What is a range plan?
Your Range Plan does what it says on the tin.
It lets you plan when to launch, update and
stop selling products in your range.
The lifecycle of each product.
What can i see?
All in one place.
It's your Retail Bible.
Every. Single. Detail.
Attributes, Prices, Costs & Margins.
When you'll launch, sell, update, and end products.
Quantities, Selling and Cost Prices, Profit Margins.
View it your way.
As a whole, or as a snapshot in time.
Understand what your customers will see.
when should you use it?
To plan your product range for a specific time, a year,
a season or an event (e.g. Christmas).
why it is important to you
Ensure you always have
what they want, when they want it.
Manage costs and grow profits.
Keep a close eye on what you're spending,
your margins and quantities.
Know what to do, when.
Want to know more?
Let's have a look at how to Range Plan.
How TO RANGE PLAN
You can cut that sales pie into slices.
Each slice represents a Product Category.
The size of each slice will depend on the amount of sales that category will
contribute to the overall sales target.
But how big should each slice should be?
If you've been using your Sales & Analysis: (Track & Trade), you will be able to see how many sales you have taken in each of your categories.
Seeing the percentage mix of each category can help you decide how to slice your pie.
Within each Category slice are Sub-Categories, and then Products.
+ HERE'S A HANDY EXAMPLE
Let's imagine you make Cake Toppers.
Your sales target for this year is £10,000.
In your business you sell a range of cake toppers which you have put into Categories:
From your Sales Analysis, you can see that the 'mix' of sales is:
- 50% Wedding
- 40% Birthday
- 10% Christening
So your sales target 'Pie' is going to be sliced into:
- Wedding = £10,000 x 50% = £5,000
- Birthday = £10,000 x 40% = £4,000
- Christening = £10,000 x 10% = £1,000
Within those, you will have Sub-Categories and Products.
The FLOURISH RANGE PLAN makes it easy to see your
Categories, Sub-Categories and the products within them.
PRODUCTS & QUANTITIES
You've sliced up the pie.
Now it's time to look at the filling (a.k.a. Products).
To get the perfect filling (and happy customers), you need the right number of products, in the right quantity. It's a balancing act.
Let's have a look at what you should consider.
where are you selling?
- Online: Your customer sees an image of your product on the website.
Each one takes up the same amount of space, whether you have 1 or 10,000
of them. It means you can have a bigger number (width) of products in smaller quantities.
- Stores: You customer will be able to physically see and touch your product. But you'll need to have enough products to fill the space you are paying to display them in.
You'll need to understand your retail space and buy the right number (depth) of products to entice your customer.
Quantities & sales demand
- Buy or make too much of a product, and you will have to mark it down to sell it. You'll lose profit.
- Too little means the scales will tip the other way, and your customer will be disappointed. You won't generate the sales and profit you need.
- Having the right quantity of each product means you will meet your sales demand, have happy customers and maximise your profit.
(I talked about Sales Demand in our Insight).
You have decided:
- The number of products you will have in each category.
- The quantity of each product that you'll make or buy, based on your sales demand.
- The selling price of each product.
Product x Quantity x Selling Price = Total Sales Value*
(*if you were to sell it all at Full Price)
A FLOURISH RANGE PLAN adds up your categories for you so that you can see:
- Is each category the right size?
- Does it need to be bigger or smaller?
- What does the total range look like?
- Do you have more sales opportunity or a risk?
Then you've successfully written your shopping list.
A detailed view of what products you need to make, or buy.
+ HERE'S A HANDY EXAMPLE
Back to the Cake Toppers.
You know your sales target for the year is £10,000, and you have sliced it into Product Categories, based on the mix of sales you have been taking.
Let's take the Wedding Category, which was 50% of the mix (£5,000).
Within this are your Sub-Categories:
- 50% are 'Mr & Mrs'
- 30% are 'Just Married'
- 20% are Bride & Groom Initials
So your £5,000 slice of pie will now be cut into:
- 'Mr & Mrs' = £5,000 x 50% = £2,500
- 'Just Married' = £5,000 x 30% = £1,500
- Bride & Groom Initials = £5,000 x 20% = £1000
Let's take 'Mr & Mrs' and work out how many Products you need to have in this sub-category.
You can see from your Sales & Analysis, that you have sold 140 units over the last year and taken £2,100 in sales.
That means that your AVERAGE SELLING PRICE (ASP) is £15.
- Total amount of sales / Number of products sold = ASP
- £2,100 / 140 = £15
Your sales target is £2,500 for the Sub-Category.
