Resist thinking only about Gross Margin, Product and Price. It’s not just about product and price, It’s just as much about perception. Put more emphasis on developing a reason for customers to come into your store when there isn’t a promotion running.

Know how you are perceived; provide the best shopping experience; employ a variable pricing strategy; be consistent

There's many aspects you should consider to maintain an acceptable margin and steps you can take:

• Any change that increases sales while decreasing expenses results in increased profit margin
• Raising your price per unit while the cost of goods stays constant can produce profit margin gains
• Selling more units can have a similar effect but if the product costs more to acquire, the extra sales may not create the increase desired.
• Offering lots of Multibuys won’t suppress your GM. Selling everything at a very low margin would.
• Reduced expenses add to bottom line profit. The greatest gains are made when fixed expenses remain constant e.g. wages at 18-20% of sales, and sales soar. A lot of companies also keep administrative expenses tight because these activities don’t directly contribute to revenue

• Increase prices on selective items or ranges

• Review slower moving items. How important are they? Could shelf space be devoted to fast moving, profitable lines. Narrow your focus.

• Don’t teach customers to wait for the next sale! If you are always discounting to get a deal, you’re robbing yourself of profit. Every retailer needs a Promotion Plan

• Limit wastage – we advise to about 1% of sales

• Schedule employees according to need not according to their convenience

• Manage your supply chain. Support your most important suppliers and re-negotiate contracts
• Sell added value – people don’t want the hassle of figuring things out for themselves or screwing up their gardening endeavours
• Know your best customers and spend time with them

• Balance your marketing to ensure your advertising is not skewed to lower price items to bring more customers in the door

• Know who your high-end customers are and market to them. Allow products with lower margins to be the alternatives.

• Add product lines that command higher prices than those you currently offer – so long as brand consistency isn’t compromised

• Present products with professionalism using merchandising principles and techniques

• Remember the perceptions of a good operator - Housekeeping and Fairness.

These are reasons why it’s important to focus on everything you do in a garden centre to contribute to sales – there is no silver bullet, no one panacea that is going to fix Gross Margin

- Joy Lamb