Dear Friends
As longtime retailer one of my favorite training topics are Margin, Net Profit and Market Share (Market Share next week). What do these words mean ? Google says -“Retail margin” is the gross margin a retail business receives when selling goods. It is the difference between retail price and the costs of goods sold.
So then you will ask what is the Net Profit? Thanks Google – Net profit refers to the amount of money left over after various expenses have been subtracted from the total revenue. These expenses can include interest, operating expenses, taxes and more. Net profit is also known as the net income, bottom line and net earnings and is expressed in dollars.
Why are these two thing important? Does not matter what business you find yourself in, these are the two most important business moderators and they have a major impact on each other. Adjusting your margin just a little will improve your gross income, meaning you have more money to pay the bills. Then as the business manager you have to manage the expenses, this in turn improves your Net Profit.
In summary all businesses operate to make a profit, unless you work for a non-profit (like a charity). Driving Sales, managing margin (Selling at full margin) and expenses (not spending, optimizing operations), will improve Net Profits. Don’t forget customer service as this starts the whole process 🙂
Happy trading , Regards Charles
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