3 Category Management Tips to Increase Your Profits

How will category management help you maximize your profits?

One of the main tips often given by experts in the Fast Moving Consumer Goods (FMCPG) industry is that we should be able to identify the most critical product categories based on volume, profit margins, demand drivers, among others.

As part of this process, it is essential to conduct the Pareto test to identify what is the 20% that gives us 80% of our earnings. This analysis is relevant to obtain profitable results.

Category management for optimizing sales and profits

Learn how category management can benefit your business.

  1. Place high turnover items with the most profitable. Identify areas of the store with the highest customer traffic, such as peripheries, fruits, vegetables, dairy products, meat, etc. This strategy puts the products with a more significant margin in front of the majority of the clients where items of high rotation are.
  2. High visibility. The location or positioning of any product is crucial. Placing in the right spot lets you combine it with other items. Not only the size of the purchase will increase, but also your earnings per transaction.
  3. Training. Training your employees with these principles will make them better executors of the category management strategy. You often see items with oversaturation in stores or inappropriate places for decisions made by inexperienced. Training your workers will allow you to avoid these mistakes as they will make the correct decisions that guide the highest profits.

Related Article: What is Category Management and What is it for?

One of the advantages today is that manufacturers have useful market information such as trends that guide us where the market moves. This information allows us to make better purchase decisions, take care of our inventories, and other benefits.

Use these category management tips this winter season in your store. Give your business a new and fresh atmosphere. Your customers will always appreciate it.

We’re curious: What are your category management tips? Tell us in the comments!