1. Music Product Inventory
The Key To "Managing"
Music Product Inventory
presented by
Alan Friedman, CPA
Friedman, Kannenberg & Company, P.C.

2. Gross Margin Return on Investment (GMROI)
You can effectively manage your entire inventory by using 3 simple calculations:
Gross Profit
Inventory Turns
Gross Margin Return on Investment (GMROI)

3. Gross Profit
Sales $ 1,000, %
Cost goods sold ( 650,000) %
Gross Profit $ 350, %
========= ====

4. ------------------------ Avg Inventory cost on hand ($ 300,000)
Inventory Turns
Cost of goods sold ($ 600,000)
Avg Inventory cost
on hand ($ 300,000)
= Inventory turned “2 Times”
…or, it took you 6 months to turn over your entire inventory (in $$$)

5. = GMROI of $1.33 GMROI Gross Profit ($ 400,000) --------------------
Avg Inventory cost
on hand ($ 300,000)
= GMROI of $1.33
…or, your earned $1.33 for every $ you invested in inventory

6. GMROI Goal:
Most retailing experts (across all industries) suggest a GMROI target of
$1.50 or better

7. Let’s test our new calculations …

8. Your cost was $50, including freight
Let’s test our new calculations …
In January of last year, you bought four (4) copies of “The Complete Score of Alan Friedman”; the book has a list price of approximately $80
Your cost was $50, including freight
You sold all 4 copies by the end of the year, as follows…

10. Gross Profit
Sales $ %
Cost goods sold ( 200) %
Gross Profit $ %
===== ======

11. ----------------------- Avg Inventory cost on hand ($ 125)
Inventory Turns
Cost of goods sold ($ 200)
Avg Inventory cost
on hand ($ 125)
= Inventory turns of 1.6 Turns
…or it took you an average of 228 days (or 7.5 months) to turn over the entire “Alan Friedman Score” inventory

12. = GMROI of $0.96 Gross Profit ($ 120) --------------------
Avg Inventory cost
on hand ($ 125)
= GMROI of $0.96
…or, your earned $0.96 for every $1.00 you invested in the “Alan Friedman Score” inventory

14. Gross Profit
Sales $ %
Cost goods sold ( 200) %
Gross Profit $ %
===== ======

15. ----------------------- Avg Inventory cost on hand ($ 75)
Inventory Turns
Cost of goods sold ($ 200)
Avg Inventory cost
on hand ($ 75)
= Inventory turns of Turns
…or it took you an average of 137 days (or 4.5 months) to turn over the entire “Alan Friedman Score” inventory

16. = GMROI of $1.60 GMROI Gross Profit ($ 120) --------------------
Avg Inventory cost
on hand ($ 75)
= GMROI of $1.60
…or, your earned $1.60 for every $1.00 you invested in the “Alan Friedman Score” inventory

17. Gross profit = “it depends” on your inventory turns
Alan’s Inv Mgt Goals:
Gross profit = “it depends” on your inventory turns
Inv turns = “it depends” on your gross profit percent
Most retailing experts (across all industries) suggest GMROI targets of… $1.50 or better

18. The Secret Weapon: a “1-Page Solution” to Managing Your Inventory

20. Top Three Takeaways
Here are three takeaways from “How To Manage Your Music Product Inventory” presented by Alan Friedman. Bring these ideas to back to your business and see what results you generate!
Takeaway 1: Effectively manage your inventory by under- standing these three (3) key calculations: (1) Gross Profit, (2) Inventory Turns, and (3) GMROI
Takeaway 2: Generate the “1-page” GMROI Report solution at the end of every month and act upon it
Takeaway 3: Download the GMROI Excel Spreadsheet from our website at: 20 20

21. Any
Questions?

22. “Free” Consulting Meetings
Contact Jen outside the Idea Center entrance
after this session to set up a meeting time

23. Catch “Printz” Saturday night at the Hilton Lobby
“Enjoy the Show!”
Catch “Printz” Saturday night at the Hilton Lobby