Monthly Archives: September 2024

Removing The Mystery Of Retail Barcode Numbers

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There is a lot of confusion about retail barcode numbers. It is common for the manufacturer of a few retail products to suddenly be told that one of their wholesalers or retailers wants barcodes on the products. So, suddenly, the manufacturer is thrust into the mysterious world of retail barcode numbers.

Common questions quickly arise. What is a barcode number? What type of barcode number do I need? Where do I get a barcode number for my products? Do I have to pay annual fees for a barcode number? How do I get the barcode image onto my product? Is there a central database where I need to register my barcode number? These questions and many others are faced by the manufacturer.

To help relieve some of the mystery, we want to help answer these common questions.

Barcode numbers are purely a unique number that is represented by a series of dark bars with light gaps between them. The actual number of the barcode is usually written below the bars. Barcode numbers come in many different formats. The most common retail barcode number is an EAN-13 barcode. These are 13 digit numbers, with the first 12 digits being allocated and the last digit being a calculated checksum, which is based on the values of the other digits. EAN-13 barcode numbers are commonly used on retail products throughout the world. It is important to note that there is no product information encoded in a barcode number it is purely a unique number. When a retailer first receives the barcoded product, they either scan the barcode or type the number into their system, & also enter the product details, price, reordering info etc. After this, when they scan the barcode, the specific product information appears on their screen.
UPC-A 12 digit numbers are also commonly used in the USA. These US format numbers are basically the same as EAN-13 numbers, but have one less digit. UPC-A numbers are effectively a subset of the EAN-13 number system.

There are 3 main ways to get a barcode number.

Firstly, you can make one up. However, this is definitely not recommended. An essential element of the barcode number system is the importance of ensuring all the numbers used on retail products are unique. Hence, if you just make up a number, there is a high chance of someone else having the same number on a different product. If this happens, you have effectively stolen their number and are potentially liable for reprinting packaging, product recall and other damages incurred, so it isnt worth the risk.

Secondly, you can join an international organisation that is the controller of most retail barcode numbers. Joining this organisation requires the completion of membership forms, provision of your companies financial information, payment of a joining fee and also payment of annual fees. Many manufacturers find this to be a complex and expensive process far more than they expected for something they expected to be simple buying a barcode number.

Thirdly, you can purchase a barcode number from a reputed barcode reseller. These barcode resellers, such as Barcodes Limited in New Zealand, usually own a large group of barcode numbers that originate from the UCC or GS1-US, part of the international controlling body, but are outside their licensing system. Hence these barcode resellers are able to sell the barcode numbers for a relatively cheap one-off price, and usually dont charge any joining fees or annual fees. These Barcode Resellers are usually internet based, as you dont need to physically collect a product from them, and they operate from websites such as barcodes.co.nz. If you are considering purchasing a barcode from a Barcode Reseller, ensure you read their site carefully, and also look for testimonials from satisfied customers who are using their barcode numbers.
Actually, there is a fourth way to get a barcode number you can purchase one from a dodgy barcode reseller but this could be as dangerous as the first option of making up your own number, so it isnt recommended.

Once you have your barcode number, which you have probably purchased from a Barcode Reseller, it is reasonable easy to get the barcode on to your product. Usually you will receive barcode images when you purchase your barcode number, so all you need to do is incorporate one of these images into your product packaging artwork. The standard size EAN-13 retail barcode is 25mm x 37mm. Officially they can be reduced to 80% of size ie to 20mm x 30mm. If you have already printed your product packaging, then the easiest thing to do is purchase some barcode labels. These labels usually come in rolls of 500 or 1000 labels, and are relatively inexpensive.

Finally, there is no central database where you need to register your barcode number. Once you have your barcode number on your packaging, your product is ready to go to the retailers. You can then sit back and enjoy that well-earned cup of coffee.

Leasing Retail Space – Foreclosures And Lease Cancellations

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In Event of Foreclosure

Foreclosure of a mortgage typically extinguishes all claims to the property. In other words, if you’ve negotiated a lease and started a business, your right to use the retail space is terminated by foreclosure unless there is a separate agreement.
Will Lender Cancel?

