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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