This week we are going to focus on a topic that's very important to any product business, the sales mix. Stitch makes it very easy for someone to quickly see if their perceptions of what is going on with the business are true. For example, you may know what your best seller is, but if that product isn't helping you make a profit, it won't be long before your business is upside down.
We often speak to customers about their best sellers, but many times, they're so focused on selling more of the "popular" item, they forget to focus on the "profitable" item. We're not in the business of telling people what to sell, but we did make sure Stitch was set up in a way that provides information for people to make the best decisions for their specific business. In this example, we're going to look at three major sales mix metrics (unit sales, sales dollars and profit).
In Stitch, there are many reports that help people make informed decisions, for this example, we're going to look at the "Product Family Drill-Down" report. You can set your time frame, the type of report your looking for (product report), and the specific report. Then, generate your report.
Stitch magically generates all the above metrics that allow you to quickly see your sales mix. We'll focus on the product family that sells the most units for this example (Adult SF Dinosaur T Shirt).
As you can see, Adult SF Dinosaur T Shirt is our best selling family (by units). It actually sells nearly 25% of our total units. That's great, but this is where you need to really focus on the sales mix to tell the whole story. Let's turn to the dollar sales portion of the report (aka revenue).
In this area of the report, the story begins to change. You can see that the Adult SF Dinosaur T Shirt family has moved down the line when it comes to dollar sales generated. It's generating just over 10% of your total dollars. This is still good, it's in our top 5 product families, but because it's selling at a lower price point than some of our other products, it's not generating as much revenue as our other product families. Finally, lets see where the Adult SF Dinosaur T Shirt family falls on the profit line.
In the profit portion of the report, you can see that the Adult SF Dinosaur T Shirt family isn't even in the top eight families. Because we didn't want to make the graphs too crowded, we limited the amount of data that can be seen in graph form. But, if you scroll down in Stitch, you can see a fully detailed, printable report of all the information you need. This is for all those data junkies out there (that aren't as into graphs) and also so you can have printable reports at tax time. Here you can see that the Adult Dinosaur family is tenth in profit and is only making a margin of 11.3%. That's not a lot of cash for a lot of work my friend. Again, this isn't to say you want to quit pushing your Adult Dinosaur T Shirts, but you do need to understand what type of resources to put behind them, and maybe even know if you need to bump the prices up a bit.
Focusing on sales mix is very important. Not only is it important to focus on which mix will help you generate the right amount of money, but it will also help you understand where to focus your marketing and production dollars. Stitch makes it very easy to identify where to focus your limited resources of both time and money.
That's it for this week, please let us know if you have any questions. Happy selling!