MERCHANDISING NOUN OR VERB?

1. MERCHANDISINGNOUN OR VERB?

2. MERCHANDISNG Introduction: How Does Merchandise Get In Your Store? What Questions Should I Ask Myself When Ordering?

3. OBJECTIVE • Be able to define merchandising

4. MERCHANDISING • Merchandising is being able to: • get the right merchandise (color, size, style,quality,etc.) • at the right time • at the right price • at the right place • in the right amount

5. MERCHANDISNG • Where does it come from? • Who ordered the merch-andise? • Does it sell? • Is it good quality stuff?

6. MERCHANDISNG • How many should we stock? • What sizes should we have? • What does the competition have?

7. MERCHANDISNG • Is it a fad or a trend? • What kind of price are people willing to pay? • Etc. etc. etc.

8. THE JEANS ACTIVITY • With two partners, spend $10,000 to stock a jean store. • Have 5 brands • Cost is $20 each • Identify sizes to be carried • Identify the # of jeans to be stocked in each size

9. THE JEANS ACTIVITY • With a partner, spend $10,000 on stocking a jean store. (Cont.) • Calculate the total dollars spent per style/brand • Present your plan to the class & turn in to me

10. OBJECTIVE • Be able to outline the buying process used by most marketing businesses

11. The Buying Process(OVERVIEW) • Prepare a merchandise plan (Monthly plan of buys for year) • Choose the assortment (color, type, size, variety, etc.) • Find the best supplier (quality vs. price) • Negotiate the order

12. OBJECTIVE • Be able to describe the factors that effect a business’ merchandise assortment

13. Merchandise Assortment Considerations • Image • Brand Policy • Pricing Policy • Merch. Plan • Customers • “Experts”

14. How do Buyers Know What to Buy? • Marketing Research • Customer Contact • Want Slips

15. OBJECTIVE • Be able to define & complete a purchase order

16. Purchase Orders • A business form used to tell a vendor that you want to buy merchandise

17. Purchase Orders • P.O. TERMS: • To • Date • Shipping Date • Via • FOB • (Shipping Point vs. Destination) • Terms

18. Purchase Orders • P.O. TERMS: • Order # • Items # • Description • Quantity • Unit Cost • Total Cost • Total Order

19. OBJECTIVE • Be able to calculate Purchase order terms

20. Why do vendors offer terms? • For Paying Cash • For Paying Early • For Buying in Volume • For Buying Regularly • For Buying Out of Season

21. Sample Terms 2/10 NET 30 • The 2 is the amount of discount available • The 10 is the number of days available to get the discount • The 30 is the total number of days available to pay the bill

22. Sample Terms 2/10 NET 30 • EOM • ROG • Advance Dating

23. Sample Problems Assume a $1,000 purchase dated on 4/1/01 w/ the following terms Due Date Discount = ________ 1.) 5/10 Net 30 _____ 2.) 5/10 Net 30 EOM _____ 3.) 5/10 Net 30 6/1/01 _____

24. Sample Problems Assume a $1,000 purchase dated on 4/1/01 w/ the following terms Due Date Discount = ________ 1.) 5/10 Net 30 5/ 1/01 2.) 5/10 Net 30 EOM 5/30/01 3.) 5/10 Net 30 6/1/01 6/30/01

25. ACTIVITY

26. OBJECTIVE • Be able to complete an invoice

27. INVOICE TERMS • Pieces • Weight • Invoice # • Backordered (B/O) • Unit Cost • Shipping Cost • Tax

28. ACTIVITY

29. OBJECTIVE • Be able to define & complete the following forms: • Bill of Lading • Waybill • Freight Bill • Delivery Receipt • Packing Slip

30. Physical Distribution Forms • Bill of Lading • Also called a shipping order. • Used to request that a transport company come pick up & deliver merchandise. • Serves as a contract • Consignor vs. Consignee

31. Physical Distribution Forms • Waybill • Used to keep track of merchandise as it moves through the “Channel of Distribution” (ex. Fed Ex Ad)

32. Physical Distribution Forms • Freight Bill • An invoice (bill) for the shipping charge • Tells who should be paying for the shipping charge

33. Physical Distribution Forms • Delivery Receipt • Form used to verify that merchandise has arrived • Signed by the buyer

34. Physical Distribution Forms • Packing Slip • Used to compare merchandise delivered w/ what was supposed to be in the carton • Condition, number of items, correctness of order

35. ACTIVITY

36. MERCHANDISNG . Retail Pricing

37. OBJECTIVE • Be able to Define “Retail Pricing” • Assigning a Dollar Value to Goods & Services

38. The Importance of Proper Pricing • Attracts Customers • Determines Sales • Determines Profit • Keeps Up With the Competition

39. OBJECTIVE • Be able to Define the Terms Associated with Retail Pricing: Retail Price: The amount that customers pay for a product or service

40. OBJECTIVE • Be able to Define the Terms Associated with Retail Pricing: • Cost: The amount that a business pays to purchase products to resell

41. OBJECTIVE • Be able to Define the Terms Associated with Retail Pricing: • Markup: The additional amount that a business adds to cost to cover its expenses AND make a profit

42. OBJECTIVE • Be able to Define the Terms Associated with Retail Pricing: • Markdown: A Reduction in • the amount of Retail Price

43. FORMULA RP$ = C$ + M$

44. FORMULA RP% = C% + M%

45. FORMULA(Variations) C$ = RP$ - M$ M$ = RP$ - C$ C% = RP% - M% M% = RP% - C%

46. ILLUSTRATION

47. But What do Business People Generally Know? • Retail Price = 100 % • Cost of Goods (C$) • Markup % (M%) • The Formulas

48. PROBLEM: You’ve Got Apples & Oranges

49. Set - Up RP$ = RP% = 100% C$ = C% = M$ = M% =

50. EXAMPLEWhat can you Calculate? RP$ = RP% = 100% C$ = $6.00 C% = M$ = M% = 40%