He said, ‘You're looking at 'em.’ I said, ‘I'm looking for a job in store management training.’ He said, ‘What's your background?’ I said, ‘I’ve been selling electronics for three years.’ He said, ‘Can you start Tuesday?’ I asked him how much money I could make. And this is where it gets interesting. Back in Radio Shack's Golden Days they paid commission to Manager Trainees, but they shared profit with Store Managers. You made a bonus in direct proportion to the net profit you produced. If the store generated a net profit of 1 to 10%, the Store Manager made 10% of that number. But if the net profit percentage exceeded 10% the bonus grew as well. So an 11% net profit earned the Store Manager an 11% bonus on the net profit. 12% earned 12%. 13% earned 13% and so on. The goal was to hit 15%, which was a reach, but possible. Store Managers who achieved this goal earned a 15% bonus on the 15% net profit of the store. This was a hefty chunk of bucks and a powerful motivating force. This robust compensation plan set into motion a remarkable chain of behaviors. To increase the net profits of a store, you just had to learn every aspect of retail management. And it started with a thorough understanding of how a P&L works. The challenge then became: How can I make everything I do increase my net profits, so I can make a big fat bonus? You were concerned not just with sales, but how to add the accessories that help your customers get the most from their purchases. You were concerned about inventory management, visual merchandising, accounting, preventing shoplifting, sales training, and management. And it was up to you, the Store Manager. You felt as if you owned the store. You were concerned with every dollar of every transaction and you pinched every penny to control expenses. This pay plan rewarded Store Managers handsomely, but somewhere along the line the new RadioShack executives decided it was too much money. They forgot how this bonus plan built their company and they axed it. The Forgotten Secret of Merchandising During the Golden Days of Radio Shack, Merchandising drove Marketing. Bernie Appel was Executive Vice President of Merchandising and a bona fide retail genius. Observing him create new business with masterful buying and selling maneuvers was my Yale and Harvard. The game plan was simply this:
This is me posing for page 16 of Radio Shack’s 1981 catalog. I’m the one on the right.
Published on Mar 19, 2015
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