In many cases, the lender has a defined period of time to reject leases or they are assumed to remain intact. Further, lenders often want to retain the leases and tenants to make the property more salable. However, if the rental rate for a lease is well below market rent, and the tenant is clearly successful, the lender would likely terminate the lease and require the tenant to negotiate a new lease at market rent.
Negotiating From a Position of Weakness

The tenants negotiating position is much weaker than it was when he first negotiated the lease. The tenant has a successful business at this location. Changing the location of the business may damage or destroy the business. The tenant’s ability to bargain and negotiate lease terms is a weak.
Nondisturbance Clause

Tenants can avoid this dilemma by obtaining an agreement that the lease will not be terminated by foreclosure. This is termed a nondisturbance clause. Landlords are reluctant to grant this concession due to the limitation it imposes on the landlord when obtaining financing.
Maintenance Standards

The definition of maintenance standards is often vague. A typical clause may read that “the landlord will maintain the property in a manner consistent with local practice and a prudent owner”.
Personal Guarantees

Landlords love personal guarantees since they substantially limit the tenant’s ability to abandon operations at the retail space. Personal guarantees should be avoided by tenants whenever possible. It is reasonable that the tenant repay the unamortized portion of any tenant improvements and leasing commissions if the lease is terminated early. Further, it is reasonable for a tenant to guarantee a minimal level of performance on a building built to its specifications.
Different Rules for Second Generation Space?

However, for second-generation lease space, it is reasonable to request that the tenant not be personally or corporately responsible beyond paying the unamortized portion of tenant improvements and leasing commissions. Although this is reasonable, it may not be possible. The strength of the local rental market and local practice will dictate whether landlords can extract personal guarantees from tenants.
Purchase Option

For single tenant retail buildings, tenants often want a right to purchase the building at a predetermined price. Landlords prefer to avoid this. A compromise is providing the tenant a first right of refusal.
Sublease Issues

Landlords want the tenant to make rental payments throughout the lease term, but don’t want the tenant to profit from subleasing the retail space. In some cases, the tenant has the right to sublease the space subject to the landlord’s approval. There’s often a clause that the landlord’s approval shall not be withheld unreasonably. There’s also often a clause limiting the types of businesses which can sublease from the tenant. Sublease payments in excess of payments on the primary lease can be an intensely negotiated item.
Minimum Hours of Operation

Some retail centers require fixed hours of operations for each tenant. The concept is great. If a shopper visits the mall, they know each store will be open from 9 a.m. until 9 p.m. (or whatever the hours of operation). However, assume you expect to get 90% of your business between 12 p.m. and 5 p.m. In some cases, the minimal hours of operations are nonnegotiable. You may need to consider the excess hours of operations part of your occupancy cost.
Dedicated Parking

Dedicated parking is another issue where interests almost always diverge. Tenants love to have parking dedicated to their customers and landlords hate having parking dedicated to any one store. Peak traffic for a store may occur in a short period of time. However, the parking spaces are typically dedicated 24 hours per day. A compromise is the right to put portable signs in front of parking spaces several hours per day consistent with the tenant’s peak hours of business.
Expansion Options and First Right of Refusal

Expansion rights and first rights of refusal are less typical for retail than for office. However, assume you are opening a small restaurant in a highly vacant shopping center. You’re initially taking 1000 square feet of space but hope to expand the restaurant to five or 10,000 square feet of space. Having the right to take additional space at a previously agreed-upon rental rate and to claim additional space through a first right of refusal can be invaluable. Once the restaurant is successful, negotiating rental rates at a favorable level will be difficult.
Example

For example, assume your restaurant has been operating successfully for two years and you expect to expand the restaurant during the next 12 months. Unfortunately, your landlord tells you he just leased the spaces on either side of you. A first right of refusal for additional space can allow you to avoid this problem. Consider whether the rental rate for the first right of refusal is the rate agreed upon by the landlord and the new tenant or a predetermined rate.

