Running a retail or convenience store can be challenging, especially when you’re trying to grow your business. To succeed in today’s market, it’s important to stay ahead of the curve and overcome any obstacles that come your way. Regardless of the type of store you run, inventory is a key metric for any DTC (direct-to-consumer) business. But it can be one of the biggest obstacles that can not only cost you more but also drain your time. You have hundreds or thousands of SKUs that serve your growing customer base. To make sure that it doesn’t cost you a small fortune, you always need to monitor inventory counts, ensuring that inventory records are completely accurate. While it may seem that counting inventory isn’t a challenging task, when it comes to moving tens of thousands of units through the supply chain, counting each item manually becomes impossible. This could ultimately result in stalling operations, underutilized labor, inaccurate financial reporting, and much more. To prevent these issues from happening, many retailers rely on the retail inventory method to account for their inventory. A retail inventory method allows you to calculate your inventory without performing a physical inventory count. This method was created to help retailers save time they spend on counting and managing inventory. But what is the Retail Inventory Method? Today’s guide will help you learn more about the Retail Inventory Method (RIM) and how to run calculations. What Is Retail Inventory Method? The RIM or retail inventory method is defined as an accounting strategy to calculate your inventory over time. It relies on the cost-to-retail ratio i.e., comparing the purchasing cost of your product to the price it is sold for. While it serves as a shortcut to physical inventory count, it’s important to note that it isn’t always 100% accurate. It works best for the products that have the same markup. For instance, it isn’t the best method if you are calculating the value of wine, which has a 50% markup, and shirts that have a 100% markup. Instead, it works best when you compare the same products. Understanding The Retail Inventory Method As a retailer, you probably have invested a lot of cash in stock, which makes sense, as buying inventory is essential to ensure that you have enough product in hand to capture every possible sale. However, doing physical inventory is one of the most time-consuming tasks most retailers fail to manage. This is where the retail inventory method comes in. It is one of the fastest and most cost-efficient ways to keep a pulse on the value of your inventory every month. A retail inventory method allows you to monitor your inventory so you can make informed decisions on ordering stocks, the type of merchandise you need to invest in to boost sales, and the type of products to carry. Why Retail Businesses Should Use the Retail Inventory Method? The retail inventory method is a helpful tool that assists retailers in managing their inventory. The top reasons why retail businesses should use the retail inventory method are as follows. 1. Simplifies Inventory Count Process No need to close the doors of your shop to count your inventory. RIM simplifies the inventory count process by allowing you to count your stock at any time. It saves you from spending much time reviewing purchases and invoices. 2. Time & Cost Efficient RIM is a quick and efficient tool that saves you valuable time in calculating the inventory. It even saves you extra costs that could arise if the workers need to work long hours counting inventory. You can easily manage other business operations without getting worried about the inventory.  3. Applicable For Any Retail Business RIM isn’t limited to any certain retail business. Instead, every retail business, regardless of its size and type, can use the retail inventory method. The best part is you don’t need to be an expert or exceptionally good at accounting to get it right. How To Calculate Inventory by Using Retail Inventory Method Calculating your monthly ending inventory value by using the retail inventory method isn’t difficult. You need to first figure out the total sales, cost of goods, and cost to retail percentage. Now, you might be wondering how to get the cost of goods, sales, and cost to retail percentage to find the ending inventory value. Don’t worry, here are the steps that you can follow to calculate the monthly ending inventory.  Step 1: Calculate Cost-to-Retail Percentage To calculate the cost-to-retail percentage, you need to divide your cost by the retail price and then multiply it by 100 to get the percentage. For Example: If you are selling a bottle of wine at $30 and purchase each bottle at $10, the cost-to-retail percentage would be Cost/retail price x 100 = cost-to-retail percentage 10/30 x 100= 33.33% Step 2: Calculate The Cost of Goods Available for Sale To figure out the cost of goods available for sale, you need to add your beginning inventory cost to the cost of newly purchased inventory. For Example: Consider a liquor store’s beginning at-cost inventory was $10,000 (1000 units = $10,000/$10), and it purchased $20,000 (2,000 units = $20,000/$10) worth of additional inventory during the month. So, the cost of goods available for sale would be Value of Existing Inventory + Value of Newly Purchased Inventory = Cost of Goods Available for Sale $10,000 + $20,000 = $30,000 Step 3: Calculate the Cost of Sales To calculate the cost of sales, you need to add all your monthly sales and then multiply the total by your cost-to-retail percentage. For example: Consider the liquor store sold $6,000 worth of products ($6,000/10 = 600 units) in the same period and the cost to retail percentage is 33.33%, which we get from the example in step one, then the total sales would be Sales during the period x cost to retail percentage = cost of sales $6,000 x 33.33% = $1,999.8 Step 4: Get The Ending Inventory Value

