Overhead does not need to be a curse – as long as it fits the need. We often hear retailers complain about the “curse of overhead.” Here at PCG we believe that overhead is only a curse when it is not aligned with the current needs of the operation.
Right now, projecting your overhead needs for after the Covid sales boost is as important as setting monthly company records for written sales today. Too little administrative and backend support as well as mismatched skill sets can be an even bigger obstacle to profitability and positive cash flow than too much overhead.
Constructing the proper levels of support staff for your sales, merchandising and marketing efforts is a unique challenge for each operation. It is a fluid, ever-evolving management exercise. Support resources that were correct six months ago almost certainly would not be in line with today’s sales environment, and probably won’t be six months from now either.
If you are a credit operation, or do a large percentage of your business utilizing third party financing, you will probably need more administrative staff than higher-end retailers where cash and credit card purchases are the norm.
A high turnover promotional to mid-priced retailer can probably utilize one or more third party logistics (3PL) companies to deliver their sold orders. A higher-end operation focusing on special order merchandise is usually more successful employing in-house delivery personnel, where extensive training, deep product knowledge and delicate handling are more critical.
Right now, there are certain areas of the country where experienced delivery personnel are hard to find, even more so than normal. Retailers are struggling to deliver product which only exacerbates delays due to supply chain disruptions. Those retailers are being hurt by not having enough overhead rather than too much.
There is no “right answer” for everyone … only what is right for you. Keep in mind that what is right for you today probably won’t be right for you after the Covid sales boost.
Reach out to us for immediate assistance with your business via phone at 404-432-2137 or via email.
