WWDD?

Darlene has come a long way. As a new c-store manager, she consistently forgot orders, accepted ridiculous amounts of unsellable goods from those tricky DSD vendors, and spent most of her day filtering through paperwork to determine proper price settings (that may or may not have maximized gross profit margins!).

A few months ago, the owners of her convenience store operation decided to install a centralized pricebook management system from CMIsolutions. Darlene has become a superstar employee. She now has reports that tell her exactly what needs to be ordered, which orders to accept (and at what price!), and, since pricing is controlled at the home office, she now can focus more of her attention on customer service and employee management!

With CMI, Darlene has all of the tools at her fingertips to make confident, easy, educated decisions regarding the operation of her store. When faced with “off” orders or complicated price changes, have your store managers ask themselves “WHAT WOULD DARLENE DO?”!

To learn how to turn your store managers into superstars and increase your bottom line, visit CMI at
NACSSHOW
Booth #6940

There's A New Sheriff In Town

No, no, no…I am not talking about John McCain who invoked that self image in last Friday’s debate.

I’m talking about our beloved c-store heroine - beleaguered c-store manager, Darlene. As you recall from last week, Darlene got busted for overstocking Pepsi products in her store. However, unlike our politicians, she actually has a plan that doesn’t involve a bailout.

This week Darlene is armed with hand-held a scanner to verify costs and a “Recommended Purchase Order Report” print out. She is waiting behind a stack of Diet Mountain Dew for Jack, the Pepsi stud. She already told Jack to be at her store between the hours of 9AM and 11AM so she could properly receive their order without interruption. The Sheriff is in town and taking names.

Darlene’s 3-step approach to taking control of her inventory:

1. With the RPO report, Darlene knows how many units of Pepsi products she sold historically and she knows what her “re-order” value is for each SKU. She has already completed the order form to hand to the driver based upon the data calculated on the report.
2. The vendor will be checked-in on Darlene’s timetable not during her busy time.
3. Armed with a hand-held scanner, she will check-in the vendor and her software will verify the cost of each item entering her store and whether or not the product has been approved for her location.

In less than 15 minutes Darlene has checked-in her vendor and is back to her customers.

Darlene may not be able to promise universal health care and she probably can’t see Russia from her back porch, but she has improved her inventory-turn ratio and preserved her job and that of her fellow store workers.

Want to find out more about improving your Retail PriceBook Management? Visit us in person at Booth #6940 during this weekend's NACSSHOW!

Your C-Store vs Their Warehouse

Do you ever feel like your store is really just a warehouse for the DSD vendors and your main grocery wholesaler?

As we get closer to the annual NACS trade show you will see a convention floor full of new and old products to fill up your store. There will be new cigarettes, new candy, new snacks, and what would the show be without the trade-show booth babes pimping yet another new line of energy drinks?

The enticement to place orders on the next "can’t miss" product will be in your face for three days and your merchandising manager will want to buy it all. Your accountant will want to buy none of it. Somewhere in-between will be the right answer: having enough merchandise and, more importantly, the right product mix to meet the needs of your customers, while not having so much that you morph into a warehouse of unsellable goods.

Before you sign on to any product, try to determine how rapidly the product will sell (or turn). If you get a delivery every week, you do not need a 6-week supply on the shelf. However, that is consistently what we see in more than 70% of the stores who have not fully automated.

Let’s break this down. Jack the Pepsi guy comes in every Wednesday at 11:30AM. He knows that is Darlene’s shift and it is near the busy lunch hour, so she will be distracted. Jack has a tee time at 1:30PM. If he can clear out his truck, he can get in 18 holes and be home before dinner. Darlene’s store sells about 15 2-liter Diet Pepsi’s a week, but Darlene accepts delivery of 100 2-liter Pepsi bottles because:

a.) She has a high ceiling in the store and can stack them twelve feet high?
b.) She listens to the Pepsi delivery guy who will kick in 5-cranberry chocolate flavored Pepsi’s that she will never sell for a 10-cent discount?
c.) She wants the stack twice the height of the Jeff Gordon life sized cardboard cutout?
d.) All of the above.