Thinking about opening a liquor store, but don’t know where to start? Whether It’s a New Year’s Eve or a birthday celebration, people can’t resist buying a bottle of their favorite wine. Therefore, a steady revenue stream can be expected in all seasons. Managing any business requires end-to-end management. You need to do a lot of tedious work, and liquor businesses are no exception. Starting a liquor store business is no easy challenge. From inventory management to customer satisfaction, keeping track of everything can be overwhelming. While it may seem daunting, with the right strategy you can build a liquor business that generates a steady income. However, it can be difficult for you to know where to start. But don’t worry, Modisoft’s startup guide will help you learn how you can start a profitable liquor store business in the United States. Pros of Starting a Liquor Store Owning a liquor store might seem like an exciting opportunity to generate revenue, but it also comes with way more challenges than any regular business. You need to abide by state and federal law and be legally compliant. The good news is that several benefits come along the way when you step into the liquor industry. Let’s know the pros of starting and operating a liquor store. 1.    Recession & Inflation Resistant Do you know what the biggest fear of starting a business is? It’s the rising inflation and recessions that can severely impact your business revenue. After all who wants to lose the profits? Fortunately, the liquor store business is amongst those businesses that are recession-resistant.  Regardless of the economic climate, the alcohol industry not only survives but thrives. Even during WW2, the U.S. government declared beer brewing an essential wartime industry. When times are tough, people might change where and what they drink, but history shows that they won’t stop drinking. 2.    Stable Inventory The shelf-life of a product is a major factor that can influence your business revenue. Liquor store businesses enjoy extended shelf-life resulting in stable inventory. Many liquor types don’t have expiration dates, and in fact, some drinks that are stored for a long period offer an enhanced taste to the customers. However, stable inventory doesn’t mean that you should be overstocked. Excess liquor inventories can take up valuable shelf space and tie up capital. To avoid this issue, you can switch to Modisoft’s most advanced liquor store inventory management system which uses historical sales and inventory data to help you make informed decisions that positively affect your bottom line. 3.    Less Competitive Did you know that the liquor industry is less competitive than other industries? The strict state and federal regulations let American State control the importation, distribution, promotion, and sale of alcohol. While getting a license for your liquor won’t be easy, once you have it, you’ll enjoy the freedom to do business in a less competitive environment. It is less likely that you’ll be surrounded by other liquor store businesses in that geographical location. Cons of Starting a Liquor Store No business is a cash cow unless you spend money, time, and resources to make it sustainable. Similarly, when it comes to liquor stores, you can’t expect to be profitable from day one unless you strategically plan every little thing. Therefore, before owning a liquor store you need to consider the disadvantages. Here are the top cons that you need to evaluate when planning to open a liquor store business. 1.    High Inventory Cost The first challenge that you need to face is the high inventory cost. When you are starting a liquor store from scratch, you’ll need to have strong financial backing. The initial setup and real-estate costs can be quite high depending on the location you choose. To avoid high inventory costs, you need to fund your business appropriately and manage your resources wisely. 2.    Restricted Liquor Distribution Do you know what the biggest downside of the liquor store business is? It’s navigating the product tier system which is regulated on a state-to-state basis. The Alcohol Beverage Control Board of every state establishes rules for liquor retail sales within their territory. They also enforce strong penalties on any business that bend or break these laws. Is Owning a Liquor Store Profitable? Owning a liquor store can be exciting but at the same time can be challenging for newcomers. You have to establish your presence, get a license, hire employees, and much more. So, is it worth spending thousands of dollars? Can you make a sustainable profit from your liquor store or is it a lucrative industry or not? You might be thinking about these questions while conducting your research. No business is a fail-proof business. Around 20% of businesses fail in their first year. But that doesn’t mean you can’t make a profit by owning a liquor store. The liquor industry can be incredibly lucrative if the right management and strategies are implemented. In general, liquor store businesses are more profitable compared to grocery and convenience stores.  On average, a single convenience store can make up to 5% profit, while liquor stores have the potential to make up to 15-20% of the profit.   Pro Tip: If you’re considering signing up for alcohol delivery, you can switch to the Modisoft Cartzie App which makes it convenient for your customers to order their favorite brands from the comfort of their home. How Much Does It Cost to Open a Liquor Store? Budgeting and forecasting appropriately is necessary to open a successful liquor store. Knowing how much it will cost to open a liquor store is vital to calculate. Liquor store startup costs can vary depending on the location, inventory, license, and much more. This type of business works differently. You need to first find the retail location before you can get a liquor license. The property cost can vary depending on whether you are signing a lease or buying it. However, you can expect to invest a minimum of $50,000 to $100,000 when

