The Anatomy of Buying

(Continued from page I4) a simple ratio between_average invested cost and gross realized margin dollars. Undersuand and measure this ratio. It's the basis for most of the outlandish selling prices you compete against A $l gross margin realized on-100 items sold over a weekend can be extremely profitable, particularly if they were received on Thursday ariC are gone by Monday. In essen@, you sold the merchandise bJfore you h{ l9ay for it. Do that 365 days a year and you,ll leam GMROI for tife.

Seasonal Buys: Measure the number of selling days in last year's season. If it's 20 days long, every day is 5% ot tbe season. If you run out of merchandise be'fore the end of Fj_*qp-o, great. If you have 50Vo of your purchases with zJ'to oI ttre season left, take s,ome mark downs.

Reordering: _If you're computerized, automate your purchase orders. Seasonal and commodity buys have io be managed manually.