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From The Co-Founders
Patricia M. Johnson & Richard F. Outcalt
Retail Strategists and Retail Turnaround Experts
Co-Founders, The Retail Owners Institute® • Business Strata:G®


Hypocrisy Runs Wild!

Very likely, you saw this headline today, as we did. “Amazon Announces $56,000,000,000 Profit.” For one quarter. Nice, eh?

The announcement also referred to Amazon as the world’s largest retailer, surpassing Wal-Mart. Again, how nice.

Meanwhile, another headline earlier this week: “Physical Stores Still Vex Amazon.”

Hmm. The “world’s largest retailer” not able to make stores work?! The hypocrisy of boasting about profits, most of which come from Amazon Web Services, not bricks-and-mortar retailing. Moreover, their “online stores” reports 11 times as much volume as their physical stores ($61.4B versus $5.2B.)

Well, if you are Amazon, a little hypocrisy will probably never be noticed. Oh, how nice.

Here’s some of what Kate King reported in the Wall Street Journal:

  • “This [closing of Amazon GO stores] is hardly Amazon’s only misfire in the physical-store universe. It has closed dozens of its other branded retail stores in recent years, including bookstores, fashion outlets and its ‘4-star’ locations stocked with best-selling items from its website.”

  • “After a decade-long experiment with bricks-and-mortar stores, Amazon’s dominance online has yet to translate into a successful strategy for connecting with shoppers in the real world, retail brokers and landlords said.”

  • “‘I don’t think they [Amazon] really understand retail,’ stated Nick Egalanian, president of SiteWorks Retail. ‘Running warehouses and shipping stuff is not the same as greeting a customer and saying ‘May I help you?’”

  • “‘Reducing the number of employees available to help customers and giving priority to credit-card payments over cash limits sales and makes the shopping experience more cumbersome,’ said Egalanian.

  • “Amazon now licenses its Just Walk Out technology to more than 200 retailers. This allows it to profit by marketing the technology without the cost burden of operating a store.”

Amazon is a remarkable technology company and technology platform. No question.

However, the delicate art and science that independent retailers make look so easy has yet to be accomplished by Amazon. And maybe never will be. We just have to live with Amazon’s hypocrisy.

—-

“Physical Stores Still Vex Amazon,” Kate King, The Wall Street Journal, February 4, 2025.

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From The Co-Founders

Patricia M. Johnson & Richard F. Outcalt

Retail Strategists and Retail Turnaround Experts

Co-Founders, The Retail Owners Institute® • Business Strata:G®

 


Why Close Does NOT Count In Physical Inventories

It’s very common for retailers to have their fiscal year end be January 31. It’s after the Holiday season, and inventories are generally low.

Likewise, it’s also very common that retailers are taking (or having a service take) physical inventory this weekend or soon thereafter.

As we all know, counting inventory by hand is tedious, boring, expensive and, frankly, no fun at all. However, whether by hand, by barcode, by any method of technology, the inventory count matters, and it matters a lot!

Let’s review the Big Picture for this business doing $700,000 in revenue, with $290,000 in total operating expenses.

Focus on the P&L's Big Five numbers
Chart showing relationship of COGS and Gross Margin
Formula for calculating Cost of Goods Sold
How accuracy of physical inventory counts affect profits

So you can see that the impact of the ending inventory (physically counted) is vitally important. 

  • For instance, in the illustration above, perhaps the bored inventory-counting people simply neglected to count $10,000 worth of inventory. That’s understandable, but disastrous!

  • In fact, if they had neglected to include $15,000 of inventory @cost, the business would have shown a $5,000 loss.

  • Whereas had all the inventory been counted accurately, the owner could rejoice with $10,000 in profit.

This is always a busy weekend for millions of retailers. Let’s hope most of them count every last little widget.

How about in your store?

 

“Am I running this business…or is it running me?!?”

—-Some Retailer, Somewhere, Every Day

 

Every retailer occasionally wonders “Am I running this business, or is it running me?!” Retailing is a very dynamic industry; change is the name of the game. Adjusting to those changes is an unrelenting challenge.

