Terms related to Retail marketing, stores and inventory

1. Retail Terminology
-Sanjeev Kumar Pandit
11/30/2014
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2. Supply Chain Management (SCM)
Supplier Retailer Customer
Parties
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3. Supply Chain Management (SCM)
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4. Supplier and Retailer Relationship - System
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5. Supplier and Retailer Relationship - Buyer
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6. Stores
• Departmental Store
• Wide range of goods
• E.g. Macy’s
• Supermarket
• Wide selling of food and beverage products
• E.g. 7-Eleven
• Special Store
• Specific products
• E.g. Toys “R” Us
• Dollar Store
• Single price store
• E.g. 99 Rupee Store
• Discount Store
• Sells goods at lower price than market value
11/30/2014 • E.g. Aldi
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7. Stores – cont.
• General/Kirana Store
• Small store that stocks a range of everyday items
• E.g. Luci General Store
• Brick & Mortar (B&M)
• Companies that have physical presence and offer face-to-face customer
experience
• E.g. Bhatbhateni
• Online Store
• Sell goods and service over the internet
• E.g. amazon.com
• Mall
• Range of retail shops at a single outlet
• E.g. City Mall 11/30/2014
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8. Store Terms
• Assortment Planning
• Determination of placing of goods
• Promotion
• Attempt to increase the sale of any particular product
• Types:
• Threshold Promotion
• Provide 5% discount on purchase of item(s) having cost greater than Rs. 2000/-
• Multi Buy Promotion
• Buy 2 Get 1 Free
• Mix and Match Promotion
• A comb free on purchase of a shampoo and a oil
• Simple Promotion
• Festival Offer
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9. Store Terms – contd.
• Markdowns
• Reductions from original selling price
• Markups
• Extra amount charged for an item above what the retailer paid the supplier
• Clearance
• Final sale of an item or items to zero inventory
• Employee Discount
• Discount on purchase of item(s) to the company’s employees
• Intercompany Transaction
• Transaction between two companies
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10. Purchase Terms
• Purchase Order
• Commercial document and official offer issued by a retailer to a supplier, indicating
types, quantities, and agreed prices for products/services
• Contract
• Acceptance of a purchase order(requested by a retailer) by a supplier
• Invoice
• Commercial document issued by the supplier to the retailer regarding the sale
transaction and indication of products, quantities, and agreed prices of the
products/services
• Replenishment
• Process of filling up the stock whenever the inventory goes below the minimum
level, in order to avoid stock-out
• PO Breakdown
• Delivery of goods directly to the stores rather than warehouse/distribution center,
even if the PO was requested from warehouse
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11. Cost – Types
• Base Cost
• Initial cost without any charges, tax, discount on item
• E.g. Supplier says Rs. 100/- to the buyer
• Net Cost
• Initial base cost after deducting discount for item
• Base Cost – Discount (100 – 10 = Rs. 90/-)
• Net Net Cost
• The cost after inclusion of taxes
• Net Cost + Tax (90 + 1 = Rs. 91/-)
• Dead Net Cost
• Final cost after adding all expenses and charges
• Net Net Cost + Charges/Expenses (91 + 5 = Rs. 96/-)
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12. Cost – contd.
• Estimated Landed Cost (ELC)
• Cost calculated by the buyer based on the estimated amounts of the item
price, taxes, and the charge amounts
• Actual Landed Cost (ALC)
• Cost calculated based on the actual amounts of the item price, the taxes, and
the charge amounts
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13. Inventory Position Grouping
• Stock on Hand (SOH)
• Goods owned by the retailer
• In Transit
• Goods arrived at discharge point
• On Order
• Goods on approved PO, but not yet been received
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14. Inventory Terms
• Inventory Transfer
• Process by which inventory is physically tracked from location to location
• E.g. From warehouse to shop floor
• Inventory Adjustment
• Correction of inventory or stock records to bring them into agreement with
the findings of the actual(physical) inventory
• Return to Vendor
• Return of goods to the original vendor
• Weighted Average Cost
• Method of calculating Ending Inventory Cost
• WAC =
Total cost of goods available for sale
11/30/2014 푁푢푚푏푒푟 표푓 푔표표푑푠 푓푟표푚 푏푒푔푖푛푛푖푛푔 푖푛푣푒푛푡표푟푦+푃푢푟푐ℎ푎푠푒푠/푃푟표푑푢푐푡푖표푛
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15. Sales – Types
• Regular
• Normal Sales
• Promotional
• Provide offer/discount on sales
• Clearance
• Reduction to zero inventory
• Intercompany
• Sales for the company’s employees
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16. Memo
• Credit Memo
• Document issued by the supplier to the buyer reducing the amount that the
buyer owes to the supplier under terms of an earlier invoice
• Debit Memo
• Notification from buyer to the supplier that tells the supplier that a
debit/payment was made in the supplier’s account
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17. THANK YOU!
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