This document discusses merchandise management. Merchandise management involves planning and implementing the acquisition, handling, and monitoring of merchandise categories for a retail organization. It focuses on planning and controlling inventories by balancing financial requirements with purchasing strategies. Effective merchandise management requires competent decisions about what to buy, how much, and when, as well as acquiring merchandise from wholesalers or manufacturers and handling it properly. Inventory levels must be planned and calculated using various methods to ensure adequate availability and returns.

1. Merchandise Management
Dr. Gopal Thapa
Tribhuvan University

2. Merchandise Management
 Goods well bought are half sold
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3.  Merchandise is the goods which are for sale or
which have been sold
 Dictionary of Marketing
 Development and implementation of a
merchandise plan is one of the most important
phases in any retail strategy
 In order to be successful, retailers must make
competent decisions over what is to be bought, in
what quantities and at what time.
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4. Merchandise management
 Merchandise is the goods which are for sale or which have
been sold
 Dictionary of Marketing
 Merchandise management is the planning and
implementation of the acquisition, handling and
monitoring of the merchandise categories for an identified
retail organization
 David Gilbert
 Merchandise management is the analysis, planning,
acquisition, promotion and control of merchandise sold by
a retailer
 Dictionary of Marketing
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5. Merchandise management
 Merchandise management focuses on the planning
and controlling of the retailer’s inventories.
 The role as to balance the financial requirements
of the company with a strategy for merchandise
purchasing.
 As merchandise has to be acquired for future
purchase opportunities, forward planning is
needed in relation to changing consumption tastes
and demand
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6. Merchandise management
 There is a need for acquisition from either
wholesalers or manufacturers and for the
merchandise to be handled in an appropriate way
to ensure it is able to be sold in perfect condition.
 As the financial aspects of buying merchandise
can be treated as an investment decision, there is
the final aspect of monitoring all aspects of the
process to ensure adequate returns are achieved
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7. Category
 A category is an assortment of items that the
customer would broadly perceive as being
substitutes for each other while reflecting the
extent of possible variants.
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8. Availability
 Availability is an important concept
 Availability is based upon the need to ensure that
the level of stock required meets the demand from
the customer
 The notion of availability introduces a need to
manage the reorder cycle on an efficient basis
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9. Inventory Turnover (Merchandise
Stock-turn)
 Inventory turnover concept allows us to work out
how long inventory is on hand prior to it being
sold
 Inventory turnover
= Net sales
Average inventory at retail store
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10. Methods of Planning and
Calculating Inventory Levels
 Basic stock method of planning inventory
 Percentage variation method
 Week’s supply method
 Sales to stock method
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11. Basic stock method of planning
inventory
 Beginning of the month stock (BOM)
= Planned monthly sales + Basic stock
Where, basis stock = (a) – (b)
(a) Average stock for season
= Total planned sales for season
Estimated inventory turnover
(b) Average monthly sales
= Total planned sales for season
Number of months
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12. Percentage variation method
 Beginning of month planned inventory level
=Planned average monthly stock for season ×1/2
[1+ Estimated monthly sales ]
Estimated average monthly sales
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13. Week’s supply method
 BOM Stock
= Average weekly sales × No. of weeks to be
stocked
Where, average weekly sales
= Estimated total sales for the period
No. of weeks
No. of weeks to be stocked
= Number of weeks in the period
Stock turnover rate for period
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14. Sales to stock method
 Shrinkage
 Mark down
 Employee discount
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15. Merchandiser Skills and Profile
 Effective communicator
 Interpersonal skills
 Advanced numerical capacity supported by PC
literacy
 Administrative competence
 Relationship with buyers
 Budgeting
 Planning and controlling retail activities
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16. Managing variations in demand
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