That’s why The ROI has created a suite of online calculators designed specifically for independent retailers like you, who want to avoid surprises and seize opportunities.

No spreadsheets, no guesswork—just fast, clear insights so you can make your next business decisions with more confidence. And maybe sleep better at night!

Here’s how and when to use each of our powerful tools:

1. Retailer’s 3-in-1 Integrated Calculator

The question it answers: What would happen if I...?

Start here when you’re facing big-picture questions about your business:

  • “What will it take to break even?”

  • “Should I close a store? If so, which one?”

  • “Can I afford a remodel? What if I need a loan?”

In just minutes, this tool shows you your projected Profit & Loss, Buying Plan, and Cash Flow—all in one place. With just a few inputs, you can test different scenarios and see the financial outcomes instantly.

If you’re exploring strategic decisions, this is your go-to calculator to uncover the real impact on your bottom line.

2. Key Ratios Calculator

The question it answers: What do our “vital signs” show?

Want to know the financial well being of your store? The Key Ratios Calculator delivers fast, accurate metrics like:

  • Profit %

  • Gross Margin %

  • Inventory Turnover

  • G.M.R.O.I.

  • Current Ratio

  • Debt-to-Worth Ratio

Plus, it benchmarks your results against industry standards for your retail segment.

Use this tool to evaluate financial health, identify strengths, and address weaknesses. Perfect for quarterly check-ins or when preparing to make big moves.

3. Financial Strength Rater

The question it answers: How resilient is my business?

When sales are up, down, or flat, resilience matters. This tool analyzes trends in your Balance Sheet ratios to reveal the staying power of your business.

Get a 1-to-5 score on key metrics to spot early warning signs or validate your strengths. Use it when planning for the future—or when you just need peace of mind that your business is on solid ground.

4. PROFITS Forecaster

The question it answers: Will we make a profit this year?

If you want clarity about your P&L, this tool is a must. Enter your best guesstimates of numbers you work with all the time—sales, gross margin %, and expenses by category (use our SPEEDY Expense Analyzer if needed). Immediately you’ll see:

  • A 12-month profit projection

  • Expense trends as a percent of sales

  • Immediate insights into trouble spots or opportunities

And if you don’t like what you see? Adjust inputs in real time to explore “what if...?” scenarios. Test different strategies until your plan “pencils out.”

Use it for annual planning, mid-year reviews, or any time you need confidence in your profit outlook.

5. Multi-Department Buying Plan Calculator

The question it answers: How much inventory should I bring in—and when?

This tool combines the art and science of buying to give you clear monthly buying plans, by department, in minutes. Enter basic info—beginning inventory, expected sales & margins, and planned turns—and you’ll get:

  • Maximum inventory to bring in each month

  • Ending inventory targets (the real key number)

  • Your projected G.M.R.O.I.

Perfect for planning upcoming seasons or refining your buying strategy. Need adjustments? Change sales, margins, or turns and instantly see the impact.

This tool helps you balance buying and selling like a pro while keeping an eye on cash flow and inventory turns.

Which Calculator Should You Use First?

It depends! What is your immediate focus?

  • Big decisions about your business?
    Start with the 3-in-1 Integrated Calculator.

  • Need to evaluate financial health?
    Use the Key Ratios Calculator or Financial Strength Rater.

  • Planning for profit?
    Head to the PROFITS Forecaster.

  • Fine-tuning inventory?
    Try the Multi-Department Buying Plan Calculator.

Each tool is built for speed, accuracy, and your retail reality. No accountants, no spreadsheets—just you, your numbers, and Big Picture perspective you can trust.

Let’s get started!

 

It’s true. You do need Member Access Privileges to use The ROI’s proprietary calculators. That’s a modest monthly fee that helps cover the costs for us to provide all the resources, training, and tools of The ROI. If you already are an active Member, we thank you! If not, please consider signing up today.

 

RetailOwner.com

Avoid mistakes • Seize opportunities • Look ahead now




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