Generally, increasing sales and reducing retail costs are two objectives adopted when it is necessary to organize accounts or improve the profitability of a business. Another option is to seek external financial assistance. However, among these alternatives, reducing expenses is usually the option that depends most directly on the company itself.
In this article, we have listed five tips that can help you achieve this purpose, that is, reduce the costs of your retail business (pet shop). Keep reading and check it out!
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Set up good financial planning
The first thing to do is to set up good financial planning, which should include both revenue and cost forecasting. In this case, revenues, expenses (fixed and variable) and future investments need to be estimated.
They should also be described, if possible, in detail. This will help you understand which items are most important to the company and which can be cut.
Furthermore, this plan allows us to understand in which actions, sectors, processes, etc., more resources are spent, which helps to identify what can be cut or reduced. It also prevents mistakes from being made by eliminating costs of processes that already operate efficiently and with the appropriate investments, while others that need adjustments are unchanged.
Partner with good suppliers
- Having good suppliers is essential not only to obtain quality products, but also to ensure minimum quantities of these items in stock. In other words, when you have a reliable and integrated partnership with your purchasing sector, it is possible to prevent a shortage of goods.
- Otherwise, a customer looking for a product and not finding it tends to be frustrated. Soon, you will be able to purchase products with the competition. In addition, by maintaining a lasting relationship, you will be able to negotiate more with prices and terms.
- Another important point is that, with quality products, losses of stored goods can be reduced. In fact, in the area of pet shops, in which medicines and food are sold, it is necessary to be extra careful with expiration dates, durability of goods, resistance of packaging, etc.
- Therefore, choosing a good distributor is essential. In fact, know that Matsuda Pet is the best option when it comes to pet food!
Optimize inventory management and operation
- Inventory management needs extra care, since poor product conservation, disorganization, lack of criteria for classifying items, etc. can cause waste, loss and damage to products. In other words, extra costs for the business.
- Therefore, invest in improving the management of your deposit and also value your good operation. One tip is to adopt a product classification system to optimize the turnover of goods.
- For example, the PEPS method (First in, First out). This means that items that reach the stock first are also the first to leave the stock. This approach reduces the chance that the goods will run aground and their expiration dates will expire, generating financial losses and losses.
Make purchases in advance
- Another tip is to buy products in advance to get discounts and to be able to negotiate the adequate supply of your warehouse. This is important close to times when sales go up, when you cannot run out of goods.
- In those moments, to supply your stock, you may have to buy more expensive products, generating extra costs. Therefore, schedule your purchases in advance and try to buy large volumes to supply your pet shop for a longer time, if possible. When purchasing a larger quantity, the possibility of getting a discount increases along with it.
Reduce or eliminate unnecessary expenses
- It is important to identify the company’s expenses to reduce unnecessary costs and expenses. Keep an eye out for small purchases that, taken together, can significantly impact your business finances. For example, office supplies and cleaning products from the pet shop.
- See if everyone is really needed and if you’re not buying more than you need. Also try to reduce your consumer bills, such as the Internet. Assess whether your package is suitable for the company’s web connection needs or if you can adhere to a more affordable plan without affecting business activities.
- Reducing retail costs is a task that requires patience and discipline, in addition to good initial planning. This is because you must analyze what can be saved considering that the efficiency of your pet shop cannot be compromised. After all, it is vital to have efficient processes to provide good service and also to increase sales.
- By the way, see also 5 marketing tips for pet shops that can help you close more deals!