The Market Research and Consulting division of OConnor & Associates provides information necessary to make decision to commercial real estate professionals. Occupancy and Rental Data, ownership and management information are routinely gathered for four major land uses multifamily, office, retail and industrial. This information allows investors to compare competitive properties, facilitate business decisions and track market and submarket performance.

How To Succeed In Retail

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How To Succeed In Retail Business

When last have you heard of trusted employees who betrayed their employers trust? Here are three of the more common instances.

(One) A former Marks & Spencer department Section Manager based at the Trafford Centre, received an eight month suspended sentence and 240 hours of community service for stealing 6,700 from the stores POS terminals between July and August 2009.

(Two) In September 2009 a Tesco checkout assistant in line for promotion as the face of Tesco, turned out to be an illegal immigrant.
A major high street retailer in Manchester contacted police in connection with a warehouse worker who was suspected of stealing DVDs. A subsequent Police search of the employees residence exposed what was described as another warehouse full of goods. This was a trusted employee with over four years continuous service.

So what do these cases have in common? They highlight the fact that these retailers had failed to establish or follow standard operating procedures.
In this article I will attempt to outline the main factors that are responsible for the demise of a majority of retail organizations. I will also offer a number of best practice strategies that can be utilised by any organization.
Our research has identified four root causes of the demise of any retail venture,
The lack of robust policies
Employee error
Fraud
Policies compliance.
The creation of good policies and ensuring their compliance is vital for the success of all retail businesses, and especially large national & international retail brands. The flip side of this is that when there are strong operational standards and best practices built in success comes that little bit closer. However, having a good policy on its own does not automatically guarantee success. What is required? A simple answer is nothing short of robust checks and balances that are aimed at ensuring compliance.
There are numerous factors responsible for the success of a retail organization. Here are the three I have singled out as most relevant:
(a) Smart buying
(b) Strong sales
(c) Shrinkage reduction.

However, the implementation of these strategies is sometimes dependent on external circumstance. For example, smart buying is dependent on suppliers, the availability of merchandise, the supply chain, currency exchange and to an extent the mood of the Chinese leadership. Like smart buying, strong sales/turnover depends on the economy, fashion trends and so on. Shrinkage is the only factor that is within the control of the retailer.

Every retailer in the UK loses on average 2.5% of their turnover to shrinkage, which is a considerable amount in an industry particularly when margins are sliding.

Shrinkage occurrence can take many forms: shoplifting being the most prominent. However, internal activities in retail organizations, themselves cause more shrinkage than shoplifting. Cashier theft or error, accounts for 32% of retail shrinkage, general employees 24%, receiving 10%, errors and damage 13% while shoplifting accounts for only 21%.

I recently asked a number of retail employees if they have received shrinkage awareness training. The response that I received from all of them was shrinkage, “what is shrinkage?” Given the importance of shrinkage to the success or failure of any retail organization, one would expect it to be a buzzword in retail circles.

For the benefit of those and others like them, shrinkage is simply the difference between the value of goods received and the amount received for those same goods at the point of sale. Now the question of how does merchandise lose value from the time of delivery to the time of sale is at the heart of the success or failure of many retail organizations; it all boils down to good operational standards and best practices.

The employment of an illegal immigrant would have cost Tesco 5,000. Marks and Spencer nearly lost 7,000 though it managed to recover a bulk of it from the offender, it will take time to recover the legal fees and the damage the incident caused to its reputation, considering the fact that this individual had already been cautioned for dishonesty by another retail employer will not help.

Poor adherence to recruitment and selection procedures allowed this individual to gain employment. Had accurate reference checks been carried out, a trail might have taken them back to the previous employer. What retail jargon views as unnecessary expenditure is in truth and in fact, a factor in what is considered shrinkage. I should also note here that the other big retailer might not recover a single penny from the warehouse employee. So then it behooves each retailer to ask the question”what will an additional 2.5% of profit do for my organisations balance sheet”?

To succeed, in addition to smart buying and increasing sales retailers must focus on shrinkage management and reduction. This is a truly controllable cost. Robust policies & measurable operational standards will also ensure success.