ETD: 710 Managing risks; Inventory Turns; Wal-Mart lets Web
shoppers pay by check; Accounting Red Flags; Visa, MasterCard Set New
Fees
E-Tailer's Digest
etd@gapent.com
Thu, 07 Aug 2003 07:04:46 -0400
E-Tailer's Digest --- Everything for the Retailer
Issue #0710 August 7, 2003
George Matyjewicz, Moderator mailto:georgem@gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
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CONTENTS
[1] Greetings
[2] Managing risks
[3] Inventory Turns
[4] Wal-Mart lets Web shoppers pay by check
[5] Accounting Red Flags
[6] Visa, MasterCard Set New Fees
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[1] Greetings.
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Hi All:
The trade show season is coming up in September. For example, there are 80
shows for giftware in September and 33 apparel shows as found on
http://tsnn.com/ Are you exhibiting or attending any shows? If so, a
report on the show would be nice.
I'll be traveling (what else is new) and at conferences over the next 60
days - two trips to the UK; two other shows in US. So, some special
reports would be appreciated. We'll publish anything that would be of
interest to our readers. 1,500 to 2,500 words. And we post it to our
"Special Reports" section of E-Tailer's Digest site, which does get a lot
of visitors. http://etailersdigest.com/resources/Specials/index.htm
Today we have some questions/comments from list members and some resources
that should be of interest to you. Accounting red flags are some things to
look for when analyzing financial statements, or when preparing your own
financials. And, to avoid a class action suit, Visa and MasterCard has
reduced fees on debit cards. However, they are raising the rates for
credit cards.
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem@gapent.com
http://www.etailersdigest.com
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[2] Managing risks
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Bet you thought I was going to write about ERM (Enterprise Risk Management)
or Sarbanes-Oxley eh? Nope. Let's talk about what we are offering
customers - COMFORT. Customers want to feel comfortable when dealing with
you as a retailer.
But, what we are really saying is we are helping customers manage
risks. When two products or services are equal, a potential customer
will choose the cheaper one. What you need to do is unbalance the scales to
ensure that your product is obviously the less risky
choice; that it's worth the money.
How can we charge $300 per hour for consulting work, whereas that kid
straight out of school only charges $25? Simple. We bring experience that
warrants the higher rates. Less risky for the customer.
What does an independent retailer offer that the 800 pound gorillas
don't? Service with a smile. Knowledge. Recently I had a hands-free
phone installed in my car. I went to a local retailer rather than my
wireless company, even though I paid more. Why? The retailer knew his
stuff, and made me feel comfortable. While my wireless company may have
been able to do the job, I didn't want to run the risk of bringing it back
if it was done incorrectly. The staff didn't make me comfortable. I
mitigated my risks by paying more.
Why do you suppose folks search the Internet for items, then find a local
merchant where they can purchase? They can see the product, discuss it
with the retailer and know what they are buying. Less risk.
So, to be successful we don't have to find the products or services that
will make us the most money, nor do we have to offer the lowest prices. We
need to find a way for the customer to manage risks - to be comfortable in
doing business with you.
What do you think?
George
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[3] Inventory Turns
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I just read your paper on inventory turns at
http://www.businessknowhow.com/manage/inventory.htm. I enjoyed it very
much. Do you know where I can find inventory turn data for the mass market
retailers? I am interested in Wal-Mart, Kmart, Target, Best Buy and others.
We manufacturer CD storage products and are preparing sales presentations
to make to the retailers.
Thank you for your help.
Joe Mercurio
+++ [Moderator's Comments] +++
Those are public companies, so you should be able to extract data from
their 10Q's and calculate turns.
If you need some effective consulting help in this arena, let me know.
Good luck
George
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[4] Wal-Mart lets Web shoppers pay by check
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>Wal-Mart Stores announced Tuesday it is accepting electronic checks
> for online purchases, becoming the latest retailer to widen Web
> payment options in an effort to boost sales.
We will be integrating this with eft - http://www.webchek.com/check.php?id=110
Also it will integrate with a shopping cart. They can use this interface
with both the ChekFaxx Software and EFT, which is seamless. We will be
launching this by the end of the month, and in fact I will prepare an
article for ETD.
Will be launching Ezpaymentservices.com on August 15, 2003. Just getting
all of the marketing and collateral material up first.
Jules Kaplan
ChekFaxx Development Co. INC.- E-commerce Payment Solution Provider
Now on Line For EFT Processing www.ezpaymentservices.com
Available NOW http://www.addressmanagerpro.com
Discover how to add your email address to Your Windows Address Book
Accept Check by FAX - PHONE - E-MAIL - INTERNET http://chekfaxx.com
ChekFaxx5 Net Work Version Available Now
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[5] Accounting Red Flags
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Here's some red flags you should know - both when looking at financials for
investments and for analyzing your own organization:
Earnings Problems: Analyze trends in both earnings and operating income.
Significant declines could mean trouble.
Reduced Cash Flow: Use the cash flow statement to check the reliability of
earnings. If net income is moving up while cash flow from operations is
drifting downward, something may be wrong.
Excessive Debt: Pay special attention to a company's debt-to-equity ratio.
While the optimum ratio varies from industry to industry, the amount of
owners' equity should exceed the amount of debt by a significant amount.
Overstated Inventories and Receivables: Look at the ratio of accounts
receivable to sales and the ratio of inventory to cost of goods sold. If
accounts receivable exceeds 15 percent of annual sales and inventory
exceeds 25 percent of cost of goods sold, be careful. This could mean that
customers aren't paying their bills or the company is saddled with aging
merchandise.
Tandem: Inventory, sales, and receivables usually move in tandem because
customers do not pay up front if they can avoid it. Neither inventory nor
accounts receivable should grow faster than sales.
There are others, but these are a start.
George
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[6] Visa, MasterCard Set New Fees
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New York - Beginning August 1, 2003, Visa and MasterCard introduced lower
fees charged to merchants for debit card transactions. The fee reduction
was proposed to avert a class-action lawsuit threat brought by Wal-Mart,
Sears, and others last April. The two bankcards will give the steepest cuts
(up to 70 percent) to merchants with older payment systems, and lesser cuts
(about 10 percent) to merchants with the most modern payment systems. The
latter are more likely to be the big retailers, who are already paying
lower fees. Previously, the bankcards charged merchants up to $1.50 for a
$100 purchase made with a debit card offline, where the customer was
required to provide a signature. Separately, Visa and MasterCard also
announced that they are raising fees charged for credit cards by 1 percent.
Quinn Halford, Editor In Chief
Matthew Kalash, Editor
Gifts & Dec Direct
http://www.giftsanddec.com
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Links to follow
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