Retail math refers to specific math concepts used in the retail industry. Retail math concepts are used in every level of operating a retail business. Some retail math concepts are simple, while other concepts involve advanced mathematical equations. Learning as much about retail math as possible can help owners, managers, employees and buyers in the retail industry increase productivity and profit.
Different types of retail math concepts are used depending on the role of the person in the retail industry. Proficiency in the basic math concepts of addition, subtraction, multiplication and division are recommended for general employees. A strong knowledge of percentages is also recommended. More in-depth retail math used by managers and owners still use only the most basic math concepts, but it involves more complex equations and formulas.
Retail math is used to determine a number of different factors that help keep retail businesses successful at every level. All employees should know how to count money, give correct change, and determine sales tax, shipping costs and discounts. Managers and owners will need to become familiar with the more complex retail math concepts. The basic retailing formula includes cost of goods, mark up and retail price. Other factors determined using retail math equations and formulas include markdown, gross margin return on investment, markdown, break-even analysis, inventory turnover and several other financial considerations involved in running a retail business.
Math can be an intimidating subject for some employees. While retail math concepts are based on simple math principles, it may be difficult for everyone to grasp. Some employees may not be familiar with the basic or more advanced terms used in retail math. Some employees who are well-versed in retail math concepts may be used to slightly different terminologies. All of these issues can be solved with education and experience.
When running a business that uses retail math concepts, keep in mind that not all employees are at the same math level. Screening potential employees using a retail math test during the application or interview process can help determine what level of retail math is understood. Providing retail math training courses and calculators can keep employees informed, updated and educated on what concepts are most important to the business. Giving employees a list of retail math terms and formulas used in the business can help with communication problems. Consistently updating and testing employees on retail math concepts can also be beneficial to everyday business operations.
Keeping employees in every level of a retail business informed about math retail concepts can help guarantee the success of the business. The more knowledge employees have of how retail math concepts relate to the success of the business and their particular role, the more likely they will be to increase skill levels and take an active part in succeeding themselves. Ultimately, this will benefit everyone involved.