Regardless of what economic times we fall into, the need for groceries will always be there. People will never stop purchasing food, so the demand for groceries will never fade. Because of this, many entrepreneurs have thought about opening a grocery store business of their own. While opening a grocery store business is similar to starting a convenience store, there are many aspects that you need to look out for before you open your store. In this niche, you’ll find that big chains are dominating the grocery store industry. So, what will it take for you to make a dent in the industry? You can open a grocery store in 2024, and still make it a profitable business regardless of how competitive the market is. With diligent management, the odds are stacked in your favor. And if you’re following a proper roadmap nothing can stop you (a small business owner) from earning good profits. The Modisoft grocery store startup guide will cover everything you need to know in order to get your grocery store business off the vine. So, whether you’re a seasoned business owner or a first-time entrepreneur we’ve got you covered with the tools needed to open a profitable grocery store in 2024. Pros & Cons of Starting a Grocery Store In 2024 Starting a grocery store is considered rewarding and profitable, while the ladder toward profit is no easy feat. You have to research your business industry thoroughly and understand your target audience before you’re able to take your first step. Here are the top pros and cons that are a must for you to know before you start your grocery store business. Pros of Starting a Grocery Store Security in Grocery Demand Considering the fast-paced environment we live in, it’s easy for businesses to get obsolete with time. For instance, if you go back in time, you’ll see that most items like VCRs, film shops, and floppy disks are hard to come by in today’s world.   Even today, after the revolution of AI, many industries are under threat of becoming obsolete. However, when it comes to grocery stores, they are a safer option to consider. They still need to adapt to modern technology, but it would take unprecedented economic times for grocery stores to become obsolete. Amazing Perks & Rebates Entering the grocery store industry comes with its perks and discounts. As a seller, you get the opportunity to provide massive discounts and enjoy perks on certain products/services. This is one of the major benefits that a grocery store owner gets. You can join a rebate program, differentiate high-profit and low-profit products, get inventory on credits, and much more. Easily Build Relationships As a grocery store owner, you’ll be able to forge relationships and partnerships with other businesses. If you’ve selected a neighborhood location and you find that you’re the only one, then it is super easy to convince other businesses to become referral partners. You’ll get the first-mover advantage in that area which will increase your chances of attracting an audience. Potential To Earn Profits The profit margin of essential food products is generally low, but you can still earn good profits by developing the right pricing strategy. The more products will sell, the greater the profits you’ll make. Independent grocery owners also consider adding more revenue streams by increasing more relevant products according to the season. Wide Product Offerings Grocery stores have the advantage of having a wide market that is not limited to certain niches. From low-income groups to high-income groups, you get customers of every type. To increase your chances of getting optimal benefits, you can consider adding the products your customer base needs. For instance, you can add kitchen spices, cleaning products, bath products, hygiene products, canned food, etc. Cons of Starting a Grocery Store Managing Inventory Can Be Challenging Inventory management is one of the crucial aspects of running a profitable grocery store. You need to get rid of early stockouts and prevent overstocks. With the high level of transactions, it is a challenge for grocery store owners to track and manage inventory effectively. These issues can be resolved by automating your process by adapting modern technology like Modisoft Inventory Management System. Highly Competitive Market The grocery business is a booming industry as new brands are getting established in the market. Shopping malls are introducing grocery stores to accommodate every customer’s needs. This means that this is a highly competitive market dominated by Walmart, Kroger, Costco, Amazon, and many others. But you can still make your first move by identifying the ideal neighborhood location. Overhead Costs Overhead costs are one of the major obstacles that prevent most entrepreneurs from opening grocery store businesses. With a physical store, you must pay rent, insurance, renovate the store, security, and a whole lot of other expenses. Although it varies depending on the location and management skills you have, a slight mistake can make you exceed your budget. This could be overcome by having the right business plan that can help you get maximum funding, avoid unnecessary spending, and manage inventory. The Future of Grocery Retail The grocery industry is not only highly competitive but also a bit complex. The simple neighborhood stores have now evolved into international mega-chains of 3,000+ stores carrying thousands of products. To serve the consumer desire for quality, value, and choices, the grocery industry evolved rapidly. Therefore, you need to understand the future of grocery retail before planning to open one. In 2024, as the diversity of the consumer has increased dramatically across many dimensions, the industry is becoming increasingly creative in attempting to fulfill consumers’ desires while striving to achieve profitable growth. The top forces that are disrupting the nature of the grocery business include Change in Consumer Behavior: Consumer behavior is changing rapidly. According to Statista, more than 51% of consumers preferred items on sale more than usual. Sales are still becoming the driving force to attract consumers, but the rise in online retail and

