Profits are about managing your margins and the way you do this is via your POS system

To be profitable it is all about selling your goods for more than you paid for them. This tasks as simple as it may sound is not so easy. The reason for this is that the standard retailer can have 500 to many thousands of product lines and it is a difficult task to price all these items and manage your margins.

Lets look as a standard retail scenario. You have a store full or stock and this stock cost you money to hold because you finance your stock or have to pay your suppliers bill via your bank overdraft or you hve to pay interest to your suppliers if you cannot sell the stock within their 30 or 60 day terms. So what this means is that you need access to information on what stock is moving and what stock is not moving. You then need to use this information to determine your pricing. Stock that is not moving you need to find ways to move it, as it is costing you to have it sit on the shelf. To do this you need to know what it cost you and how much you can discount the stock. Sometimes it is of benefit to sell the stock under costs because of the cost of holding the stock.

ON the other side with the stock that is moving you need to maximise your profits by charging your customers as much as you can while mairtaining as much volume as you can. Now different businesses have different models, some are high turnover low margin and others are low turnover but high margins and then everyone else is some where in between.

Ok so how do I use my POS to manage this process.

Well a good POS system will provide you with reports on what stock is moving and what stock is not. You then need to be able to view the stock that is not movng and be able ot quickly view the current price, the average price and last cost price and then be able to adjust the stock levels. Unfortunatelty many POS systems makes this hard as they force you to drill in to a sinple product at a time to alter it price. One of the benefits of the PBSA POS system is the abiility to view in one screen all the products in a particular category including the sotck level, the cost for the stock, the current price and the eGP and EGP%. Then on this same screen you can adjust the price for multiple items and see the changes to the eGP. This is a very powerful feature fo the PBSA POS system that saves you the business owner many, many hours of hard work.

Managing your pricing levels and margins is a daily process and one that is vital to your success. To do this you need to ensure your POS gives you access to the right reports and the gives you tools to use this information to make adjustments quickly and easily.

I loko forward to providing more detaisl on tricks to managing your margins in future articles on POS and POS systems