Take your pick. The answer is troubling but you know it is true, don’t you? However, that is how inventory grows in a typical c-store if the order is not placed with an inventory-turn ratio in mind.

A centralized pricebook system can help you monitor store inventory turns and allow you to set the proper expectations. Now is the good time to get started. Do not let your inventory turn every six weeks if you have a weekly delivery!

CMI will be at NACS booth #6940. We won’t have scantily-clad booth babes, cold pizza, or warm energy drinks. However, we do promise a chair for you to rest your legs and experts on hand to discuss our reliable accounting, pricebook, and jobber wholesale software system that will help you maintain proper inventory levels, increase cash flow, and coordinate both your merchandising needs with those of responsible management.

See you in Chicago!

We Just Let Darlene Do It.

“Darlene, our store manager, and her sister, Jolene, at our other store, set up all the retail price changes and specials. We never have to do that work at our home office,” said an office manager during a recent meeting.

Yes, our poor fictitious c-store heroine, Darlene, who didn’t order the turkey and cheese sandwiches last week, now is the one the company is depending on to set the pricing. Again, this is a true story (although names have been changed to protect the innocent).

No wonder Darlene doesn’t have time to work with customers…..she is stuck in the back office doing the paper work to set up proper pricing. What’s more is the huge leap of faith being taken that she is even changing prices to assure expected gross margin.

Here is the wild part: this particular company actually has a complete retail software system in place with a centralized pricebook --- and it is not being used! What a waste of money! Just another company that has invested millions of dollars in their stores, but not in their business processes.

Many business owners are simply distracted. Especially this year, considering the spike in fuel and credit card fees. The focus on fuel and fees are justified. Unfortunately, in-store product prices are also rising and managing that process is more involved than changing fuel prices.

Now is NOT the time to abdicate responsibility of the $80,000 c-store to Darlene and Jolene. They should be too busy with customer service and employee management to push paper.

CMIsolutions produces and sells software to meet the needs of the industry. CMI does consulting work to review business processes. Software without the proper process is just a wasted investment.

It may be time to fine tune your processes or, in the case of Darlene’s company (and it really has become “her company” as she is the one running a multi-million dollar investment), it may be time for a complete overhaul.

You do not have to be a CMI client to take advantage of our process consulting services. Give us a call and let us help you see the ROI you should for your investment.

To learn more about pricebook and inventory management solutions, call Joe Terranella at 800.211.5980 x2504 or visit our website http://www.cmisolutions.com.

Darn You, Darlene. Darn You!

Over the past several months, readers have asked me where I get the material for writing this weekly blog. Many assume I simply make it up. They couldn’t be more wrong. No one could make this stuff up! Visit any retail store, on any given day, and the material is prime for the pickin’.

Last week, a reader recounted her disappointing c-store experience She regularly goes to a c-store store during her lunch break to purchase, of all things, a pre-packaged turkey and cheese sandwich (she claims they are delicious… who am I to argue?). On this particular day, stomach growling and mouth watering with anticipation, she goes into the store for her lunchtime favorite, but, alas, the sandwich of her morning dreams was missing!

Frantic, she approached the store clerk to inquire about “her” sandwich. The clerk, knowing this was one of her “regulars”, did what any store clerk would do when approached by an upset customer…she immediately threw her manager under the bus. The clerk explains to our hungry protagonist that “Darlene forgot to check our inventory and place the order with the sandwich guy. She forgot the mustard and mayonnaise condiments, too, so your sandwich would have been dry anyway.”

Are you relying on “Darlene” to place your orders or are you ordering based on triggers from your Recommended Purchase Order report in your software? This report can be run from your corporate home office for each store so YOU control YOUR purchases.

The store owner invested over $2 million dollars in that location, but he has not invested the less than quarter of 1% per store to get an accounting system which would insure that investment.

Has this store lost a customer? Probably not (if this is the first time!), but in today’s competitive marketplace can they afford to take a chance? Can anyone?

Is Your Retail System Like an All-Star Pitcher or Hitter?