How many units do you have to sell totally?
- Sales Target / Average Selling Price = Total Sales Units
- £2,500 / £15 = 167 (rounding it up!)
Now you know you have to sell 167 units @ £15 each to achieve your sales target of £2,500:
- 167 x £15 = £2,505
How many products do you need to have?
Let's work out your AVERAGE SALES UNITS.
Over the last year, you've been selling 4 different types of Mr & Mrs Cake Toppers and you sold 140 units.
So your AVERAGE SALES UNITS (ASU) is 35.
- Total number of products sold / Number of products = ASU
- 140 / 4 = 35
You now know that you need to sell 167 units this year to hit your sales target.
If you assume that you won't sell any more units on average, how many products do you need to have?
- Total Sales Units / Average Sales Units = Number of Products
- 167 / 35 = 5 (rounding it up!)
Now you know you need 5 products.
By looking at your Sales Analysis and current trends, you decide which products you should offer.
You see that:
- Your Gold 'Mr & Mrs' Cake Topper has been selling double your average sales units, and you sold out of them a couple of times.
- Your Silver 'Mr & Mrs' Cake Topper sells the average amount.
- Your Pink 'Mr & Mrs' Cake Topper hasn't been selling very well.
You only sold 1 in the last couple of months, so you decide to stop selling it. As Rose Gold is on trend, you add that into your range so you can see how it sells.
- Glitter has been selling more every month, so you should sell more units totally. You charge a bit more for those at £18.
You plan your range as follows:
75 Units @ £15 = £1,125
35 Units @ £15 = £525
- Rose Gold:
17 Units @ £15 = £255
40 Units @ £18 = £720
Total Units = 167
Total Products = 4
Total Sales Potential = £2,625
You didn't need 5 products, because your Gold 'Mr & Mrs' Cake Topper sells more than the others.
Your Average Sales Units are now:
- Total Sales Units / Number of Products = ASU
- 167 / 4 = 42
You have more potential sales in the Category, because the Average Selling Price is higher than before, where you are now planning to sell more of the £18 Glitter 'Mr & Mrs' Cake Toppers.
- Total Sales / Total Units = ASP
- £2,625 / 167 = £15.72
You've written your Shopping List!
Giving your customer what they want, when they want it, means they will be
more likely to buy from you.
You are planning when to launch, update and stop selling products in your range and deciding the lifecycle of each product.
By using your Range Plan, you can look at your range through your customers' eyes, ensuring you have everything they want to see and buy.
That you have enough products and stock, at any point in time, to achieve your sales and profits.
+ HERE'S A HANDY EXAMPLE
Imagine you are selling dresses.
In your 'Going Out Dress' category, you have 15 products in these Sub-Categories:
- 6 x Bodycon Dresses
- 4 x Skater Dresses
- 3 x Wrap Dresses
- 2 x A-Line Dresses
Let's have a look at the Bodycon Dresses:
- 1 x Black @ £35
- 1 x Black @ £50
- 1 x Red @ £35
- 1 x Green @ £35
- 1 x Floral @ £40
- 1 x Print @ £40
The two black dresses offer customers two different styles at different price points.
- The £35 Black dress sells continuously, so you will run that one all year.
- The £50 Black Dress is sleeveless and has embellishment on it. Although it is black, it offers something different to the £35 black dress. When you get to Christmas, you will replace the £50 dress with a winter version. You should plan when the £50 black dress should sell out before Christmas to avoid markdown.
- The Red and Green are the colour dresses you currently offer in the same shape as the £35 Black dress.
You will update the colours every couple of months to keep it exciting and encourage your customers to buy the new version.
- The Floral and Print dresses are based on the trends and seasons.
You update these every six weeks to offer something new.
By planning when each of these products will launch, update and be sold out, you are optimising your range. Making sure you have a great offer for your customers and enough product and stock to achieve your sales target.
Your FLOURISH RANGE PLAN helps you to plan each product.
Go forth and delight those customers!
You've created your shopping list and planned each product lifecycle.
Now it's time to add the finishing touches with your Marketing; all the different elements that go into promoting and selling your product or service in a thoughtful and timely way.
You can use your FLOURISH RANGE PLAN to provide you with snapshots in time.
Knowing when your products launch or update, means you also know when to talk about them to your customers.
You can also schedule them into your FLOURISH TRADING CALENDAR, to maximise your time and sales.
Altogether a winning combination, for you AND your customers.