Strategy-Hurdling to Profitability (1,147 words)

By Stephen Lett

Your catalog is like a piece of beachfront real estate: every square inch of space is valuable. And every square inch of space should be considered selling space—from the front cover to the back cover.

On every page, every product must pay its way for the space it occupies. Some catalogers like to use a traditional "square inch analysis," fairly common in the industry. I prefer a somewhat different method to measure the performance of any given product, which is based on the calculation of a "hurdle rate" —the amount of sales a product needs to bring in, given its space allotment on a page, to be profitable. Let's look at how to determine the hurdle rate and proper mark-ups in your catalog, in order to evaluate the success of the merchandise at the SKU level.