Improve Your Retail Profit Margin with These POS Strategies


Monitoring profit margins is crucial for any retail business's financial health and performance. It's easy for margins to erode over time as costs fluctuate if you don't keep close tabs. Leveraging point-of-sale (POS) data and reporting provides valuable insights into margins so you can take targeted actions to improve retail metrics and profitability. It is easy to take a product for whatever reason and market it, then keep handling it. The price, discounts and costs over time change and soon your shop is handling an item that has a marginal margin and you do not know it as its hiding in thousands of products. These low margins are almost always a waste of time and space.

Regularly Run Margin Reports

Finding these items

This is a report that I suggest you run "Quantity On Hand and Price Check".

Margin check

It will show you your margins and the quantities on hand so you can instantly start to plan. So, it is a great place to start.

So here it is:

I suggest running this report monthly, as your margins require continuous monitoring and management control.

Make target-specific margin thresholds, like aiming for at least 30% across most product categories. Food should be around 50% margin, exceptions will often have to be made for high-volume staples.

Pay close attention to the margin changes over time, not just the absolute margin level but trends down indicate issues.

Take Action on Low Margin Items

When you spot low margins in reports, take steps like:

  • Reprice the item if viable to get to your target.
  • Discontinue the product if other actions don't make sense. Free up space for better options.
  • Negotiating with vendors and being blunt with your supply can often help. Just tell the truth at these prices, I cannot handle these products.

Continuously monitor and Improve

This is not a set-and-forget exercise. You need to:

  • Review margins frequently as the market changes. Promotions, competition and costs fluctuate.
  • Leverage data to constantly test and iterate on retail profit improvement strategies.


Careful monitoring of product margins through POS reporting and analytics is vital for optimizing profitability in retail. But turning those insights into action is the crucial next step. Avoid over-indexing on margin alone, and embrace a comprehensive approach for profitable growth.


If you don't already, I recommend retailers now run these margin reports to uncover low performers. It will take you less than a minute.


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