Margins + Working with Supermarkets Flashcards
Front Margin
Selling price - Cost price / Selling price
Or RRP-COGS/RRP
Back Margin
(Total Sales - Total Cost - Total Wastage + Total Investments) / Total Sales
What’s another word for “Back Margin” used by Supermarkets?
C3 or Contribution Margin
PROMOS: Frequency
How often your brand is going to be on promotion
PROMOS: Depth
How much discount is given
PROMOS: Base
Off promotion - being sold for full price
PROMOS: Uplift
The increase in volume sales driven by the promotion
PROMOS: Margin Maintenance
Keeping the buyers’ percentage margin flat while being on promo
NSL
Normal Shelf Location
What’s another word for NSL?
Parent or Primary Space
Secondary Space
Place in a store where products are highlighted e.g. Gondala ends
ASP
Average Selling Price (the average price of your product over time including promos)
VSOD
Volume Sold on Deal - The percentage of Total units sold on promotion over time (usually 1 year)
Promo Penetration
The VSOD when the promo is live (only on multibuy promos)
What are the three types of promos?
Price Down promo, Multibuy,, introductory offer
What is margin maintenance?
Keeping the retailers margin the same as when they’re off promo.
Promo Fee
The Admin fee for setting up and running the promo
Site Fee
The cost for going on a gondala end
What are the main ways you can do margin maintenance?
Retros, Triggers, Case Discounts
What is a retro?
Cost price x % discount usually used in Price down promos
What are triggers?
Cost Price x (% discount x % promo penetration) Used for multibuys
Case discounts
A percentage off each case (AVOID!)
What is price establishment?
A product cannot be on promo for more time than it is off promo.
What are the 5 ways you INVEST in a listing?
Promos, In house marketing, Listing fees,, site fees + Overriders
What is an overrider?
Annual listing fee based on turnover of brand (generally considered bad practice now.
What is a listing fee?
A lump sum “sweetener” to get them to give you the listing - try and avoid this and deflect saying how you’d invest that money in in-house marketing + competitions etc.
Site fees
The cost to go onto a second site (if you are offered it) The cost varies depending on the quality of the site.
Promo fees?
Admin fees for running a promo
What should you avoid when it comes to promo fees?
Lump sums - try and switch it to £10 per site rather than a lump sum.
What are the three things you need to find out from a retailer?
- Promo periods - length, quantity + timing.
- Promo strategy for the retailer
- Promos attitudes for retailers customers
