Key Indicators

Some Retailing Issues Are Basic:

• Who to target?
• What to sell?
• How to sell?
• Price vs. trophy hunting
• Instilling a merchant culture

Clear, long-term vision is essential when the outlook is cloudy.

Margin:Key to Profitability

• Retailing margins are low (< 2 %).
• Costs are high...
• But risks are integral to profit:
  • Price (purchases & sales), volume, credit
  • Back-to-back cover not margin enhancing
• How can margins be enhanced?
• Board-level understanding is essential. Size Matters.
• High set-up costs for systems, business processes, etc.
• Volume is essential (also volume risk).
• For each $100 electric bill
  • $10 average cost to serve customer,
  • target cost to serve of $5.