Those of you who are bleary-eyed from staying up watching the All Star baseball game last night may know what I mean. The pitchers ruled last night --- mowing down hitter after hitter. Even A-Rod struck out twice (not including the strike out his wife’s divorce attorney blew by him last week).

As a Yankee fan, watching a team this year without a strong pitching rotation is painful. Think about it…in the early era of baseball, the hitters ruled the game. Babe Ruth, Joe DiMaggio, and Mickey Mantle all hit for power and average. Now, however, the rules of the game have changed and the pitchers rule the game.

One pitcher, directing 9 batters…talk about centralizing and managing your game. Don’t you wish you had that kind of control in your business? The good news is you can.

A centralized Pricebook is similar to an All-Star pitcher. At your home office, a centralized Pricebook is the one place where all prices are validated and sent to the stores which puts you in complete control. It is the one place where you can control your inventory and cash flow. The store managers do not decide which products you buy and at what price. You do. Yet many c-store operators are still playing by the old rules and not controlling their businesses from a central location.

Not using a centralized retail inventory management system is analogous to allowing the batter give the pitcher his signals for each pitch. Are you kidding me? As a technology shop, change is a part of our everyday business and we strive to be ahead of the curve every hour of every day.

In a game as traditional as baseball, for better or worse, times have changed. How about your business? Are you running it like the pitchers who faced Babe in 1927 or are you running like the pitchers of the 2008 All Star game?

Have You Declared Your Independence?

Good question. As we get to the mid-year point of 2008, many in this business feel far from independent.

The mindset of many is we are dependent on so much. The oil companies are against us, the credit card processing fees are killing us, the cost of food products is escalating, labor costs are up, taxes are on the rise, profits are getting squeezed, and any other number of negative issues have some crawling into the corner in fetal position.

Not exactly how you envisioned the year when it began, is it? The New Year - full of hope and the usual list of resolutions - now mostly forgotten. The good news is there is still half a year to plan for better times ahead.

Instead of dwelling on the problems which, by the way, have always been a part of this industry, get these issues in balance or you will never survive. Usually, this weekly blog features tips regarding technology and how it can help solve your problems. While it can, that is for another week.

This week’s tip is one of balance. We know the issues mentioned above are real, but don’t make them overwhelming. Add some balance to your life and you will find your life is not completely dependent on the economic ills of the moment.

One way to gain balance when lamenting your own fate is to turn around and help someone else. I learned from a highly respected fuel jobber (and former employer) just how important this was, not only to the community, but to your own sense of perspective when viewing the big picture. Many times, after assisting others with their problems, your own may suddenly appear a lot less daunting.

Many of you have already figured this out as demonstrated by your involvement in charity work: MDA, FCA, cancer fundraising, and local benefits. One of you donates a penny a gallon to help those in need of home heating fuel in the inner city. Another delivers turkeys every Thanksgiving to families in need. The list goes on and on. We are a very charitable industry.

At CMI, we have people individually involved in fundraising for cancer walks, time devoted to Boy Scouts, time donated to troubled youth, and another who donates his frequent hotel staying points to families with sick children so they can be near them while at a far away hospital.

The common thread for all of these companies and individuals is they lead a balanced life with purpose and a shield of goodwill which all the bad news of the economy cannot pierce.
Don’t let the second half of the year go to waste. The bad news is not going away, but if you get involved in helping an individual or group of people, you will be gain the perspective to overcome those issues and realize true independence.

To learn more about pricebook and inventory management solutions, call Joe Terranella at 800.211.5980 x2504 or visit our website http://www.cmisolutions.com.

Feel free to forward this tip to friends, co-workers, employees, business partners who you feel might enjoy or benefit from it.

Reduce Your Credit Card Dependency - Part 2

Reminder: Due to high demand we will be hosting two webinars on an alternative program to help offset the high cost of credit card fees. The first session is 10:00AM EST and the second presentation at 4:00PM EST.

Before you go to Cash Only as an option to survive the high cost of credit card fees, you may want to see what others are doing to build loyalty to their brand and at a greatly reduced price per transaction.

