Kevin Jones, who runs a shop in Hawarden, Clywd, has identified another tricky detail when the VAT rate jumps back up 2.5% to 17.5% in January: price-marked stock. In particular he is thinking about tobacco products, where the margins are already thin.
Obviously, stock management from now to December will need to be good. Cigarettes are a product with a relatively high stockturn (you need to be sure that you sell through all your price-marked stock), which means that planning your buying ensures you avoid problems.
Risk management requires planning ahead and attending to the detail so that you avoid losses. It doesn't increase your wealth but it simply has to be done.
Obviously, stock management from now to December will need to be good. Cigarettes are a product with a relatively high stockturn (you need to be sure that you sell through all your price-marked stock), which means that planning your buying ensures you avoid problems.
Risk management requires planning ahead and attending to the detail so that you avoid losses. It doesn't increase your wealth but it simply has to be done.
We don't stock price marked cigarettes and drive price to give us the margin we want.
ReplyDeleteSeveral years ago we were offered gantery planning support from ITL and when their field planner came to visit he asked why we were selling at recommended retail prices. He felt that we should up our prices as from his experience most customer would not notice.
So we did and have been increasing our margin regularly since then to positive effect.
I think that you have a valid point about your strategy for selling tobacco products. However, I am also aware of retailers in different locations who use price-marked packs successfully.
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