the casegood gal · physical exercise (70%). that is a robust consumer endorsement of the...
TRANSCRIPT
The Casegood Gal
Las Vegas Market is right
around the corner!
July 29-August 2nd
We hope to see you there!
http://casegoodsgal.com
How about a Memorial Day weekend Bedroom & Bedding Sale. Perfect time to promote!
Here are a few ideas • Free Mattress with
Purchase of 4 PC bedroom
• Free Pillows with purchase of any mattress set
• King for a Queen Price • Free Box spring with
purchase of Mattress
Memorial Day is May 28!
90% of Mattress sales are at the $299 Price point? Wayfair sells a mattress online every 10 seconds?
Perfect time to jazz up your store with pops of color! Also a good time for a Spring Clearance, out with the old, in with the new.
Simply put, you divide your average inventory into your annual gross profit to determine your
gross margin return on investment. How much do you get back if you invest one dollar? In this example, investing one dollar on an Ashley chair A gives you $24 gross margin return on investment. The other chair, B, gives you only three dollars. Why?, because you have to carry $87,996 of inventory with chair B in an average month while you only have to carry 11,000 with Ashley. Both chairs sell the same 100 units per month for the same selling price. The only difference is that much more inventory is needed for the second chair because of the 140 days leadtime versus Ashley’s 14 days. Because Ashley ships so quickly, You don’t have to stock as much and therefore you will make more money. Furthermore, if something doesn’t sell, You re able to get rid of it quicker because
you have only had to keep minimal or no stock on the product. This saves markdown money.
Chair A Chair B
Selling Price $439.99 $439.99
Cost $219.99 $219.99
Gross Margin $220 $220
Gross Margin Percent 50% 50%
Sales per Month 100 Units 100 Units
Reorder Lead Time 14 Days 140 Days
Average Inventory 50 Chairs 400 Chairs
Gross Margin per Chair $220 $220
Gross Margin X100 Chairs/Mo $22,000 $22,000
Annual Gross Margin-12 Months $264,000 $264,000
Inventory (Avg, Inventory X Cost 11,000 $87,996
GMROI $24 $3
Are you losing money? Each day that a product sits in your warehouse results in a reduction of profit for that product. By leveraging Ashley's warehouse, you increase profit, reduce your overhead and increase dollars per square foot. THIS IS GMROI
Gross Margin Return On Investment
What should retailers be talking about in their advertising?
Independent bedding and furniture retailers attending Nationwide Marketing Group’s PrimeTime convention a
few weeks ago got several answers to that vital question — answers that, unfortunately, many retailers are
ignoring these days.
Here are three key takeaways from the Nationwide event that can help mattress retailers better connect with
consumers:
1. We need to sell a good night’s sleep.
Interestingly, this was the first point that came up at two mattress presentations, one delivered by sales training
pro Bob Muenkel and the other delivered by industry guru Jerry Epperson.
Those two bedding experts highlighted research from the Better Sleep Council, the education arm of the
International Sleep Products Assn. The BSC study found that consumers say a good night’s sleep is the most
important factor for health and well-being, with 85% of consumers expressing that view.
The study reveals the primacy of good sleep in consumers’ minds. The consumers ranked a good night of sleep
as more important than a healthy diet (76%), stress management (75%), regular medical check-ups (71%) and
physical exercise (70%).
That is a robust consumer endorsement of the importance of a good night of sleep, and it’s a reminder that
good sleep is what we are really selling. Yet — pet peeve warning blaring loudly — retailers continue to tout
lowball bedding prices, free box springs when you buy a mattress, no financing for five years and free
adjustable bed bases, among other things.
Consumers overwhelmingly affirm the importance of sleep, but we, as an industry, are not speaking that
language in our advertising. Argh…
2. Many — too many — Americans are not getting enough sleep.
The BSC study found that 42% of Americans say they don’t get enough sleep. This figure, which should be a
wake-up call, underscores the importance of selling sleep. Literally millions of Americans know they are not
getting enough sleep, yet we still refrain from touting a good sleep message in most of our retail ads.
A good mattress is vital to a good night’s sleep, but we would rather talk about free bed frames, free pillows and
even a free adjustable bed base. This is a major disconnect.
3. Comfort and support are the most important features in a mattress.
This was yet another revealing statistic from the BSC research. By an overwhelming margin, consumers affirm
the importance of comfort and support, with 96% expressing that view. Construction/materials was second,
cited by 85% of consumers, while size/thickness was third, cited by 82% of consumers.
Reputation was next on that list (67%), just ahead of warranty (65%), customization (47%) and technology and
innovation (46%).
What’s missing from that list? Low prices, for starters. Free box springs, free adjustable bases, free pillows and
other “freebies” are also missing.
So what do many retailers do? Tout low prices rather than great comfort and support.
Bottom line: This BSC research provides a handy roadmap for the themes that retailers should be talking about
in their advertising. Consumers know sleep is vitally important, admit they aren’t getting enough sleep and know
that comfort is vital in a good mattress. Now let’s start incorporating those themes in our advertising.
This article was taken from the March issue of Furniture Today. Written by David Perry
Ashley is your Bedding SOURCE! Contact Gay or Hunter today for more information on our Sierra Sleep Bedding Lineup!
There are plenty of NEW
products shipping!
B325 Harlinton
B348 Fancee
B351 Dreamur
B369 Cinrey
B378 Alisdair Please contact Gay or Hunter today for more information!
B292 Daneston
D754 Grindleburg
B378 Jorstad
D387 Chanceen
B200 Derekson
D376 Moddano
If you are need of
anything,
please feel free to
contact us!
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Your Ashley Casegoods Team!
Gay Hynds 1-512-422-7083
Hunter Ballard 1-512-539-6785
Administrative Assistant Karen Prendergast
Office 321-752-6941 Toll Free: 800-429-9464
Fax: 321-989-0333