If you have ever thought about privately branding your company with your own loyalty cards and benefitting from the smaller transaction fees by using the ACH (Automated Clearing House) fee program, this is the webinar for you.

ACH fees can be only 15-cents per transactions. On a $60 fill-up you pay 15-cents instead of $1.20 (2% of $60). That $1.05 savings per fill-up can be the difference between making a profit and going out of business. YES…that is $1.05 extra money per fill-up in your pocket! Or you could pass on a 3-cent discount per gallon to your customers to retain loyalty and still make more money than with credit card transactions with their high fees.

We would like to introduce you to a low cost transaction fee program in conjunction with KickBack Points™ to help you get control of the spiraling cost of bank fees. CMI and KickBack Points™ will be hosting a webinar on Tuesday, June 24 at 10:00am EST and at 4:00pm EST. Learn how to build brand loyalty and significantly reduce your credit card fees. The Webinar is FREE; however, an RSVP must be received ASAP. Email Stephanie at sflury@cmisolutions.com to sign up for either of these sessions.

To learn more about pricebook and inventory management solutions, call Joe Terranella at 800.211.5980 x2504 or visit our website http://www.cmisolutions.com. Feel free to forward this tip to friends, co-workers, employees, business partners who you feel might enjoy or benefit from it.

Cut Your Credit Card Dependency Today

Your bank’s credit card division is now making more per gallon than you!

Wonderful…you do all the work, and they skim 2-3% off the top. While not quite as high as the 10% “vig” the local bookie charges on football bets, at least you have a chance of winning against the bookie. Unfortunately, the bank always wins.

Like many of you, I have written my NC Senators and Congresswoman to support HR 5546 as a first step to shed light on the chokehold the banks have on credit card fees. And, yes, as expected, my request was ignored by Senators Dole and Burr and Congresswoman Myrick. Only Senate candidate Kay Hagan responded with a promise to at least look into the issue if elected.

Do you really want to place your financial future in the Washington crowd who owe much of their existence to the financial clout of big oil and big banks? Or is it time to take control yourself?

Have you looked into privately branding your company on debit cards and the smaller transaction fees by using the ACH (Automated Clearing House) fee program?

ACH fees can be only 15-cents per transactions. On a $60 fill-up you pay 15-cents instead of $1.20 (2% of % $60). That $1.05 savings per fill-up can be the difference between making a profit and going out of business. YES…that is $1.05 extra money per fill-up in your pocket! Or you could pass on a 3-cent discount per gallon to your customers to retain loyalty and still make more money than with credit card transactions.

We have a low cost transaction fee program in conjunction with KickBack Points™ to help you get control of the spiraling cost of bank fees.

Don’t wait for Washington to bail us out. We are small American businesses, not foreign governments or Wall Street banks. You know how far down the food chain we reside so don’t wait for a helping hand from Uncle Sam. And who wants big government in our shorts anyway?

CMI and KickBack Points™ will be hosting a webinar on Tuesday, June 24 at 10:00am EST. Learn how to build brand loyalty and significantly reduce your credit card fees. The cost of the webinar is free, however, an RSVP must be received by Friday, June 20. Email Stephanie at sflury@cmisolutions.com to RSVP.

Paralysis by Analysis

The information age continues to bombard us with data instantaneously. Some valuable (like this weekly message), some critical for rapid business decisions, and some just background noise.

How do we weed through the reports our c-stores are providing and not be paralyzed with indecision?

Keep it simple. First, print off an Inventory Analysis report by Category (or similar report if not a CMI client). This will give you the beginning inventory balance, purchases, sales, store use, shrink, spoilage, markdowns, transfers, and other adjustments that affect inventory. The report can be printed by day, week, or month. Additionally, you can view cost, retail, gross profit percentage, and inventory turnover information.

If your pricebook and scanning has been working as it should, this snapshot report will reveal if you are running on all cylinders or not.

