How much should I be spending on sales salaries? Sales salaries are one of the most debated areas of the retail landscape because different types of music dealers (full-line, combo/MI, school music, keyboard and print only) in different parts of the country find it difficult to determine appropriate compensation for sales staff. It’s not unusual to find salespeople feeling underpaid while the business owner (and many times the accountant) suggests that sales staff are either fairly, or typically, over-compensated.
How should I be reporting all of my store's revenues? “I laid off my repair technician three months ago because money was tight. We’ve been scrambling to catch up with the repairs and now my road rep told me we’ve lost four accounts because our repairs have gotten so bad. What should I do?”
Are you a music store owner with a lot of inventory and a lot of cash flow problems? Do you often wonder where your money is going each month, and why you still can’t take a decent owner’s salary? If the answer to these questions is “yes,” you probably don’t know what your GMROI is. This great analytical tool is for you! Regardless of if you have to calculate it by hand (even though your Po
How much inventory should I be carrying at any point in time? Managing inventory levels is arguably the most difficult challenge for any retailer, music retailer or otherwise.
In simple terms, "inventory turns" refers to the number of times you sell your entire inventory, in dollars, over a 12-month period. Your inventory turnover is calculated by dividing your cost of goods sold by the amount of average dollars invested in inventory over the same 12-month period. This inventory management indicator is becoming an even bigger issue in music retailing because of the i
What is Gross Profit and how much should I be earning? Gross profit is a financial term referring to the direct result of sales performance and impacted by a few different variables. While the sales price you earn and related cost you pay for a particular product chiefly determine the gross profit you achieve, there are other related variables that determine the gross profit you are earning.
How much inventory should I be buying for a store the size of mine? Buying inventory is easy—buying the right amount of inventory at the right time is a bigger challenge.
Why is inventory management important? Like all other business owners, executives and managers, music retailers have the inherent responsibility of carefully managing operating revenues, expenses and cash expenditures in an effort to preserve and maintain cash flow. But music retailers have the additional responsibility of managing inventory levels—the largest ongoing cash expenditure of any t
Alan Friedman talks about today's competitive marketplace, and why it’s imperative for music store owners to be able to generate, understand and act upon key financial reports, often on a daily basis. While generating sales and other revenues is “mission one” for most retailers, proper fiscal management is a close second in terms of the most important activities for any music store.
Welcome to NAMM’s Financial Management web resource. This site is intended to provide you with an online educational resource for “best practices” in the fiscal management of a retail music store. A variety of key financial topics will be addressed, with more to be added over time. These topics will be categorized under the following major financial areas of store operations: