From the blog 3 Proven Methods for Raising Candy Store Profit Margins
Retail business owners should always be actively working to improve profit margins. Candy and sweets are high-margin products, making the market extremely competitive. National convenience stores, online retailers, and fellow brick-and-mortar shops are all fighting for the $20 billion spent each year on sweets. Even if your store posts strong profitability, you should keep working to maintain and improve your numbers to be prepared for unexpected market changes. These 3 proven methods for raising candy store profit margins will either add to your business’s cash flow or lessen outgoing costs, improving profit margins.
Online and In-Store Marketing
Social media’s popularity has changed the way businesses market themselves. This is especially true for independently-owned companies with limited ad budgets. Using Facebook, Twitter, Pinterest, Instagram, and other social media channels you can connect your candy store with a massive audience of potential customers. What sets social media marketing apart from traditional advertising is the ability to directly engage with your customers. Keep your accounts updated every day by pinning weekly deals to your Facebook Wall, Tweeting about daily specials, and offering incentives to customers who follow your accounts or share your posts.
Your candy shop also needs an informative and attractive website. Your site serves two functions: as a resource for consumers to learn about your business and as a marketing tool that raises your online visibility through search engine optimization (SEO). Your candy store website should include basics about the shop, such as hours of operation, location (with an embedded Google Map), links to your social media profiles, and contact information like phone number and email.
It’s still important to market offline. Use your physical store space as a marketing tool by hiring window painters, holding seasonal contests and giveaways, and hosting other events. The increase in foot traffic may be due to the free merchandise, but promotions such as these increase the exposure of your store in the community. Instead of making immediate sales, they build your reputation and create loyal customers.
Reduce the Waste of Your Operations
Increasing revenue is an important aspect of raising candy shop profit margins. Just as important, and perhaps easier, is finding ways to reduce the money you’re spending to do business. It doesn’t have to be difficult to cut costs and increase efficiency; there are many simple ways to achieve these ends.
Closely manage the inventory of your candy shop. Scrutinize each SKU that your store sells, determining what items are worth carrying. Slow selling items are wasteful because they take up shelf space that could be dedicated to higher-margin or faster-selling products. Items that sell too quickly and become out of stock are also wasteful, though it’s less noticeable. If a customer wants to purchase a product of which you’ve sold out, they’ll simply take their business elsewhere and you’ll lose out on the sale. Managing your inventory more closely ensures you’ll have enough of the products that customers love, improving profit margins.
Closely evaluate waste and inefficiencies in your staffing as well. Having the right number of employees on the floor is a major challenge retailers face. If you have too much stuff, you’re wasting money and hurting profit margins. If you have too few employees on the floor during busy periods, you risk giving shoppers a poor customer-service experience. Employee management software and in-store analytics tools make it easier to build an efficient schedule. And if employee management is something you really want to take further with exact software that deals with just that, you can look into OKR Software, this deals with all aspects of employee engagement, working on objectives and key results to get the best out of your employees and for them to give feedback to you too.
Reducing Overhead Costs by Increasing Efficiency
Take an audit of your vendors and suppliers to evaluate whether you can eliminate or bundle services. Look for redundancies, vendors with poorly-selling or low-margin items, or third-party vendors that can be replaced by competitors with lower rates or better terms. Conduct your investigation objectively and without emotional decision-making, because it may be hard to cut ties. In addition to saving money on shipping and receiving, using fewer vendors for your products may allow you to cut down on cost by ordering in bulk.
Another simple way to cut overhead is to switch to energy-efficient lighting. Going green isn’t just good for the environment, it can make a major impact on your monthly utility bills. Consider ending relationships with third-party vendors who provide services your own employees can handle. For instance, if you regularly hire an outside company to wash your windows, save money by assigning the task to a staff member.
Evaluate the efficacy and cost-efficiency of your payment processor. Because candy stores typically make a lot of small transactions, negotiating a better fee schedule can save your business on overhead costs. Request a quote from another vendor to see how your current one stacks up. If the checkout process is too lengthy or delayed it’ll lead to longer lines that disrupt the flow of traffic in the store, leading to dissatisfied customers.