Answers

(1) Most people do not keep any records of delivered sales. The significance of this question is that, at more than 900/o of the companies where we've had access to the figures, retailers are losing money on delivered sales.

(2) Very few retailers bother with this. They just know what is profitable and what is not. Our experience of checking thousands of loads has shown that over 400/o of all deliveries made were handled at a loss.

(3) Seldom is this figure computed, posted or known and the answer usually is "no." This information means different things to different retailing segments. Delivery costs are recovered either through direct charges, gross margin or a combination of both. Knowing the average sales value gives management a fast handle on the profitability of each transaction. Delivery costs and recoveries are akin to service calls. If they are $40 or $50 in your area and you don't have that much margin for delivery built into your average selling price or direct charge, you're diluting your profit potential and cost recovery.

(4) Rarely are these profits identified outside of the total sales mix. Delivery costs can run as high as 300/o of daily operating expenses and, as such, usually rank number one or two in terms of expenses for the company's total sales effort. When laid against delivery sales margins the arithmetic can look very ugly.

(5) Everyone has a system of some sort, but its effectiveness is measured in the size of the load when the truck leaves the store, combined with how lar it must travel. It costs about the same to run the truck whether it's empty or full. Experience shows that most trucks are half full when they are released.

(6) The purpose of a delivery poticy is to direct activities of all concerned in a routine manner while, at the same time, maintaining smooth, uninterrupted and profitable flow of goods and service to the customer. If you could scale such a policy's impact, you would want for a job one yard long35" ofroutine and l" of

Delivery Pra

Ctices Questionnaire

1. DO YOU ROUTINELY RECORD AND 'IOTAL DELIVERED SALES ON A DAILY BASIS?

2.

HAVE YOU IDENTIFIED THE PROFITABLE DELIVERY BOUNDARIES OF YOUR TRADING AREA?

DO YOU KNOW THE AVERAGE VALUE OF EACH OF YOUR DEI. IVERI ES ?

DO YOUR P & L STATEMENTS ACCOUNT FOR PROFITS PROM DELIVERED SAIES SEPAR,ATELY?

DO VOU EMPLOY A LOAD MANAGEMENT SYSTEM TO INSURE EFFECTIVE UTILIZATION OF YOUR TRUCKS?

DOES YOUR COMPANY TTAVE A WRITTEN AND POSTED DELIVERY POLICY?

! T T tr n tr tr tr ! n tr 6. 7, special handling. It's the main framework of the delivery day's activity in the eyes of both your employees and your customers.

(7) There is only one reason to work overtime in the retail business and that is if you're crazy enough to sign a union contract guaranteeing it. A 50 hour work week is 250/o more hours, but almost 38% more in payroll cost.

(8) Either by location or dollar, you'll find that 20% of your customers will produce 80% ofyour business. You have to know who and where they are.

(9) Generally merchants shop one another for price and product but seldom are services shopped. The knowledge that someone does or does not charge f,or services can be enormously valuable. Such information allows for competitive

TOTALS 9. (Continued on next n n T n x n u x n n I recovery of costs by charging for services. It's been known to reduce costs by as much as 250/o in terms of money collected plus money not spent.

DO YOU OR SOMEONE AT YOUR COMPANY NORMALLY THE DEI,IVERY SERVICE OF YOUR COMPETITORS?

(10) One million dollars is not very much when you break it down by a 40 hour week, or 2080 hours annuallY. That's $481 per hour and $500,000 is $240 per hour. The average delivery payload nationally is way below $1,000,000 per truck annually for retailers.

Here's how you stack up and what it means. One test group of 40 retailers averaged five NO answers and five YES answers each. Two answered NO to all ten questions; no one page)