If you see an anomaly at a category level, then you have other reports to drill down to the exact items by UPC that may be retailed at the incorrect selling price, where costs are inexact, or where inventory shrink or lack of movement is affecting the bottom line. Most software companies, like ours, offer dozens of reports and give you the ability to customize your own reports. Pick the ones that best meet your objectives.

Remember: To manage effectively, and avoid paralysis by analysis, check the exception reports and save a tree.

Variety: Turning Less Into More

Several weeks ago we reminded you, our readers, to get aggressive about removing the lowest selling items from your store and many of you have begun that cash saving process. One reader asked, “I see Fruit Loops on my bottom 50 list. My grocery wholesaler said this product is a high volume seller and I think it should be selling too. Do I really want to dump that product?”

As you review your bottom 50 each week, look very closely at the “size” of the product that is not moving. Then look at your products. It’s important to see if other sizes of that product are moving or not.

This particular company looked more closely and found they were stocking three different sizes of Fruit Loops. Why? Does size really matter when it comes to cereal?
This is a c-store, not a Super Wal-Mart. You have limited space and it’s a safe assumption that most of your customers aren’t coming in to purchase a box of cereal, right? So you have to ask yourself, “Do we really need three different sizes of each brand of cereal on the shelf?”

Picture your hurried customer who has to grab a box of Fruit Loops. He probably does not care if you have one size or ten size boxes of cereal. He’s on a mission to pick up cereal and milk on the way home from work. He couldn’t care less if the box is 12.2 oz. or 16 oz. This guy will be smiling all the way home, just proud he remembered to stop and pick up the two items his wife had asked for; secure in the knowledge that he won’t be verbally castrated for forgetting again. (Not that this has ever happened in my life).

This month cereal makers will be reducing their contents per box in order to get the retail prices down, so be wary of new inventory attempting to creep into your store. The bottom line: Find the size of the most popular items using the reports your back office software provides. Stock the most popular size of grocery items that are selling and free up space in the store for high volume goods.

Cash Overage – The [C-store] Employee 401k Plan

During a pre-installation session at a client’s office, his store supervisor told me about how great one of their stores was being run and how it would be a great pilot store for us to test some added features we had just introduced. I asked the store supervisor what made that store better than the others. He replied, “One cashier is the best. He never misses a day of work and he is never short of cash at the end of a shift.”

“Never?” I asked. “No he is always a dollar or two over,” he replied.

Naturally, I had to visit the store and meet this cashier extraordinaire. More importantly, I wanted to see his 401K contribution for the day. Sure enough, he was kicking it “old school” and had a scorecard on the side of the register. You know the drill. He had a nickel ($5), three dime ($10 each) and a penny ($1) next to the register drawer. So far, his self directed 401K was totaling $36 and he still had 5 hours to go on the shift! No wonder he never misses a day of work!

You see, he was counting how much money he was short ringing on the register during his shift and using a multiplier of ten so he and could pocket the money before handing over the cash drawer to the manager. Of course he would kick a $1 back into the drawer to come up “over” for his shift.

How could an employee clip you for $50 or more per shift without you knowing? Easy, if you aren’t enforcing scanning with tight inventory controls. Are you allowing cashiers to ring up sales without scanning? If you have an in-store inventory of $80,000 those “short sales” leading to “cash overages” will get lost if you are not doing a rotating item level count, checking trend analysis reports, no-sales and voids report trends, etc.

Remember: walking out of the store with cash is a lot easier than stuffing 3 cartons of cigarettes in your shorts (and it causes far less chaffing).

No employee should be “short” every day. And no employee should be “over” everyday. The ones who are consistently “over” have not short- changed a customer, they have short- changed you!

The good news is that when you fire these knuckleheads, they can go to a competitor and open a new retirement plan at their store.

Are Your Memorial Day Promos Ready for the Weekend?

By now you should have your Memorial Day product promotions set up for your stores to be ready to have a terrific weekend of inside sales, right?

With the price of fuel at record highs, in-store promos are more valuable than ever, driving traffic inside where you still have some margin.

If you are not set for promos yet, it’s not too late.

