With SME retail’s core capability scattered across a number of different apps and applications, the focus has been firmly on front-of-house capabilities such as SEO, abandoned carts, upselling, cross selling, driving site visits and conversions. This is all great and absolutely must happen.
The back-office has not attracted the same degree of activity, glamour and hype. And with good reason; It’s invisible and it’s boring. But as with many boring things; blood pressure checks, MOT, cash flow statements, it’s vital to the health of your business. Pricing is a key activity.
The price tag determines the margin that your business is operating at. In short, how you price, determines whether you can pay your bills, so you see, pricing up merchandise needs to have a bit of thought behind it.
Imagine you had a long list of all product you sold in your store, organised by category. Each product within the category will have it’s own price and the average price will vary across the different categories within the business.
If you were asked what your average selling price per category was, would you;
- Know and answer immediately?
- Need to ask your accountant?
- You don’t have an accountant and you just hope that by driving more and more sales you’ll mask over the need to be strategic with pricing and margins.