How much does the lack of an anti shoplifting strategy cost your business?
When considering starting your own business, you need to make decisions about a number of things, i.e. type of ownership, financing, location of your business, retail space, pricing, merchandising, advertising, marketing, staffing, etc. The list is long and at times seems endless. You keep referring back to your business plan, update and modify the plan to keep it fluid and up-to-date. The time to open your retail business has finally arrived, the store is fully stocked, your staff has been hired and is in place ready to assist your customers. You have a good accountant and a good banker on hand. You are full of hope and enthusiasm. After your store has been open, you begin to review your sales and your net profit on a periodic basis. Your marketing strategy is working well and your sales are above average, however, you cannot figure out why your net profit is not keeping pace? If your average merchandise item is selling for $15 and your net profit margin is 15 percent, you should clear $2.25 on each item you are selling. You just placed another order of merchandise amounting to $15,000. Your total sales thus far should be about $100,000 with a net profit of $15,000, however, your numbers don’t add up. When you compare the inventory you originally purchased, subtract the total items sold, the remaining balance does not match your inventory count. This difference is called inventory shrinkage. You realize that you need to keep an eye on the inventory shrinkage totals. You are trying to figure out how your inventory loss of 100 pieces of inventory can be explained and/or eliminated. Some items were damaged and needed to be written off. But even after having made this accounting adjustment your inventory shrinkage is still high. Why is that? Then you realize that the inventory shrinkage can only be attributable to shoplifting or employee theft. Having lost 85 pieces of merchandise to thieves has affected your bottom line. If you had sold these 85 pieces, you could have earned an extra $191. Now you are faced with having to make up this inventory shrinkage by having to sell an additional 38 pieces of inventory just to break even. Then you realize that your business plan did not include an anti shoplifting strategy. Where do you turn to learn about retail theft prevention? Granted you only lost $191 in net profit, you still had to pay for the merchandise and thus your cost of goods keeps increasing. An anti shoplifting strategy can incorporate contacting a loss prevention consultant and contracting for consulting services to help you understand your choices in putting an anti shoplifting strategy in place. One should start very early to the cycle of a new or existing business to implement the proper anti shoplifting policies and procedures. For more information, contact us at anti shoplifting or call 1 770 426-0547.