5 Cost-Saving Initiatives Your Retail Operation Must Have
By Bob Phibbs
They say you have to spend money to make money, but you also have to save money to make money.
In the retail world, 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 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 in receipt paper each year? If you're like most retailers, 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 customers receipts and eliminate excessive costs associated with paper, ink, and printer repairs. As an added bonus, you can collect information that will enable your you 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 be losing 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 that specializes in local delivery. While you'll likely be required to pay a fee for joining the service, your own team members can do what they do best, while ensuring you're delivering top-notch products and services to the people who want them most.
3. Reduce Shipping Costs
It doesn't matter if you're operating a big box store or a local neighborhood shop, you need to be able to send items to your customers efficiently.
Take a look at the way you're sending items now, and evaluate other options. You may be able to save ample amounts of 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 eliminate excessive materials. The smaller the package, the less you'll pay in shipping.
4. Renegotiate with Your Vendors Annually
You might be surprised to find that your current vendors can offer you additional savings. Put a reminder on your calendar to call each of your vendors once a year to see if they have other plans that would save you money. Of course, they're not going to just come out and offer 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
Internet, telephone, and cell phone providers
Although you're doing everything you can to be the best business for your customers, don't forget that you're also a customer too. 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 in order 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, such 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 the flow of regular business. 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 and gain an understanding about how to troubleshoot awkward occurrences and take advantage of money-making opportunities.
It's all about putting people into the right places so they can assist your customers at brand new levels.
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, which can 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!
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