My subject this month is making money.

Sound simple enough, but as the market has changed so much in the past 10 years, can we afford to operate in the same way as we always have?

For many years, we opened our shops in the morning, lots of people came in and we sold them a TV or other appliance.

The TV had all the cables you needed and it came with a stand.

We made an OK margin.

The main enemy was the bloke round the corner knocking £50 off the price, or one of the multiples promoting a special offer.

It most certainly wasn't a spotty little techno oik, operating out of his bedroom with no stock and offering the TV at almost cost.

Of course, nowadays this oik is driving a Ferrari, having sold his website to a major national or an investor for millions of pounds.

He is living off the interest while he plans the next industry to plunder.

With fewer people through the door and the credit crunch upon us, what can we do?

First off, why not ensure that your store carries brands that are not being crucified on the Web or by grocery stores.

Exclusivity as a retailer is more likely to mean retained profit, so why promote brands that can be bought anywhere?

In this transparent day and age, that has to be a recipe for disaster.
 
Secondly, why not offer a good choice of attachments, including a decent range of AV Furniture that looks a bit different and has a slightly higher price tag.

Remember it is regularly the lady in the house that makes the final decision, so make sure that your offering is different from the sea of glass ‘oil rigs’ everywhere else.

Often, this can bring back the potential customer to your store, so you get a second bite at the cherry.
 
Make sure that your high-end offering looks better than the rest of the products in-store, by laying it out in such a fashion that both your premium TVs and AV furniture stand out from the other cheaper products.
 
And finally, make sure that your sales staff are trained and incentivised to offer the best products you sell first - Best, Better, Good.

Over sixty per cent of people will then buy in the middle and spend more, leaving you with a higher cash profit - everyone’s happy.

Bear in mind, the cash profit on selling just one high end stand can often be the same as selling three glass stands.

So, you have just tripled your cash profit, leaving plenty of money to pay your sales guy for doing the job and you to fill up your new 'rocket'.

Gordon Dutch