![]() ![]() Net Sales Net Sales = Gross Sales - (Discounts + Returns + Allowances) To learn more, check out this blog post that visualizes how markdowns are taken off of the ticket price to give the sale price. mark them down, to make the products more appealing for the customers. If products are not moving as fast as expected by a retailer, a retailer would typically reduce the price of the product, i.e. Permanent reduction in the price of an item. To learn more about MMU, check out this post on the difference between IMU and MMU. MMU is the profit you generate from an item after all markdowns and discounts have been accounted for. In this case, the maintained markup is a better way to judge the profitability of an item than the initial markup. Products are often not sold at the ticket price, but rather at a marked-down price or with the discount, i.e. The difference between the cost of an item and the sale price. Maintained Markup (MMU) MMU = Ticket Price - Cost of Goods Sold - Markdowns - Discounts MMU% = Maintained Markup / Sale Price * 100 To learn more about IMU, check out this post on the difference between IMU and MMU. IMUs in vertically integrated apparel retailers are typically in the 80% ranges, whereas IMUs for general merchandise within Walmart stores can be in the range of 20-30%. Typical IMU percentages vary drastically between different types of retailers. Going with the earlier example, the IMU% would be ($100 - $20) / $100, i.e. The Initial Markup Percentage gives the same metric as a percentage of the ticket price. For example, if the cost of manufacturing an item was $20 and the product is initially priced at $100, then the initial markup will be $80. Initial Markup is the difference between the initial ticket price of an item and its cost for the retailer. ![]() Initial Markup (IMU) IMU = Ticket Price - Cost of Goods Sold IMU% = (Ticket Price - Cost of Goods Sold) / Ticket Price * 100 This typically comes from the accounting system. The total proceeds of all the sales within a time period. To learn more, check out this blog post that visualizes how discounts are taken off of the ticket price to give the sale price. 20% off for a special promotion or an employee discount would fall under this category. This is different than markdowns, since the price of the product hasn't been reduced permanently or for everyone, but a temporary or one-off discount has been applied. The reduction in price that is applied to a sale at the point of purchase. It typically comes from the accounting system. This is typically the largest cost a retailer incurs, so it is really important that you track this closely. The cost of the inventory that was sold within a specified time period. Cost of Goods Sold (COGS) COGS = (BOP Inventory + Net Purchases + Cost of Labor + Materials and Supplies + Other Costs) - EOP Inventory Average Unit Retail (AUR) Sales AUR = Net Sales $ / Units Sold Inventory AUR = Retail Inventory / Units OH The average amount you've paid per unit of inventory. Average Unit Cost (AUC) Sales AUC = COGS / Units Sold Inventory AUC = Inventory at Cost / Units OH This gives a good sense of the customers' appetite to spend per visit at your store or website. The average amount a customer spends on a transaction. Average Order Value (AOV)Īlso known as Average Transaction Value (ATV) AOV = Net Sales / Number of Transactions APW is an indicator for the rate of sale (or velocity) of a particular item, and can be used to predict how much that item is going to sell in the near future. Number of units sold for an item over a specific period of time. Average per Week (APW) APW = Gross Sales Units/ Number of Weeks The average dollar transaction during a period of time. Sales Metrics Average Dollar Sales (ADS) ADS = Net Sales $ / Number of Transactions ![]() (Pro tip: Keep this page bookmarked so you can get a quick refresher whenever you need!) If you're unsure what some of these terms mean, check out our list of basic retail terms to know to refresh your knowledge. These formulas will help you evaluate your sales and inventory utilization, so you stay on top of your merchandise planning. ![]()
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