Use Software for Margin Management

Merchandise pricing for optimal margin management is a task where technology can help. But the software is useless unless you use it regularly. Here's advice adapted from page 87 of Making Money Is Not Illegal, Immoral or Fattening about what to look for in this software:

• The ability to easily input basic product information, such as department, class, product group, item code, item description, vendor data, cost, retail price and monthly sales quantities.
• The ability to easily drill down from the product class level towards the item level in order to determine where in your assortment of products you can go to achieve the best bottom-line profit.
• Sets rules for rounding off prices in ways that maximize your profitability on every item sold without losing sales.
• Allows numerous "what-if" scenarios without committing to actually making the changes.
• Quickly calculates the annual and month-by-month dollar and sales percentage impacts of "what-if" changes in pricing.
• Quickly calculates results by store, department, supplier or other ways you categorize your inventory.
• Saves retail pricing strategies so that you can call them up later without needing to recreate the strategy each time your product mix changes.
• Smoothly interfaces with a way to produce bin tags containing the new prices.
• Allows you to see at a glance where the gross profit dollars in your company are coming from as it relates to item segmentation, item price thresholds and item velocity.
• Is backed by a company that has support staff with retailing experience.

As a reference point, all these features are found in Margin Master from RetailerSoft, so you might want to begin your search there.