Fun and Profit From Your Square Inch Analysis Report
2. Number. Give each depiction a number, such as "2A" (page two's first depiction), "17C" (page 17's third depiction), etc.
3. Calculate Catalog Cost. This requires a couple of steps:
- Total selling square inches in the catalog: add together all square inches for all depictions (ignore nonselling space like editorial and ink-jet areas).
- Total marketing cost: add together all the costs to create the catalog and get it to the customer (e.g., photo, design, copy, production, print, bind, mail, postage, management).
- Divide total catalog costs by total selling square inches in the catalog to get the average cost/selling square inch.
4. Calculate other costs.
- Cost of goods sold: raw materials plus inbound freight plus receiving labor plus labeling, kitting, packaging, etc. (i.e., costs to get SKUs onto the warehouse shelf ready to pick). Use cost per SKU if you know it, or average percentage of sales.
- Order-taking cost as an average percentage of sales: call center, order entry, etc.
- Fulfillment cost as an average percentage of sales: pick, pack, ship, shipping cartons, etc.
5. Enter data. In a spreadsheet (or in your order management system, if it has sqinch reporting), log for each depiction:
- page number;
- depiction number;
- square inches in that depiction;
- every SKU number — and its description — being sold in that depiction (hopefully you can pull this info right out of your regular sales-by-SKU report); and
- sales for each SKU.
With all data in hand, your report can now be built by your order management system, a helpful programmer or by hand right in the spreadsheet.
The resulting report is great. It can be sorted many ways, you can see summaries and top 10 lists, or drill down to detail. Best of all is summarizing key data onto labels you can stick right in the catalog to see at a glance each depiction's sales and percent over/under breakeven. That lets you visually correlate sales and breakeven to presentation, page position and space, as well as start getting creative on your next presentation and design.
Susan J. McIntyre is Founder and Chief Strategist of McIntyre Direct, a catalog agency and consultancy in Portland, Oregon offering complete creative, strategic, circulation and production services since 1991. Susan's broad experience with cataloging in multi-channel environments, plus her common-sense, bottom-line approach, have won clients from Vermont Country Store to Nautilus to C.C. Filson. A three-time ECHO award winner, McIntyre has addressed marketers in Europe, Australia and New Zealand, has written and been quoted in publications worldwide, and is a regular columnist for Retail Online Integration magazine and ACMA. She can be reached at 503-286-1400 or firstname.lastname@example.org.