FASHION RETAIL / Jul 13, 2019
[Business] MAXIMIZE THE PROFIT MARGIN OF YOUR CLOTHING BOUTIQUE
If you own or manage a clothing boutique, it’s very likely that you’re constantly seeking to maximize the profit margin you have.
Being able to increase the profit margin, which is the difference between gross income and expenses, will allow you to do many things with your business, such as exploring new lines of products, thinking about an expansion, or implementing improvements that will benefit your short, medium and long term profitability.
Take into account the following ideas to create a comprehensive plan that allows you to have a higher profit margin in your clothing store.
Reduce costs in your store
Increasing the selling price of your products to improve your margin is usually not the best idea, as this could lead you to lose a considerable number of customers.
A good solution is to adopt simple but effective schemes that can make a real difference in the costs you have. For example, it’s essential to have good employee handling and well-planned inventory management. The reduction of packing costs for shipping orders or the stored goods can reduce the seemingly harmless expenses.
Also, the selection of your suppliers and the relationship you have with them are crucial, because they can help you improve costs, get discounts or give you benefits that will improve the profitability of your store.
Do a revaluation of the prices at your store
It’s important to have a balance between the manufacturer's suggested retail price (MSRP) and the price that customers are willing to pay.
Make a revaluation of the prices you currently have and create a strategy. One idea is to put "premium" prices on items that are used once in a lifetime, such as wedding dresses or prom dresses; and that the rest of your products keep competitive and attractive prices for your customers.
Offer an extra that doesn’t cost you anything
Speaking of a fashion store, you can offer personalized style advice when your customers are shopping, and charge for it. So you can go from selling just a dress, to selling a dress plus a consultancy.
Also, many customers are willing to spend a little more in stores where they know they’ll receive extraordinary service. If your store starts to be known for the quality of its customer service, you can increase your prices and obtain a higher profit margin.