Posts Tagged ‘ Inventory management ’

Total Automotive Part Numbers, ACES and PIES Data

Total Automotive Part Numbers, ACES and PIES Data

The automotive aftermarket has focused a lot on ACES and PIES product data standards in the past few years, so have you ever wondered how many total part numbers are in the automotive aftermarket? (Scroll down for ACES and PIES defined.) Note: for more information on PIES data read this more recent article. In the entire automotive aftermarket, including specialty parts and accessories, branded replacement parts and private label replacement parts, there are approximately 6 to 7 million base part numbers. (What’s a “base” part number? A part number that doesn’t explode to thousands of additional SKUs via different...

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Turn Earn Calculation and GMROI to Manage Inventory

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The Turn/Earn Index and Gross Margin Return on Inventory (GMROI) are two simple ways to help manage your inventory and run your business. Want to know what GMROI means? Read on! Turn-Earn Index definition Turn-Earn Index defined: Turn and earn is a ratio that analyzes inventory turnover and gross margin. To calculate multiply inventory turns by gross margin percentage. Using the Turn Earn Index to manage inventory If you’re a purchasing manager or accountant you may want to justify selling of stocking a SKU (stock keeping unit) with the Turn/Earn Index. Also known as the Turn/Earn calculation or Turn/Earn...

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How A Price Increase/Decrease Affects Gross Profit vs. Unit Sales

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(Note: if you just need to calculate gross margin or mark up, please scroll down.) If you want to increase gross margin with a price increase, you should know how gross profit is calculated and assuming a drop in unit sales, how many unit sales are needed to maintain the same gross profit. On the other hand if you’re considering a sale you should know how many additional unit sales are needed to maintain the same gross profit. You need to know how total unit sales can drop (for a price increase) or need to increase (for a price...

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Rule of Three Marketing: Market Share and Market Dynamics

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Why do some companies thrive and dominate their market segment, only to later become an afterthought? Market dynamics and the Rule of Three explains how some companies succeed and some fail. Most industries and market segments, including the automotive aftermarket, will have market share dominated by three competing companies. This article will take that a step further and show how companies using the Rule of Three can plan a market share strategy that will help ensure profits in the future. Rule of Three marketing defined To revisit an October 2003 article we wrote for SEMA News, market share is...

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Using the Pareto 80/20 Principle to Analyze your Business and Increase Profits

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Here’s how the 80/20 principle can be used to manage your business, reduce costs and increase your profits. You’ve probably heard about Pareto’s Law or the 80/20 principle, although most people only understand 20% of it, 80% of the time (rim shot!). This simple principle can be used to increase sales, profits and increase effectiveness of your marketing, and is easy to use. Vilfredo Pareto was an Italian economist and sociologist born in 1848. His big discovery in 1897, “Pareto’s Law,” claimed that in any society, 20% of the people would earn 80% of the income. Pareto’s observations, now...

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