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76 Cards in this Set

  • Front
  • Back
Total amount the retail buyer paid for the goods
The difference between cost and the retail price
Markup on one item or SKU
Individual Markup
Markup is established by the Component Addition Method
Cost Plus Method
Markup found on multiple units
Gross Markup
Markup that doubles the invoice cost of the item to acheive the retail price
Keystone Markup
The markup that can be achieved after adjusting for the charges of servicing the goods (alt. or cash discounts)
Maintained Markup
When initial markup is based on actual sales
Gross Margin
Markup calculated for groups of items w/ different markups at a point in time
Cumulative/Average Markup
Markup calculated using the initial retail price of all items at a point in time
Initial Markup
Actual retail sales
(adjusted for markdowns and other losses)
Net Sales
Difference between the total cost of purchases and total retail dollars of all merchandise in stock at a given time
Cumulative Markup
levels used for groups of merchandise to help the consumer discriminate among the similar items
Items sold at wholesale cost or below
Loss Leaders
Cost, Markup and Retail
Retail Price Elements
Equated with net sales, indicating the amount of sales for the business.
Sales Volume
Formal document- gives financial overview of the retail business- also called income statement or operating statement
Profit and Loss Statement
Profit before taxes
Net Profit
Net profit after taxes
Bottom line
Occurs when gross margin is too small to cover the operating expenses
Sum of the cost of doing business, except for cost of goods ex- Salaries, rent
Operating Expenses
Wholesale cost of the item(s)
Cost of goods
Initial sales, without refunds or price reductions
Gross Sales
Amounts that are used to reduce the retail price of the item ex-damaged
Expenses that occur in preparing the merchandise to be places on the floor or sold to a SPECIFIC customer
Reductions in the billed costs that retailers recieve when the bill is paid on time
Cash Discount
Retailer has some control in through choice and supervision to reduce or retain these expenses
Controllable expenses
Special reductions in the retail price of items sold by the business to the employees of the business
Employee Discounts
expenses that remain the same for every period
Fixed Expenses
Expenses that can be attributed to a department, function or special activity
Direct Expenses
General expenses that are incurred from running the total business and are not directly caused by any one activity
Indirect Expenses
Include the elements of customer returns, employee discounts, markdowns, and stock shortages
Inventory that is lost, stolen, or damaged
Stock Shortages
Cost of moving the goods from the vendor's warehouse
Expenses that change with the volume of sales or stock or time of year
Variable expenses
Long range plan to guide decisions about the retail matrix, merchandise assortment, quality, fashion level, and presentation
Merchandise Policy
Wide array of product classifications, but few items within each class
Broad and Shallow
Pricing policy of the business ex- full price or discount
Pricing strategy
Listing of vendors, manufacturers, or other suppliers who provide merchandise for the retail business
Retail Matrix
Total mix of merchandise that is carried by the retailer
Merchandise assortment
value of how fast merchandise moves through a store
Stock Turn
Combination of floor stock and backroom stock
stock that has been ordered from the manufacturer/vendor but has not yet been recieved by the retailer
the amount of stock that is generally carried in the store during a select period
Average Stock
provides a constant supply of merchandise or back up inventory
Basic Stock
Level of stock at the beginning of the month
Beginning of Month (BOM)
Level of stock at the end of the month
End of the Month (EOM)
lead to lost sales and will offset the benefits of higher turn - empty looking
Stock outs
Method for calculating planned sales where the size of the selling floor is measured and multiplied by an estimate of dollars per square foot
Square Foot Method
Relate stock requirements to planned sales and are an indication of the dollars of inventory needed to sell one dollar of merchandise
Stock-Sales Ratio
Method of planning stock using predetermined ratios for estimating stock relative to sales
Stock-Sales Ratio Method
Method of planning stock that uses a constant level of stock and adds an amount for sales
Basic Stock Method
A working document that the retailer uses to transition from the expanded P&L statement to the assortment plan for shopping in the market
Six-month Plan
used to indicate the wholesale value of the merchandise and are called OTB
Planned purchases at Cost
Amount of merchandise that can be brought into stock during a given period
Planned purchases at Retail
When actual values that are transcribed through the store activities are comparable to the values created in the plan
Meet Plan
Money available to spend on new merchandise
Open to buy
An organized collection of related merchandise which includes specifications for brands, colors, sizes, and material
Assortment plan
Merchandise classification system that is most commonly used
Outline format
Merchandise classification system that diagrams the interrelationship across all parts
Tree format
Sort products by distincttive features and provide structure and organization for a collection of items
Merchandise Classification
When retailers use a set figure as a goal or a comparison point
technique where the buyer examines the cost, retail sale, and markup of the items that are sold by a retailer
Unit control
Type of dating with no cash discount. Used when vendor doesn't know the retailer or retailer has bad credit
Cash on Delivery (COD)
Start time for the dating when no other dates are given- most common type
Date of Invoice (DOI)
The cash discount period begins when the retailer recieves the goods
Receipt of Goods (ROG)
Dating starts with the end of the month and the invoice is to be paid within the specified number of days after the end of the month that the goods are invoiced
EOM- End of Month
Dating that extends credit for additional days in which to receive the discount
X dating
Advanced dating that indicates the goods have been "postdated" to allow for the shipment or to allow extra time for the discount
"as of"
Time when the full amount of the invoice is due "n/30"
Net Period
Discount applied if the invoice is paid before the end of the cash discount period- considered a bonus for early payment
An additional invoice discount the buyer can negotiate
To write the purchase order and leave it with the vendor
Drop Paper
Shortcut method for finding the final discount price without calculating all of the net values
On Percent Method
Discounts given when the buyer purchases a large number of units within one SKU
Quantity Discounts
Shopping for the best vendor and purchasing merchandise from that vendor