Login to the software system you are using and enter the starting and ending date of the promotion and the grouping of products. To speed up the process you should be able to select the promotion items by any of the following:

• UPC
• Price Group (common priced items, i.e. 20 oz Pepsi products)
• Category/Department
• Vendor
• Item Group (products grouped by manufacturer, i.e. all RJR products)
• Store or by Zones (groups of stores)

Within a few minutes you can set up all of your promotions from your home office ahead of time and send the products, the pricing, the beginning and the ending dates of the Memorial Day specials to all or selected stores in one easy process.

After the holiday, your system will automatically revert the sale items back to the regular pricing. If you are not able easily handle promotions with your current pricebook system, give me a call or check our website.

Have a safe and profitable weekend and don’t forget those who died in service to our country:

In Flanders Fields
John McCrae, 1915

In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.
We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep,though poppies grow
In Flanders fields.

To learn more about pricebook and inventory management solutions, call Joe Terranella at 800.211.5980 or visit our website http://www.cmisolutions.com/.

Feel free to forward this tip to friends, co-workers, employees, business partners who you feel might enjoy or benefit from it.

Do Canned Sardines Have An Expiration Date?

Boy, I sure hope so, because the c-store down the street from me still has the same 12 cans on its shelves it had when I moved into the area 10 years ago! Let’s help this guy out.

Do you have any cans of sardines in your store? How about other slow moving products? You know you do, but what are you doing about it?

Does the 80/20 rule prevail in your store? This rule occurs when 20% of the inventory accounts for 80% of your gross profit. Do you know your percentage?

The 80/20 rule is conventional wisdom for everything from sales to management to finding a mate online; but Pareto's Principle was never meant to be linear. And it certainly should not be our goal. We can do better and we can do it right. With fuel heading to four bucks a gallon, we have to.

What if you could improve your chances by just 1%? Would that make a difference in your cash flow? With an inventory of $80,000 in a typical c-store, you bet it can!

It’s not hard to get the ball rolling. Here are two steps to get you started:
1. Print out a list of all of your store’s 50 slowest moving items. (For an example of a Bottom 50 Moving report, click here)
2. Print out a list of your top 50 selling items. (For an example of a Top 50 Moving report, click here)

Now here’s the fun part. Take those 50 items and clear them off your shelves. (Yeah I know, lots of dust bunnies, right?) OK, clean off those shelves and let’s move in some top selling items.
Now do this every week for the next month and you will get rid of at least 1% of the dust collecting items in your c-stores. Start today and by Memorial Day weekend you will have items on your shelves that customers actually purchase!

Don’t know how to tell what your bottom 50 and top 50 are? We can help. Give me a call or check our website, www.cmisolutions.com.

Now…what do you do about the can of sardines when they have expired? Put them on a display and sell them as bait. Deep sea fishermen, who can use the old sardines to catch bottom dwelling fish, love ‘em!

What Are Those Ball Caps Doing In My Store?

Several years ago, I walked into a c-store with a company owner and, to his surprise, a soft drink display in prime space had been replaced with a rack of some of the tackiest baseball caps anyone could imagine.

“Who bought 500 baseball caps,” the owner asked the store manager. “I did,” the manager proudly responded, “because the vendor gave me a great deal on them… only $5 per cap!”

The owner just rolled his eyes, turned to me and said, “How soon can we install your software?”

He had 10 stores and was doing the math. The owner understood his manager had just tied up $2,500 in unauthorized inventory that would take forever to sell.

This is an extreme case, to be sure, but chances are you have had a similar experience. Maybe it was the DSD delivery driver who tells your store manager the new strawberry-mocha-energy drink is a sure seller or the extra 100 cases of beer are needed for the long weekend (even though it’s Easter weekend, not 4th of July).

Do you have unauthorized or slow moving inventory in your stores? Do you know what is selling and more importantly what is not selling? Why not? It’s your money!

While we can appreciate the entrepreneurial spirit of the store manager, in a time of escalating costs of food and fuel prices, inventory management is critical to remain in business.

What is the solution? Try CMI's centralized pricebook and inventory management system, PriceBook Manager, which authorizes products and product pricing for each store. For more information, click here.