By
Bob Phibbs
They say you must spend money to make money, but saving money also makes money.
In retail, cost savings are just as important as marketing expenditures. If you do the first one correctly, you'll have more cash to spend on advertisements and things that will attract new customers.
If you're spending too much money on day-to-day store operations; however, you're eliminating cash flow from other areas that would otherwise increase your business.
Here are five cost-saving initiatives that can help your retail business break ground for new opportunities:
1. Eliminate Paper
How much money does your company spend on receipt paper each year? If you're like most retailers, then paper takes a huge chunk out of your office supply budget.
Imagine how much money you'd save if you weren't tethered to your printers with each transaction. By going paperless, you can easily email customer receipts and eliminate excessive costs associated with paper, ink, and printer repairs. As an added bonus, you can collect information to make more headway when you launch new campaigns.
2. Go with an Outside Delivery Service
If you're doing your own local delivery, you may lose money by not having your store staffed properly. Instead of sending your people out on the streets delivering the goods and services, consider working with an outside service specializing in local delivery. While you'll likely be required to pay a fee for joining the service, your team members can do what they do best while ensuring you deliver top-notch products and services to the people who want them most.
3. Reduce Shipping Costs
Whether you're operating a big box store or a local neighborhood shop doesn't matter. You need to be able to send items to your customers efficiently.
Look at how you're sending items now, and evaluate other options. You may save ample cash if you reduce the size of your packaging or work with a different delivery agent.
Cost-cutting examples would start by removing space-filling voids and eliminating excessive materials. The smaller the package, the less you'll pay for shipping.
4. Renegotiate with Your Vendors Annually
You might be surprised that your current vendors can offer you additional savings. Put a reminder on your calendar to call each vendor once a year to see if they have other plans to save you money. Of course, they're not just offering you savings, so you won't know unless you ask.
If your current vendor can't budge on the pricing, consider shopping around with their competitors. Here are some types of vendors you should be looking for cost-cutting measures from:
- Healthcare plans for your employees
- Shipping companies
- Janitorial services
- Advertising
- Internet, telephone, and cell phone providers
Although you're doing everything you can to be the best business for your customers, don't forget you're also a customer. Companies will likely do anything they can to retain their relationship with you.
5. Put People Where They Make a Difference
On a busy day, you might think you need 30 people to take the lead to ensure every customer is properly cared for.
This isn't necessarily true. You have a lot of brilliant people who can perform four or five roles if you position the schedule right. Take the time to map out your schedule so that newbies are next to seasoned pros. This will allow you to make the most of your payroll without having too many people on the floor.
It's important to facilitate hands-on training without impeding regular business flow. When you partner inexperienced staff members with leaders during busy times, your green team can learn from the best as they encounter real-life problems, understand how to troubleshoot awkward occurrences and take advantage of money-making opportunities.
It's all about putting people into the right places so that they can assist your customers at brand-new levels.
By the way...
Are you feeling at a loss when it comes to creating cost-saving initiatives that don't interfere with the awesome plans your operational team has put into place? You're not alone!
The Retail Doctor offers consultations to help your team deploy cost-cutting savings that work for your entire company. We invite you to learn how an expert retail consultation can enhance your company today!