Are you planning to open your convenience store but don’t know where to start? Well, you’re in the right place. After serving thousands of convenience stores in the United States, Modisoft observes the trials and tribulations of the most successful store owners and we have found one thing in common. Most successful convenience store owners follow proven formulas and take inspiration from industry leaders to run a profitable business. But as a newcomer, you might get overwhelmed by the tons of content available on the internet. Don’t worry, Modisoft brings you a step-by-step guide that can help you achieve what other industry leaders have done. Why Invest in a Convenience Store In 2024? As an entrepreneur, you might be wondering if opening a convenience store is the right step for you. Investing a lot of money comes with fear and risks. But you may be happy to know that the convenience store industry is booming. In a report released by NACS Magazine, the number of C-stores has grown and reached over 150,000 in the U.S. As the US population stands, that means there is only one convenience store for every 2,225 people. This means that there is still a huge gap and potential for new players to enter the industry. According to Precision Reports Insights, the convenience store market is anticipated to rise at a considerable rate between 2024 to 2031. Thus, it’s the perfect time to step into this industry. But before you start, let’s have a look at what the future holds for convenience stores. The Future of C-Stores Convenience stores have been around for over 100 years and have weathered various market storms that other industries have struggled with.  A C-store in itself is a commodity, and that’s the biggest reason why it is still a profitable and popular business in the era of online retail culture. But there is no one-fit formula for all. Convenience stores, regardless of the location they choose, need to adopt modern technology and stay updated with the latest trends to cope with the market. Think of an old convenience store that refuses to upgrade and still contains the manual checkout process, poor lighting, and no option for curbside pickups. Do you think that store can sustain its presence? Never. Put yourself in the customer’s shoes. Would you consider a convenience store that has no convenience at all? Although the future holds a lot of potential for convenience stores to grow, you need to be quick in adapting to those changes to survive and thrive. How to Open a Convenience Store in 2024 Now that you are aware of the C-store and its future, it’s time to know how to enter the market. Just like any other business, convenience stores also need solid research, time, and money. There are crucial steps that you need to know before you start your convenience store in 2024.    To make the process easy for you, Modisoft shares all the steps that are necessary to know before starting a C-store in the United States. Step 1: Convert Your Idea into a Solid Business Plan Convert your idea into a business plan to ensure that you are on the right track. Many entrepreneurs often miss this crucial step that ultimately becomes one of the reasons why businesses fail. A business plan helps you clearly outline purpose, operations, strategy, and goals. Above all, it can be of great help when looking to obtain bank financing or securing a loan from other lenders. The key components of a solid business plan include Executive Summary Business Goals & Objectives Market Analysis Marketing Strategy Competitor Analysis SWOT Analysis USP – Unique Selling Proposition Financial Plan Overall Startup Cost Step 2: Pick Your Convenience Store Format You might be surprised to know that convenience stores come in all different shapes and sizes. Before you start your C-store, you need to plan out what segment your convenience store will fall into. These are just a few options that are available to you. Kiosk– If you are looking to go for a small startup, Kiosk is the perfect format. It generally occupies less than 800 square feet and sells items like tobacco, beverages, snacks, and candy. Mini Convenience Store- This store usually occupies 800 to 1,200 square feet and is a very popular model that runs alongside gas stations. It usually emphasizes gasoline sales, and most customers are people who refuel at gas stations. Limited Convenience Store- These types of stores are often affiliated with an oil company. Extended hours and striped parking are common in these types of C-stores. They have a broader product mix along with limited groceries. Traditional C-Store- This C-store category is very popular in the United States. The stores are about 2,500 sq feet and have product categories ranging from dairy, bakery, and snacks, to grocery, sweets, and much more. They are often open 24/7 and owned by oil companies. Expanded C- Store- These fall into the large stores category and have more shelving for additional grocery products. The expanded C-store occupies more than 3,000 square feet (about the area of a tennis court). They have proper seating, and parking facilities that attract families, women, and seniors. Hyper C-store- The hyper C-store covers up to 5,000 square feet and accommodates a variety of products and departments. They have a separate sit-down restaurant area, sometimes a pharmacy, and they often offer a bakery. Most customers are families, senior citizens, and traditional C-store customers. Step 3: Select Your Location Wisely Location plays a vital role in making or breaking a business. Selecting the wrong location can cost you thousands of dollars. If your location isn’t desirable, you won’t be able to attract enough customers, which results in lower sales and profits. Therefore, you need to take time to select your location. You need a spot that can be easily viewed, without an existing convenience store. Location selection depends on various sectors including but not limited to Research the audience demographics