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profits. To account for any gains or losses
resulting from the handling of Navy clothing
items, you should credit or charge the Navy Stock
Fund.
You may have items of clothing that have
become shopworn (soiled from exposure or
handling) or damaged by smoke or water
to such an extent that they cannot be sold at the
standard price. If laundering or dry cleaning will
restore wearability with a reasonable expectation
that the purchaser will obtain normal wear, you
should survey (revalue) these items and place them
in stock at 25 percent of the standard price. (Prices
should be rounded off the next higher $0.05. )
You may have items of clothing with minor
defects such as split seams or missing buttons.
Although you cannot sell them at standard price
in this condition, you can have them repaired.
You can then sell the items at standard price as
long as wearability is restored. You should charge
the cost of the repairs to the Navy Stock Fund.
If the clothing does not meet any conditions
for revaluation or repair, then you should expend
it from the records as a loss by survey.
Sales
The fourth major type of expenditure in the
ships store is sales. Accountability is actually not
reduced in this case since cash is received in place
of the stock expended. The supervision of ships
store sales will be discussed in chapter 6 of this rate
training manual. The information below will
discuss some of the techniques of retail merchan-
dising you can use to expend ships store stock,
Price Changes
A price change is any change in the value of
an item of stocked merchandise. Price changes can
occur for a variety of reasons and are a necessity
for any effective retail operation. As a leading
Ships Serviceman, you should not only be able
to supervise the procedures involved in ac-
complishing a price change, but you must also be
aware of the reasons for and causes of price
changes. You should be able to advise the ships
store officer when a price change is called for.
A markon is an increase in the selling price
of an item of merchandise. A markon will cause
an increase in the monetary responsibility of the
custodian in charge of the retail outlet. You may
advise a markon when there is a substantially
increased cost price on a new receipt of mer-
chandise already carried. Since all the particular
items are carried at the new cost price, the old
selling price may be insufficient to generate the
desired profit margin. Other possible reasons for
a markon might be a change in the pricing policy
of the ships store officer or a desire on the part
of the commanding officer to increase store
profits in order to increase the ships recreation
fund.
A markdown is a decrease in the selling
price. A markdown causes a decrease in the
monetary responsibility of the ships store
operator. 1 f the retail price is marked down below
the cost price, then there is actually a decrease in
the value of Navy Stock Fund material. This
expenditure from the NSF is reimbursed by
profits at the end of the accounting period.
The existence of markdowns in an operation
is not necessarily bad. In fact, a reasonable
number of markdowns during an accounting
period is considered healthy. It is an indication
that you are exercising some degree of stock con-
trol. After all, items that you cannot sell are no
asset to your store. They are tying up money you
could use to purchase more desirable stock.
Although an item that is reduced in price generates
less profit or even a loss per item sold, the end
result of a timely markdown is an increase in
profits. The increase in profits will result from
larger customer volume and interest, increased
storeroom capacity, and a larger amount of
available buying capital. Of course, markdowns
must be done selectively since too many
markdowns can only result in decreased profits
for your store.
The following is a list of reasons for possible
markdown action in a ships store operation.
. Reduction in cost price on a new receipt
of merchandise already in stock
. A desire to generate less in store profits and
pass the savings on
l A change in
store officer
l Excess stock
. Dead stock
saturated items
. Merchandise
to the customers
pricing policy of the ships
because of overbuying
because of unpopular or
that is going out of style
. Excess seasonal merchandise after the
season has reached its peak
. Perishable stock such as candy or film that
has become old and outdated
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