are zero, this formula does not produce a defined result.
If you offer a quantity discount, check its economics. A poorly designed quantity discount system can lead to selling products at a loss.
Keep product metrics separate from net profit
Gross margin accounts for the cost of goods sold. To calculate net profit, you also need to account for operating expenses, interest, taxes, other expenses, and other income.
Net profit = total revenue − cost of goods sold − operating expenses − interest − taxes − other expenses + other income.
Examples of operating expenses include rent, utilities, administrative staff salaries, marketing expenses, and equipment depreciation. The formulas shown are business metrics for analyzing store performance.
Check sales and stock in Torgsoft
In Torgsoft, you can generate a ranking of best-selling products for a selected period. Use it to review sales of items you are considering for the checkout shelf.
The profitability analysis of a goods receipt shows the remaining stock, its value at purchase prices, sales, returns and discounts, revenue, and profit. This data lets you review the sales results for products from the relevant goods receipt.
The profit figure in this report should not be equated with the net profit of the entire business. Assessing that requires data on other expenses and income as well.
Description of verified tools: store sales analysis in Torgsoft.
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