ETD: 851 Inventory turns; Software for e-mail newsletter; Cost
Savings Calculators
E-Tailer's Digest
etd_post at gapent.com
Thu Jan 13 11:54:03 GMT 2005
E-Tailer's Digest --- Everything for the Retailer
Issue #0851 January 13, 2005
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
----------------------------------------------------------------
CONTENTS
[1] Greetings
[2] Inventory turns
[3] Software for e-mail newsletter
[4] Cost Savings Calculators
----------------------------------------------------------------
[1] Greetings.
----------------------------------------------------------------
Hi All:
My apologies for some erroneous information I posted in issue 850. The
calculation for inventory turns was wrong. One of our list members said
they were having a debate internally on whether to use retail or cost, when
I went through the details and saw it was incorrect.
List member Dacia Bates has been charged with preparing an e-mail
newsletter for her company and needs some help. I posted some information
and look to list members to add more detail.
List member Jules Kaplan has some cost savings calculators for you to use
with your technology solutions. Check them out.
Tell us about your business, which will remain for posterity at
our "Members: Who Are You?" site. This is a courtesy to our members who
contribute to our forum, and not merely a way to advertise for free.
Anything to do with the retail world, i.e., supplier, retailer, consulting,
etc. http://etailersdigest.com/resources/members/index.htm And we have a
form there for you to tell us about you. As I said when I first proposed
this idea, we have "known" each other for a long time, yet we often don't
know anything about each other. So, tell us who you are and what you do.
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem at gapent.com
http://www.etailersdigest.com
----------------------------------------------------------------
[2] Inventory turns
----------------------------------------------------------------
Please clarify something, if you will. In reference to the accurate way to
calculate inventory turns:
1. Inventory Turns:
Assuming you are turning your inventory 2 1/2 now times a year (industry
average), which is calculated by dividing your annual sales by your average
inventory. With the implementation of a new system, you should see an
improvement to 3 turns, which would result in the following savings:
Current average inventory $4,000,000
Reduced average inventory $3,333,333
Savings $666,667
Inventory carrying costs 10%
Annual savings $6,667
When dividing your annual sales by your average inventory, is that retail
dollars or cost?, in respect to average inventory?
We're having an inside disagreement.
Thank you,
P.S.
Your email newsletter is a MUST for anyone in business wishing to improve
operations & productivity!
Sincerely,
Daphne Engelken
Daphne Spa Retail Development
www.daphnespa.com
831-455-8313
+++ [Moderator's Comments] +++
Hmmm. Actually, I stated that incorrectly. The formula for inventory
turns is:
Current Year's Cost of Goods Sold or Cost of Revenues (found on the income
statement - not the balance sheet)
----------------------------------------(Divided
By)------------------------------------------
The average inventory for the period
The inventory is at cost.
Let's look at an example. Let's say that the balance sheet for ABC shows:
Inventory 2003 - $1,076,000
Inventory 2002 - $1,066,000
On the income statement, the cost of good sold is $6,204,000
To calculate inventory turns, first calculate average inventory which is
equal to $1,076,000 + $1,066,000 divided by 2 or $1,071,000
The number of times inventory turns is 5.79, which means ABC sells all of
it's inventory approximately once every 63 days.
Sorry for the confusion.
Thanks for the kudos.
George
----------------------------------------------------------------
[3] Software for e-mail newsletter
----------------------------------------------------------------
Do you have a suggestion as to what to look for in software to do
an e-mail newsletter? Do you have any sponsors who sell such a product? I
have been a E-tailers Digest subscriber for over three years. I just
started at a telephone, Internet, and cable TV company in their marketing
department. My first task is to start a e-mail newsletter with computer
and Internet tips.
Thanks,
Dacia Bates
+++ [Moderator's Comments] +++
First there are two aspects to an e-mail newsletter:
1. List server software
2. Newsletter content
With the first, you have many choices. First you need an ISP to host your
list. There are companies who will provide this service for
free. However, there is a cost - they include ads in your
newsletters. There are other companies who will host your list, and there
will be a cost, usually per list member.
Check your ISP, to see if they have the capability as part of their
hosting. Our ISP provides us with Mailman, which is a great list
management program. With it we don't have to pay by list member. It is a
free program http://www.gnu.org/software/mailman/
Other programs for list management include the old standard
Majordomo. http://www.greatcircle.com/majordomo/ While it is a bear to
setup, there are a lot of "how-to" guides, and many people who know how to
use it. And it's free.
Listserv is another. http://www.lsoft.com/
You can also use a very simple solution with your e-mail software by using
the bcc option, i.e., setup a "To" address as the name of your list. Then
send to list members as bcc. If you don't include a "To" address you may
have something like "distribution list suppressed" which is a clear
indication that you are sending using bcc. This option does work, and we
use it with some of our smaller lists.
Regarding content, there are two schools of thought with e-mail newsletters:
1. HTML version
2. Plain text e-mail
Many companies block html-coded e-mail. Hence you have a better chance of
success with plain text. And plain text also uses less bandwidth, so there
is a better chance of getting through.
OTOH, for presenting a product, html newsletters obviously tell the story
better, especially with pictures. However, they are also perceived as
spam, and are often blocked.
A compromise would be a short description of the product or service, with a
link to details at the site, which also gets you more exposure at the
site. I'm sure you have seen this approach from many companies.
HTML software can be expensive. One of the leading packages is E-mail
Marketing Director http://www.arialsoftware.com/ who have quite an
impressive client list. There are many other companies who provide HTML
newsletter services and charge by the number of users.
I hope that helps.
George
----------------------------------------------------------------
[4] Cost Savings Calculators
----------------------------------------------------------------
Investment into IT you have to look at your ROI. But there are other
areas, that many business forget about, because the tradition has been
sending out paper statements and invoices and preparing deposits to take to
the bank.
If you automated your account receivable by sending out invoices by email
and fax, and allowing your customers to make payment using Electronic Funds
Transfer or Credit Cards, according to The Aberdeen Group, Boston, MA you
could realize a 60% plus savings over the current system that is being use.
Have developed two different calculators to show you the dollars you can
save by using different methods of either billing your customers or by
collecting funds. Both of these are working in the real world today.
1. Calculate your savings by using online A/R Payment program:
http://www.ezpaymentservices.com/calculator.html
2. ARC is the process of converting a consumer check into an ACH debit. In
an ARC application the check is used as a source document to initiate a
one-time ACH debit against the consumer.s bank account. ARC can be used for
payment items remitted by the consumer through the US mail or via a drop
box. Designed for 1000 or more transactions per month.
For additional information on ARC - Remote Deposit Bank
Teller http://www.ezpaymentservices.com/ARC.pdf
What it costs to process a
check:
http://www.ezpaymentservices.com/arccalculator.html
Many of small to medium business fail to realize that their are major cost
savings in the above IT areas. There are companies that provide this type
of service at a reasonable cost that can provide you with major savings on
your ROI. It is also a learning process. People are comfortable with
their old slippers, but sometime you have to break in a new slipper to use
even if it might bother you for a period of time.
Jules Kaplan
Ez Payment Solutions INC (EZP)
Email: info at ezpaymentsolutions.com
480-991-7025 OR 800-220-0468 - FAX 480-323-2861
----------------------------------------------------------------
Links to follow
----------------------------------------------------------------
GAP Enterprises, Ltd. http://www.gapent.com/
E-Tailer's Digest http://www.etailersdigest.com
Interim Help http://interimhelp.com
Marketing Your Web http://www.gapent.com/myweb/
Automated Press Releases http://www.automatedpr.com
More information about the ETD
mailing list