As pool businesses are frantically keeping up with the demand for new pool construction and renovation, many pool businesses struggle to track their actual costs to ensure high-profit margins on each pool job. Unfortunately, with widespread shortages in supplies, backorders, and fluctuating prices across all areas of the pool and spa industry, businesses need to keep tighter control of inventory and ensure that product mark-ups are high enough so that profit margins on all jobs will cover both the company’s overhead and marketing costs. Although it seems impossible that profit margins on pools could actually shrink during today’s unprecedented demand, without tight control on costs and inventory, this is exactly what could happen.
Fluctuating prices across all pool and spa supplies has made it even more imperative that pool and spa businesses need to be up-to-the-minute on the cost they pay on all equipment, parts or supplies being used in a pool construction job or sold in the retail store. The RB Pool and Spa software offers an AP Costing feature that automatically updates all product costs through vendor integrations, allowing construction departments to adjust contracts and retail managers to adjust store pricing to ensure sustained profit margins.
Don’t forget that in the current market, continuously calculating profit margins on pools is even more important with so many changes in product costs. Knowing the cost of all products at all times allows you to calculate real time profitability. Remember that profit margin is the difference between your sales and your costs (materials, payroll, utilities, price adjustments). Having real-time costs in your inventory system allows you to ensure proper mark-ups. Use your profit margin target and your overhead costs to inform and determine your markup. This will ultimately ensure your profit margin goals and help you make smart purchasing decisions. Using an integrated pool and spa management software system will make tracking real time profitability much easier!
Purchasing decisions and having tight control of inventory have never been more important than during this summer. As mentioned earlier, the cost and availability of inventory will likely have the greatest impact on your pool construction profit margins this season.
Because there is limited stock of virtually every product, retailers and construction crews are doing physical counts much more frequently. Luckily, the RB Pool and Spa software provides a ‘Mobile Live’ feature that provides any staff member the ability to update physical stock quantities quickly and easily using a mobile phone or tablet. This particular feature is invaluable for ensuring your product inventory (and the costs associated with that inventory) is 100% accurate at all times.
Knowing that costs and inventory are of paramount importance this year, having the powerful RB Pool and Spa vendor integration feature allows purchasing agents to have real-time costs on all orders. Additionally, these integrations allow staff to track backorders and special orders for customers. Not only will you be notified when a specific item is received, but you can also designate specific product orders for specific customers. This allows you to quickly reach out to your client to arrange for pick up or delivery. Or, if the item received is not what was purchased, the system immediately flags incorrect items so staff can take swift action. Having vendors integrated into your business software ensures profit margins on pools remain on target in addition to helping operations remain efficient resulting ultimately in a higher level of customer service to clients.
Many pool and spa retailers are even reporting that they are using the ‘Sign Design’ feature in the RB Pool and Spa software to create signage to place on chlorine buckets (e.g. “Limit one per person”) or announcements of when products will be back in stock (e.g. “Skimmers in stock next week”). The information can be pulled directly from the inventory program, quickly printed and mounted next to the register or front door of the store. This proactive approach improves communication and service levels with customers and makes daily operations less stressful for employees.
Knowing that tight control of inventory is key to ensuring sustained high-profit margins on pool construction projects, having an inventory plan that includes your company’s trucks is very important. Tracking trucks in ‘real time’ helps ensure inventory levels are at optimum levels. Inventory history will then accurately report gross margin and turn data, resulting to obtain planned profit margins on pool jobs and improve buying decisions.
In fact, this can be particularly useful with service trucks that now carry increased inventory as they service more and more accounts. With more service vehicles in the field servicing new pool and spa owners, being able to identify each service truck as its own independent warehouse of products allows purchasing to manage each truck like managing multiple warehouses within your business management software.
For example, with RB Pool and Spa software, you can use the inventory reorder system alerts to hone in on inventory levels. This allows your operations person to run inventory reports at their leisure, replenish the stock site as needed and really keep tight control of inventory. The RB Simple Search inventory feature also allows businesses to search inventory by department, vendor, category or by typing any portion of the item’s description. This makes managing inventory, including transferring inventory from trucks to store or between trucks, far easier.
Additionally, pool and spa businesses that use pool and spa software with vendor integrations and a powerful inventory system, can make doing physical inventory tasks less daunting. Using RB Pool and Spa software, you can give your staff the ability to do physical inventory using the paper method, from printed reports within your business software or by using a handheld data collector or even using a smartphone or tablet with a mobile-live system.
The beauty of having pool and spa specific point-of-sale software is that it automates inventory management control systems in many ways. These software programs offer quick and easy inventory reports designed specifically to provide pool and spa builders, retailers and service companies the cost information they need to make important adjustments in pool construction contracts as well as in retail pricing. By having tight control of costs and inventory, pool and spa businesses will be able to ensure they achieve their desired profit margins on construction and renovation jobs as well and throughout their retail operations.