Calculate Merchandising’s Hidden Costs
Where in the world do you get your stuff?
The items in a retailer’s inventory come from all over the globe through many channels. There’s a hidden cost in merchandising, and that cost is the expense of bringing the product to the shelf. “Landed cost” can include purchase price, insurance, freight, customs duties, taxes, and any other costs related to the journey.
Landed Costs Fluctuate
Because of added cost, merchandise may seem to be less expensive from one supplier but result in being the most costly once it actually gets to the store for sale. These various costs can also fluctuate due to changes in any factor. Political unrest, changes in weather patterns, or new tariffs all may play a part in the dynamic of landed cost estimation. It can be quite complicated, but being able to accurately calculate this hidden cost allows wiser decisions when setting an initial markup or determining retail prices.
Calculations Need The Right Data & Tools
In order to accurately calculate landed cost, there needs to be access to the right data in sufficient quantities and the tools to analyze the information properly. Part of ChainDrive Integrated Retail Management Solution is a Merchandising component that includes a way to calculate land cost estimates with flexibility and accuracy.
The integration with the centralized database allows the user to access all the data concerning that particular vendor. The system’s integrated formula-based land cost calculator then can be used to create as many preset landed cost formulas that are needed, so that each product order can be analyzed accurately. Any changes in situation can be easily included in the calculations, making the assessment of the true cost of the product simple.
Accurate landed cost estimates enable those hidden costs to be factored into pricing and keep the your profit clear, no matter where in the world you get your stuff.