Return rate?

[whitneyd74]

How do you figure out the return rate for your office, per frame line?

[AdmiralKnight]

I'm assuming you mean which frames sell. It depends on a couple things. If you have a good POS/Inventory program, it should be able to keep track of it. Other than that, you can either manually keep track of which frames sell, or ask your reps when they come in. They should be able to tell you which frames have sold and how many you've sold.

[cocoisland58]

Are you trying to manually figure turnover rate?

[whitneyd74]

I am - should I not be? I was recently asked what my return rate was and my turn percentage. ???

[finefocus]

I am - should I not be? I was recently asked what my return rate was and my turn percentage. ???

Most optical dispensaries should have an Inventory Turn of 4x, which is to say, if you have a $50,000 inventory, you want annual frame sales of $200,000.
You have to separate your lens sales from your frames; you could estimate that as a percentage. I've seen a 60% lens, 40% frame split proposed, but your actual percentage will vary. If you have 3rd party reimbursements to factor in, that also changes things, so decide to include, not include, or calculate on the side.

[CME4SPECS]

inventory turnover =cogs divided by avg. inventory
avgerage inventory = beginning inventory + ending inventory divided by 2

[whitneyd74]

Thank you for the excellent responses, but now I'm confused. As a buyer in the office, which formula should I use when evaluating a vendor's performance in numbers? I have the relationship notes from OptiBoard (fabulous, by the way) and have used so many of the different opinions and they have helped me a great deal. So thank you!

Now I just need help evaluating from a data perspective! I need to know how a frame company is performing overall (net sales/board space ???) and then I'll break it down by line. I just need to know where to start.

Thanks!

[cocoisland58]

Here's what I do which is probably more involved than it needs to be and it's all manual here. I keep track of sales per line. Each vendor has an alloted amount of spaces on my board per line which may increase or decrease depending on turnover. If I have say 12 slots for a certain frame line and I am selling 12 per year then that is a turnover of one. What I want to see is a turnover of at least three and four would be great. Some lines turn over more than four times so I know that that line should be increased while the one turning over only once or less than once should be descreased or eliminated completely. Also I do a market analysis based on percentage of customers buying frames and their age and sex. This allows me to increase or decrease where needed. Next time they hold a local mini expo in your area, take advantage of the frame board management class. It helped me a lot.

[finefocus]

One more thing - not every line will have the same turn rate - it may be 10x on your most popular line, much less on some other line, BUT - you may need that lower performing line anyway, to service niche customers, to dazzle them with your broad selection, to avoid having to say "we don't have anything like that", and to utilize the Vance Packard principle (use the red convertible in the window to sell the grey sedan".

[cocoisland58]

One more thing - not every line will have the same turn rate - it may be 10x on your most popular line, much less on some other line, BUT - you may need that lower performing line anyway, to service niche customers, to dazzle them with your broad selection, to avoid having to say "we don't have anything like that", and to utilize the Vance Packard principle (use the red convertible in the window to sell the grey sedan".

Quite true. I always keep the big old man frames though they sell through slowly as well as the XXL line for huge heads and the odd large zyls etc. You never want to say "I don't have anything like that but I can order it for you". At least you don't want to say that very often.