Insights about SOLUTIONS for Supermarket Automation – May 2018
WHO’S MANAGING THE BACK DOOR?
A look into the future…. Find out how you can stay competitive with pricing and profitability…
So if you’ve been following our articles over the last several issues you’ve heard allot about time and labor savings with Self Service Checkout, MIMO our magic safe product, and Electronic Shelf Labels.
In this article, we’re going to discuss an ideal place to redeploy some of this “new found” labor to take your business to a whole new level.
FMI research shows that by effectively managing your backdoor – you will save between one and one and a half percent on your DSD (Direct Store Delivery)
volume EVEN with the cost of the additional labor required to manage this.
It is interesting that all the big companies utilize DSD and that around the world (outside of Canada and the US) independents have also adopted back door
management. Why? Because it makes sense and they’re saving money… lots of it.
Gross Margins are impacted by 4 factors:
1. Cost of Goods
2. Retail Pricing
3. Inventory Turns, and
If your vendor is stocking you up before the deal, letting your inventory run down during and deal and then restocking after the deal; guess what – your real gross suffers greatly.
Additionally, when inventory walks out your back door on purpose or by mistake – you suffer even more.
More than ever before, competition defines what the retail price is.
Yes, you can charge a bit more if the location, service level and experience is right.
But perhaps now is the right time to focus on cost and shrink – and there’s no better place than to start with DSD.
Many of you already have everything needed to do it – so why not begin now.
Let’s just say that FMI statistics are way high. Let’s assume for this example that you’re a much better operator than the average independent. For this ROI let’s assume that you’re 3 times better so instead of a net savings of 1.5% on DSD let’s work a simple ROI on one half of one percent of your DSD volume. Let’ look at the ROI.
Our sample Store weekly sales are $150K
DSD sales are typically 33% of your total sales volume so that would be 50K per week
So, .5% of 50K = $2.5K / week = $130K / year. It could easily be double that!
If all Direct Store Delivery saved you $130K per year… Would it be worth it?
Want to know more? Call us now at 1-800-544-8408
We’re committed to providing the finest equipment, professional service, and technical support at affordable prices. When you need us, we’re there.
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