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Focusing on Retail Mix and Performance Measures

By: Dori Soukup
Posted: August 29, 2011, from the September 2011 issue of Skin Inc. magazine.

page 3 of 4

Annual retail sales ÷ Average inventory at the beginning of the month for each month of the previous year = Turnover rate

If your inventory is $10,000 each month, multiply that by 12 (since there are 12 months in year) to get the average inventory. So $10,000 x 12 = $120,000 for the year. If sales were $600,000, what would the turnover rate be?

$600,000 ÷ $120,000 = 5, a very good turnover rate.

Sales per transaction

This measurement indicates how much retail you are averaging per client. It is frequently referred to as retail volume per guest.

Gross sales ÷ Numberof transactions = Sales per transaction